10 Easiest Ways to Cut the Budget (and More Tips)

Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
This post may contain affiliate links, meaning I’ll receive commission at no extra cost to you for your purchase.*

A budget cut is removing expenses in your personal budget without reducing your overall wellbeing.

If you are overspending or are having trouble keeping your finances under control, taking steps to make a budget cut can be very important.

However, it can be very difficult to find out what to cut. Where do you begin?

Before Anything Else Track Your Spending

You can’t really get going on your budget until you actually understand what you spend. Sure, you can say you’ll spend less on food, or entertainment, or transportation costs, but what does less mean?

If you aren’t tracking how much money comes in and how much money goes out then you can’t possibly know where to cut your budget.

There are a number of simple ways to track your spending. You can even go back and look at credit card statements and bank history to get an idea from previous months to help you dive right into your budget.

Once you have figured out where your money goes, you can make strategic decisions on where to cut your budget.

If you’re still unsure where to start, here are some suggestions for easy things to cut from your budget right up front.

What Should I Cut Out Of My Budget?

Expensive Entertainment

Entertainment is probably the biggest part of your discretionary spending budget, or the money that you can spend on whatever. You don’t technically need it, but everyone wants to be entertained. So how can you get both?

First, ask yourself if you are spending money on entertainment that you don’t really need. Do you have 6 different streaming subscriptions? Try just one at a time. Do you go to the movies weekly? Try borrowing movies (for free) from the library. Do you walk the mall and buy something that catches your eye? Take a nice nature walk instead.

There are so many ways to have fun without spending a ton of money, so start by reducing your entertainment budget to 0 for a month while getting creative. That includes cutting cable, Netflix, and other things that just come out of your bank every month. Then slowly add some money back in to your entertainment budget when you need it.

Expensive Food and Eating Out

Eating out is extremely expensive. There is the food itself, the cost to have it prepared and served, as well as the tip, and maybe even delivery fees. All of that makes your food multiple times more expensive than making it at home.

I know you’re busy though, so consider making large dinners that you can freeze then reheat for a quick meal. And don’t forget to pack a lunch because eating out for lunch really adds up.

But that’s not all, the food you eat and the grocery stores you shop at also make a difference. Consider buying the off brand. It usually tastes just as good as the name brand. If it doesn’t, you can always go back to the name brand. Try the off brand at least once.

Some stores are just more expensive to shop at. The same product, for example, can cost $1 at one store and a $1.48 at the next. So choose where you shop wisely!

New Clothes

If you have a line item in your budget for clothes, you are probably buying clothing too often. Most clothing will last for months or years before it needs to be replaced.

They can last even longer if you learn to do simple mending tasks like fixing a button or patching a hole. Sewed pants might not be trendy, but they are economical and that’s what helps your budget stay on track.

Outfits can be used in multiple combinations to get a new look. And rotating warm and cold clothing will help keep them fresh.

If you must buy clothing, consider going to a second hand store or hosting a clothing exchange to get something new without breaking the bank. Clothes don’t have to be expensive.


We live in a world where everything is a subscription. You can be subscribed to magazines, websites, video games, amazon, streaming services, home care, the gym and even Walmart, etc.

Do you ever use them? Would your life be worse without them? Can you use the service on an as need basis? If you can answer yes to any of these questions it might be time to cut the subscription.

Cutting Amazon Prime alone will probably save you hundreds of dollars a year.

Alcohol and Coffee

I know this isn’t a popular suggestion, but alcohol and coffee are huge money suckers (and also not very healthy). Drinking alcohol at a restaurant especially will drain your wallet quickly.

Be smart and find ways to have fun with your friends without going out to drink at the bar, or having a couple glasses with dinner. Your wallet will thank you.

Now for coffee, do you need to buy the most expensive sugary coffee you can find on your way to work? Probably not. I would argue that if you really tried you could even cut morning coffee altogether, but if you aren’t at that point, brewing it at home will cost only pennies compared to buying a cup daily.

You can even buy a machine that will make you a fancy cup in the morning on a timer and all sorts of other things. You get your coffee and you keep your money, so stop buying coffee on your way to work!


I am not suggesting that you get rid of your insurance. But when is the last time you shopped around for a new policy?

Insurance companies give the best rates to new customers then slowly increase them over time, so shopping around for a new policy every year can save you hundreds of dollars.

You don’t even have to switch, usually you can just show your current insurer what the other company is offering and they’ll match it.

Reduce Gas Bill: Batch Your Errands

Do you find yourself running to the store because you need just one thing? Have you ever gotten home, remembered something you didn’t do, and immediately left again to run another errand? It has probably happened to all of us.

Running errands has become a part of life, but it doesn’t need to be an expensive one. Every time you drive out to your destination and back home you are using gas. So the more you drive back and forth the more gas you use.

Try instead to save up your errands for the same day, or getting another errand done while you are in the same part of town. This takes a bit more planning and forethought, but your wallet will thank you.


Chances are you pay a rather high utility bill each month. There are so many small and easy opportunities to reduce your utility bill.

Start by just being aware of how much electricity you use and trying to use it less.

For a more dramatic way to reduce your energy bill, check out this post on how to cut your electric bill.

Going Out With Friends: Go In Instead

Going out with your friends can be very expensive. Not only do you usually eat out, but you will almost always end up spending money on an activity as well.

Going out with friends weekly or more can become a very expensive habit.

Consider inviting your friends over to your house or apartment instead. Do a potluck. Have a game night. Do some competitions of skill. Do something silly. Whatever it is, if you are with your friends you will have a good time and spend much less.

Phone Bill

If you are using one of the major phone providers, chances are you have a high phone bill. You pay a service charge, a data fee, your monthly phone lease, etc. There are other options.

