Everything is going up, except our incomes. Most people are having to tighten their belts. I find that reducing household spending works best when you target the few categories that usually consume most of a budget. These might be housing, food, transport, utilities, subscriptions, and impulse purchases. Here are some practical approaches that might have the biggest impact.
Track where your money is actually going.
Before cutting anything, it is important to see how your income is being spent. Look at your bank and credit card statements for the last year, or at at least the last 3 to 6 months. Do you have any reacurring subscriptions? How much are you spending on grocery and takeaways? What amount is being spent on small “invisible” purchases (coffee, delivery fees, apps, purchases, etc)? A simple spreadsheet or budgeting app can quickly reveal patterns.
Lower your grocery costs
Most of us know the ways to do this but get out of the habit due to tiredness, convienience, or feeling overwhelmed.
Food spending is one of the easiest categories to improve without major lifestyle changes.
Make meals plans before shopping and shop from your cupboards, freezer and fridge first to reduce waste. There are apps that will give you recipes using ingredients that you already have. Shop with a list. This doesn’t mean that you can’t change it if you see a cheaper alternative, but don’t go over the amount you had budgeted. Store brands are cheaper than premium brands, and look for things lower on the supermarket shelves as they are usually cheaper. We also cook larger batches and eat twice, or 3 times. You can freeze portions, or turn them into different meals, eg a bolognaise into a chilli, or potato nachos.
Reducing food waste by using leftovers intentionally also helps. Small amounts make great lunches. A bit of curry on a baked potato, or some chicken roast dinner made into a great pie or pasty. Bolognaise and cheese toasties are gorgeous 😁
Eating out, takeaways, and convenience food can be reduced to special occassions instead of a weekly treat. Fakeaways can be just as enjoyable, and healthier. A homemade pizza can be made so easily and use up bits in the fridge. A curry can also use up fridge gravel and be ready for you in the slow cooker when you get home from a busy day.
Always compare supermarket prices, and don’t buy everything at the same shop. Places like Farmfoods are often cheaper for things like sugar, tinned pulses, and butter. Make the most of special offers. We buy some things in bulk both from the internet, and world food aisles.
Reducing energy and utility bills.
At the moment it is a good idea to get a fixed energy rate as they will increase in price with the war in the Middle East. Small habits add up over a year and can help reduce bills. Lowering the heating slightly (even 1°C) can make a difference, or turning it off half an hour before you go to bed. We use blankets when sitting on the sofa to stay snuggly at a lower temperature. Other things we do are we use LED bulbs, wash clothes at lower temperatures, and dry the washing outside.
All of our standby electronics are turned off and plugs are pulled out, and we turn lights off when we leave rooms, and close doors to keep in heat.
Insulation of your home creates long term savings, even if it is just putting up a thick curtain over a door way. In days gone by I would put polythene over the windows to keep the draft out in rented property. Recently I changed my broadband provider and saved £40 a month and so it is worth going on comparison sites annually for energy and utility providers (and insurance, etc).
Negotiate your bills.
Many companies offer lower rates if asked, or if you threaten to leave. They will often renegotiate.
We have reduced mobile phone plans, internet, insurance, and TV packages in the past. A short phone call can reduce annual costs, and you have nothing to lose.
Cut regular subscriptions.
People often underestimate this category and so it is worth reviewing. Do you need all of your streaming services, and are you using your gym memberships? Maybe cancelling your gym for the summer and getting exercise outside might help. Cancel anything under used or not used. So many people are renewing insurance policies that they took out when buying an item. You might have cloud storaging when documents and photos could be down loaded onto a device. Are there free apps doing the same as those that you are paying for? Maybe you could rotate services month-to-month instead of keeping all simultaneously.
Spend less on transport
We walk a lot more now, rather than driving as we have the time. I have even retrieved my bike from the shed since petrol prices rose. When we do drive, I drive slower and without the full boot, as I used to have. I also combine errands and visits into one journey. Is it cheaper where you live to use public transport rather than the expense of keeping a car? In lots of areas bus fares are capped. Is there a weekly or free pass you can get, or railcards? Comparing insurance annually saved me over £300 last year.
Reducing impulse spending.
I don’t have any shopping apps on my phone, but if I did, I would wait 24 hours after putting something in the basket before I purchased it. We have a monthlly allowance of £50 a month each that we can spend on what we want. We also have a clothing budget. This keeps our spending low. Using cash also stops me over spending, and I also try to think about whether it is a need or a want.
Buy fewer, better things.
I like to buy good quality in sales, or 2nd hand. Cheap items replaced repeatedly often cost more over time. With some items it is cheaper to get them mended than replaced, eg good quality shoes.
Debt
Although not strictly household spending, reducing debt was what gave me more choice and relieved my stress. Can you reduce interest on your debt by swopping it to an interest free credit card? Maybe you can consolidate it into a lower interest loan which means one payment a month that is easier to keep track of? I did that and it lowered my monthly payments. Later, I paid extra off a month whenever I did a shift of over time. It was suprising how quickly my debts disappeared.
Set yourself some spending goals
This really gives you an incentive to save money, and then gets you into good habits. For me it was to pay off my mortgage, and later to retire early. It doesn’t matter what it is. Maybe it will be house improvements, that special holiday, a wedding, to pay off debt, building an emergency fund, or a house deposit. Watching that money build up, and the debts reduce, gave me a real buzz each month and kept me motivated.
Focus on high impact cuts first
People often spend too much energy on tiny savings at the beginning. Bigger wins usually come from housing, debt interest, transport, food, and utilities. Focussing on these could save you £200 or more a month. Of course the smaller savings matter and add up, but these changes in habits will take time, and more effort, until they become second nature.
There are so many ways to reduce your spending, too many to mention in one blog. This is just a starting point. Once you write a proper budget, and are aware where your money is going, you will have more chance of reducing your spending. How are you doing during these lean times when it is getting harder to live within our means?
Other blogs that might help
Why I write a budget each year
Ways to eat a nutritious diet on a budget
Ways to stay warm without the heating
Thought provoking as always. Until recently, I was loyal to just one supermarket but now I use different ones for different preferences. This has saved me money. Also, I never shop without a list! This stops my impulse buys, again a money saver. As you say, store own brands of goods are just as good as brand names. Lastly, I limit the number of trips I make to the shops. We all have to be more careful, I just wish the big supermarkets would pass on their exorbitant profits to their customers.
Well done. Yes I think Tesco made 3 billion profit last year whilst people are struggling