Bamboo’s Top Tips: How to dramatically cut expenses

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There comes a time in everybody’s life when things just get on top of them – bills, rent, school uniform, food shopping, credit card repayments, petrol, insurance, pet food – and they get stuck in a cycle of struggling to make ends meet until payday, only to do the same thing again next month. While it is tempting in this situation to look for ways of bringing in extra money, it’s often much easier to have more money in the bank when you cut expenses.

Cutting expenses doesn’t have to be difficult either – in fact, living a little (or a bit more than a little) under your means is a great way of building up a cushion of savings for rougher months – or for building up savings for a nice getaway or a new car.

What do I need to do to cut expenses?

Before we get ahead of ourselves, it’s a good idea to have a look at what to do before you start cutting expenses and making little savings here, there and everywhere.

It’s a good idea to get a solid idea of how much money comes in every month (and on what date) and then – in detail – where this money goes. Break it down in as much detail as you can – rather than saying ‘food’ for instance, break it down into: food shopping, quick trips to the shop (for things you forgot), meals out, food grabbed on the go…

By breaking things down in as much detail as possible, you’ll be able to see exactly where your money goes – and the places where you might be able to nip and tuck to make massive savings.

Quick example

If you live in a city, buying lunch (rather than taking it with you) costs between £3 and £5 a day. Most days, you’ve probably got three quid in change in your pocket, or it’s a tiny amount to pay for with your card. But, over the course of the month, that is between £75 and £125 a month. If there’s two of you doing this, that’s between £150 and £250 a month. Just for lunch.

It gets crazier after that. Need a caffeine injection before you step into the office? £2.50 a day. Five days a week. 20-25 working days a month. Ouch.

Little expenses like this are so small that it’s hard to notice them – but they build up. If you cut expenses like this, you’ll notice a real difference.

Run out of milk? Pop to the corner shop to grab a pint of milk. Don’t have anything for dinner – grab a quick meal on your way home or buy all of the ingredients to make something.

All of these things eat into your monthly income, and make the end of the month that bit tighter. But it doesn’t have to be this way. Living frugally doesn’t have to mean suffering or depriving yourself – in actual fact, being a little bit more prepared and aware of where you’re spending can actually make your life a lot more comfortable.

So grab your bank statements from the past two or three months and break each expense down, add them up and look at the total. Some things won’t fit into your usual pattern – perhaps you went to a wedding, or went on holiday – so either ignore these or put them in a miscellaneous category. Even better, take two fairly ‘normal’ months and tot up your expenses from these – this will give you a much better picture of what you spend and where.

Finally, make a list of all of your outgoings that you can’t scrimp on – mortgage or loan repayments, rent, insurance – and a list of the expenses that you could technically save money on – like phone bills, subscriptions etc.

Tip #1: Make a list of your priorities before you cut expenses

Before you get out the scissors to cut expenses, make sure you’re not going to be massively unhappy as a result. If it’s important to you to go out once a month with your friends, or for your kids to go to karate once a week, then write this down and try to avoid cutting these, if you can.
Cutting expenses isn’t about living like a monk, it’s about making changes that have as little an impact on your life as possible, while saving you a stack of money.

Tip #2: Look at where you can trim or cut expenses

Do you have a TV subscription like Sky or Virgin? Do you watch all of the channels? If the answer is no, quite often, you can call and negotiate a deal that is much cheaper, without losing any of the channels that you love or watch all of the time.
That being said, if you spend most of your time watching Netflix, then perhaps cancelling your Sky TV isn’t going to have a massive effect on your day-to-day life. Replacing your Sky subscription with a Freeview box (a one-off payment) could save you anywhere between £240 and £480 a year.

Tip #3: Try to cut down on wastage

Did you know?
Every year, we throw away 7 million tonnes of food and drink from our homes in the UK, and more than half of this is food and drink we could have eaten. When you add that up, that’s costing the average household £470 a year, and even more (£700 a year) if you’re a family with children. That’s about £60 a month!

Do you often find yourself going through your fridge and binning old food or veg that has gone off? Do you scrape away any excess food at the end of the day? Making sure you avoid this excess is a great way to cut expenses.

A good way to avoid this is to plan your weekly meals (and the ingredients needed) ahead of time. At the beginning of the week, work out what you’re going to eat and when. If you can find recipes or meals that use the same ingredients – peppers, onions, carrots, leeks – then you’ll find that they don’t go off in the fridge because you only needed them for one meal.

And – if you’ve got a busy lifestyle and don’t have time to cook every night – then batch cooking can be a great way to save money, time and prevent things from going to waste. Set aside an hour or two to make a few meals for the week – spaghetti Bolognese, chilli con carne, curry – that require similar ingredients and freeze them. When you’re in a hurry to eat in the week, you can just bang them in the microwave and be eating in 20 minutes. Plus, you’ll save a tonne of money in the long run.

Can you downsize?

Is your rent crippling you every month? Or maybe your car is guzzling petrol and costs a pretty penny for insurance?

As hard as it is, moving house or trading your car in for a cheaper (and more efficient) model might be the way to go. If you can move to a slightly cheaper area or buy a slightly more efficient car – your savings could be colossal, without much of an impact on your way of life.

Even better, if you can get to and from work on your feet, rather than driving, consider ditching the car altogether and using public transport to get to those hard to reach places.

These bits of advice are just the tip of the iceberg, there are tonnes of way that you can save money. Trying to cut expenses isn’t easy – but it also doesn’t have to be hard. Head over to our frugal living section to find a whole array of tips and tricks about how to save money, without having to significantly adjust your lifestyle at all.

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