First, as much as you want to have the latest and greatest phone, you probably don’t need it. If you have a new phone, consider trading it in for an older model one that you can pay off immediately.

Second, shop around for different providers. There are a handful of incredibly inexpensive providers that have very good service. The one I use is called Mint Mobile*.

The service is just as good as many big name providers, and they offer WiFi calling so I am almost never without service. I get that and 3 gigs of data month for just $15! No hidden fees. Switching cut my phone bill by more than half.

How To Cut Your Budget Down Even More

Once you’ve cut the easiest things from your budget it is time to start attacking other things that can been even more help but harder to change. If you do this you might even be able to cut your budget in half!


Your house is most likely your biggest expense each month. It is just a part of life, but what if it didn’t have to be? Imagine having your mortgage (or rent) cut in half. How would that change your life?

Sadly, there is no easy way to cut your mortgage or rent in half. But you should consider taking one of these hard steps so you can live an easier life.

You can refinance your home to lower your monthly payment. If the interest rate is lower, or you feel like you just need more breathing room each month, refinancing your home can be a great way to lower your payment. Just be aware that your 15 or 30 year repayment window starts over, so it isn’t always the best option.

You can move to a smaller house or a cheaper area. Moving isn’t what most people want to do, but if your budget is struggling a move to a smaller space or a new area can be beneficial.

Set aside extra money to pay off your mortgage quickly. This will tighten the budget in the short run, but long term a paid off mortgage is a huge relief. If nothing else, consider paying down your mortgage quickly if you have private mortgage insurance on your house.

If you’re renting, consider the pros and cons of owning a home. Generally, home ownership will have you paying less each month, but there are other expenses to consider as well. Weigh those pros and cons then decide what is best.


Your car is most likely the next biggest expense you have. The easiest way to reduce that burden it to get out of your car payment. Here are some tips for reducing car costs.

Pay extra each month on your car payment to pay it off quickly. Just like housing this will tighten the budget momentarily, but it will be extremely helpful in the long run.

Trade in your car and get a cheaper vehicle that you can pay for with the trade in value or cash you have on hand. Buying a reliable car outright can make all of the difference.

Learn some basic maintenance and repair to reduce repair costs. If you don’t know how to do something, Youtube it. I guarantee it is on there.

Negotiate your car insurance. I know I already said this before, but seriously. Negotiate how much you spend about once a year then shop around for a better rate if you aren’t satisfied.

Find ways to save when you buy gas. You can save on gas by using a gas heavy cashback card or using the gasbuddy app. If you’re interested go ahead and use my referral code EHGYYDK for some extra gas points.


If you are like most Americans, interest on debt is taking a big chunk of your budget every month. That can be in the form of mortgage, student loans, car loans, credit card debt, medical debt, and so much more.

If you are in debt, there are two things that should consider doing. First, consolidating your debt into a single payment with a low interest rate. That can help you pay off the loan faster with less of your money going directly into the creditor’s pocket.

The second thing you need to consider is putting all of your extra money into paying off that debt. There are many approaches to doing this, find what works best for you and stick with it.

I recently paid off a debt that was taking $100 a month like clock work. Just that small chunk was taking a huge toll. It was such a relief to pay it off. You can have that relief too!

What are some other easy ways you can cut your budget? What is a success you’ve had reducing your budget? Tell me about it in the comments below.

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A list of definitions used on this blog can be found here.

Private Mortgage Insurance: Money you pay each month on top of your Principal, Interest, Taxes, and Insurance that goes directly to the lender. This is charged because you are considered to be a risky investment. This can be for a lot of reasons, but the main one is that you owe more than 80% of the value of the home. For example, you only put 5% down when you bought the house. PMI usually goes away when have built up 20% of equity in your home.

Frequently Asked Question About Budget Cuts

What are unnecessary expenses?

Technically, an unnecessary expense is anything that doesn’t cover your basic needs. These include food, water and shelter. Transportation is often lumped in with that because you need transportation to make it to and from work.

When creating a budget, however, there are some things that you need to have mental stability and focus. This can include entertainment and other forms of discretionary spending.

Just make sure you don’t justify spending large amounts of money on unnecessary things because you “deserve it” or “it is how I cope”. That is an easy way to get into debt.

How can we avoid unnecessary spending?

Avoiding spending on anything can be very difficult. The steps to do so are simple though. First, track your spending so you know where you money is going. Second identify areas that are unnecessary. Third, remove them from your budget. And fourth, remove the triggers that cause you to spend on those things.

That sounds simple enough, but then life happens. The important thing is to always get back on the horse when you fall off. If you make an unnecessary purchase acknowledge you did and move on trying to avoid unnecessary spending in the future.

Another great tip is simply not carrying money on you unless you are going somewhere to buy something. This helps remove the temptation to make a purchase.

Why is it better to underestimate your income instead of overestimating when creating a budget?

When you create a budget it is really easy to say “I’m going to make more than my regular income. I mean I have that overtime I was planning on taking, and that extra work on the side over here…” etc. The problem is that things don’t always go according to plan.

Instead, rationalize income you probably won’t make. Forgetting about the overtime and that thing you planned on selling when you make your budget makes you more likely to meet your budget. Just put anything extra into savings and you’re golden!

Another word of caution, don’t forget to calculate taxes into your budget when calculating future earnings. It is easy to say “My side hustle will make $1,000 next month”. But a chunk of that will be taken by taxes, so don’t budget that money for something else!

How much money should you save each month?

I’ve answered this question in depth in the post Why is it so hard to save money? But here is a quick taste. You should always pay some of your paycheck directly to yourself. A good starting point is at least 10% of your income.

Beyond that you need to consider building a large emergency fund, at least 3-6 months worth of expenses. After that just make sure that you’re saving enough each month that you aren’t caught by surprise on any of your expenses.

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