7 Easy Steps: How to Reduce Expenses and Save Money On Bills

At some point in everyone’s life, there’s a need to save money. Whether you’re looking to save money every month on bills, save up for a vacation, or if you’re just trying to build up your emergency savings account, these seven simple money saving tips will help you to reduce expenses and save money on bills every month! 

budgeting, saving money, cutting expenses, reducing expenses, budget, save money

This post may contain affiliate links. You can learn more here.

1. First and most importantly, set up a budget plan

To see where you can save money, you have to first see where you’re spending it.

Budgeting only works if you’re honest with yourself about your spending, and you’re dedicating to staying within your budgeting goals.

First, you need to go through your bank statements and actually see how much you’re spending on groceries, eating out, gas, activities, anything that isn’t a set amount every month. This step is important. If you decide you only want to spend $300 a month on food because you think you’re currently spending about $400 a month, but you’re actually spending $900 or more a month, then $300 might not be a realistic budget amount just yet. And setting unrealistic goals will do more harm than good.

Now that you know how much you’re spending, you need to decide how much you want to limit your spending to, for each category.

Write out your budget. List all of your fixed expenses separately from your variable expenses. Include your income so that you can see how much more (or less) you’re spending than you’re making.

You can keep track of your budget on pen and paper, in a budget planner, or you can use a spreadsheet on the computer! Whatever you feel that you will stick to!

Check out our Easy 6 Step System to Setting Up a Budget that You Will ACTUALLY Use!

2. See what bills you can completely eliminate

There are some things that we pay for that are totally unnecessary. Sometimes there are things people are paying for and not even using.

We live such busy lives that we don’t even notice when we’re paying for something we don’t even need or want. Some examples of bills that can be completely eliminated are;

  • Cable
  • Gym membership (if you aren’t using it)
  • Car payment (if you can pay off your car)
  • Membership sites (Amazon Prime, Ipsy, Netflix/Hulu, etc.)

3. See what bills you can cut back on

There are things we can completely eliminate, and then there are things we can’t For the things we can’t we can at least see if we can make it cheaper! There are a lot of things we don’t realize we’re overpaying for. Here are a few examples;

  • Car Insurance – Look into switching insurance companies. There are so many out there that are smaller companies that have better coverage for less! You can also switch to liability coverage instead of paying for full coverage as long as you don’t have a car payment on it.
  • Variable expenses- You can always cut back on your variable expenses such as food, gas, entertainment, etc.
  • Car payments – Go to the bank and talk to someone about seeing if you can get a lower interest rate.
  • Phone bill- Switch phone carriers to get a cheaper plan. The difference in coverage is so minimal it’s not worth paying hundreds of extra dollars a year for. Also, don’t go and buy the newest phone. Use a phone that is paid off so that you don’t have that extra chunk on phone bill each month.
  • Internet- Popular internet companies often give you a great deal for the first year and then increase your rates by a lot next year. Try to find a company that won’t increase your rates, and has lower rates. Internet is not a total necessity. Unless you’re using it for work or something important, you don’t need the fastest speed possible.

*Don’t forget to check out our article on saving money on groceries each month!

4. Pay for what you can in cash

If you struggle with paying off your credit card each month after using it, DON’T use it! You don’t want to be paying interest on your credit card, and getting to the point where your credit card debt is out of control.

Use cash for everything that you can. Especially your variable expenses, such as groceries, gas, eating out, entertainment, etc. Using cash helps to save money because you’re more conscious of how much you’re actually spending and less likely to spend so much. Also, once it’s gone, it’s gone!

Use the envelope system. Keep an envelope for each spending category in your wallet, and put in a set amount of cash to use in each envelope. For something a little more fun and organized, try a cash budgeting system book! 

5. Create separate accounts

This is one trick most people don’t know about, but can make a world of difference when it comes to saving money! The point of creating all of these separate accounts is so that you can slowly save up money little by little, for all the large expenses in your life. Whether it’s a bill you know you’ll have, such as car insurance you pay yearly or every six months, or maybe an unexpected home repair or doctor bill, you’ll be prepared for it. By having that money available when you need it, you won’t have to come up with large amounts, or charge it to your credit card and pay a ton in interest.

Here are some examples of different accounts you can have:

  • Car Insurance
  • Car Registration/Repairs
  • Emergency Fund
  • Home Repairs
  • Vacation Fund
  • Mortgage Payment
  • Bills on the Credit Card (I total what all the bills that charge to my credit card add up to, and I put that amount in this account so that I can transfer it to my card at the end of the month. This is the most effective way I’ve found to make sure that I’m not charging to my card more than I can afford to pay off each month).


6. Try to avoid paying interest

Interest is one of the biggest money wastes out there. Paying an obscene amount to someone just for borrowing money is a real buzz kill.

Most people have no idea how much they’re really paying in interest. Take a home loan, for example. Say your payment every month is $900. Now, the bank is smart. For the first while of your 30-year mortgage, the amount you’re paying in interest is super high! They want to make sure that if you default, they get as much money out of you as they can.

So, out of that $900 mortgage payment, it’s very probably that $500 of it is for interest, and $200 is for insurance, and the last $200 is towards the principle(the actual amount of the loan). Seriously, 56% towards interest!!!

If you wanted to cut your mortgage loan by years, and save TONS of money, pay double principle payments each month. An extra $200 a month a month will literally save you tens of thousands.

That’s just one example. But interest, in general, is just such a waste.

Check your interest rates. Check the rate on your auto loans, credit cards, everything! Pay off your bills with the highest interest rates first.

7. Transfer debt to save money on interest

Once you’ve figured out what kind of interest rates you have, you might just start crying. If your interest rates are just out of control and you’ve got debt all over the place, consider transferring your debt to save money on interest.

For instance, if you have a retail credit card such as Best Buy, Home Depot, etc., they have SUPER high-interest rates, like 25% usually! You can go to your bank and get a personal loan with a much lower interest rate, and pay off that retail card.

You can also look into applying for a new credit card that has an “18 month no interest” deal, and make a plan for paying off that debt in those 18 months, or soon after that!

I attached a link here that shows a few different options of credit cards, and who they would benefit the most.

Managing your finances can be difficult, but being aware of your spending, and taking these steps to reduce your monthly expenses can help you to better manage your money!

If you found this article helpful, we’d love if you’d help us out by doing any of the following:



Leave a Reply

Your email address will not be published. Required fields are marked *