COVID-19 pandemic is laying waste to the global economy.
Living paycheck-by-paycheck represents a grim reality for many. Others face even bigger woes, such as unemployment and overwhelming debt. These worrisome trends have launched a frugal way of living into the mainstream.
So, if you’re wondering how to drastically cut your expenses, we’ve got you covered.
The bad news is you need to do some belt-tightening. The good news is you don’t have to squeeze it too tight and turn your life upside-down.
You can take the control back using a set of simple tactics and smart tricks. Here is a guide on how to get your financial house in order and regain peace of mind.
Develop an Action Plan
Effective budgeting is a matter of forethought, commitment, and due diligence.
The change for the better starts with a frugal mindset. You have to embrace responsibility and being fully accountable for your finances. Then, create a budgeting plan and establish clear priorities.
Take your time to check how you’re currently holding up.
Go through your income, bills, receipts, credit/debit card statements, and other financial documents. You can use a simple spreadsheet to organize everything. If that’s not your thing, check out personal finance apps.
You can’t go wrong with budgeting solutions such as Mint, Wally, and Acorns. These user-friendly platforms streamline many tasks that used to be time-consuming and tedious. They can pull and categorize all your transactions in no time.
You essentially have your complete financial picture in front of you at all times.
The next order of business is to identify areas you can slash and cut back on. There should be some glaring ones that warrant immediate attention. Before you act though, have an open discussion with your family and household members.
Make sure you’re all on the same page.
Cancel or Switch out Subscriptions
Once that is sorted out, you have some tough decisions to make.
We would suggest focusing on the cell phone, internet, and cable. These are recurring monthly expenses you can trim significantly.
Instead of canceling everything, see if you can degrade your cell phone and internet plan. Get in touch with providers and negotiate lower rates or better payment plans.
As for cable, you should consider cutting it. Netflix and Amazon Prime are cheaper alternatives, while YouTube comes for free. You get the point.
Furthermore, make an effort to identify any unused subscriptions. Perhaps you don’t need that weekly magazine or gym membership after all. The same goes for on-demand services, monthly boxes, and software subscriptions.
And don’t despair. There is a slew of ways to have fun and stay in shape for free.
Have a picnic in a local park or a grill in your backyard. Dive into the amazing world of card and board games. Check for any free events going on around the city.
Work out from home, embark on cycling escapades, and take long walks/hikes. These are uplifting activities that don’t put you at risk during the Pandemic.
Commit to Frugal Shopping
To sustain your frugal efforts, begin practicing the art of shopping on a budget.
Before visiting a shopping mall or grocery store, create a list of things you actually need with you. Always set a limit to how much you can afford to spend. Resist impulse purchases and ditch bad spending habits.
Keep an eye on discounts but don’t be tricked into overspending. This also applies to online shopping. Scour the internet for special and limited-time offers, such as Kroger Weekly Deal.
Compare prices and get the best value for your money.
When it comes to essentials, you can spend a bit more on quality. Think in terms of shoes, toothbrushes, and pillows— things you want to serve you well and last long. On the other hand, everything else can be bought for cheaper.
Remember that the hardest part is sticking to the plan. To make things easier, only withdraw the right amount of cash. Another cool trick is to walk to and from the shops.
Namely, going on foot prevents you from carrying/buying too much.
Next off, it’s time to decrease food expenses.
An average US household spends more than $3,000 on eating out every year. If you ask us, that’s just too much.
Like it or not, cooking more at home is a great way to save money. You can start with simple meals that don’t take hours to prepare. Go for a quick-and-tasty style and take the meals you prepare to work.
Try to remember some recipes your grandma took pride in. Honor the family tradition and relieve pleasant memories while at it. Once you establish a routine, you’ll get used to cooking and enjoy it more too.
Moving on, buy food in bulk whenever possible to save even more money. Bear in mind that the best deals usually wait for you at the end of the aisle.
When friends invite you to a restaurant, launch a counteroffer. Throw a dinner at home and enjoy time in a cozy setting. You can even ask them to bring drinks and desserts and it’s a win-win scenario.
Speaking of which, cooking more can improve your physical and financial health in one stroke. Do yourself a favor and eat out only on special occasions.
How to Drastically Cut Your Expenses? Now You Know!
We’ve shown you some tips on how to drastically cut your expenses.
The important thing is not to succumb to doom and gloom lurking around us. Start by doing an in-depth assessment of your financial situation. Go step-by-step and get on top of the numbers.
Target everyday household expenses that fall into the non-essential category. Rethink your shopping and spending habits. Make necessary sacrifices today to boost your situation in the future.
There are other avenues you can explore, so feel free to do it on your own. There is absolutely no shame in being on a budget. It’s a way to mitigate the impact of the crisis on your life and banish stress and headaches for good.
If you seek more financial tips, browse the rest of our money section.