How to Reduce Living Expenses?

Reducing living expenses is an art, not a science. There is no exact approach nor proven or right way to do it, rather, it takes creativity, practice, and dedication to accomplish it. 

In my article, “How To Budget and Save Money “, I have instructed to categorize expenses into either fixed expenses or discretionary expenses.

For those of you how doesn’t know, here is a review of fixed vs. discretionary expenses

Discretionary expenses are your spending on non-essential things or your “wants”. For example, buying coffee, video games or make-up, clothes, etc will fall under this category.

Fortunately, cutting your expense in this area “should” not gravely affect your lifestyle. Sure, it may take a little (or big) adjustment, but you will realize later-on that you can live without these things.

Fixed expenses, on the other hand, are your spending on essential things or your “needs”. Expenses that fits this category are your mortgage or rent, utility bills, telephone/cellphone bills, etc.

The big question that we will answer today is “How to reduce your household income?” and the quick answer for that is to use the 3C’s strategy: cut out, cut

What are the 3 Cs?

The 3 Cs of budgeting are cut back, cut cost, and cut out . 

Cut Back

I have a confession to make. I tend to consume things more if I know I have lots of it hidden somewhere. Who can relate?

There is a good chance that you always stock on items especially when it goes on sale. Stocking on items is a common practice in almost every household. If you think of it, this is actually a good strategy to save money.

It becomes a problem when you unconsciously use things excessively when you know there is more of it – it is wasteful and expensive.  Interestingly, if you know things are running low, you instinctively consume it sparingly. If we are able to trick our mind into believing that we do not have enough, then it will help us conserve what we have. By doing so, we will be able to save money since we will purchase things less often.

Why Should We Cut Back on Our Groceries?

Quickly survey your budget right now and see what is your biggest expense? I will take a guess… It is your groceries (well except for your loan)

Since grocery budget takes a big bite to your budget pie, then it would be beneficial if we could apply the cut back strategy on it!

How Can We Apply the “Cut Back” Strategy?

My first suggestion is to not buy in bulk. Just buy as you need them.

This strategy is effective if a big chain/discount grocery market is close to your place and you have time to walk and buy things as you need them. Of course, the downside is it might be more expensive because there might be times when the items you normally buy are not on sale. It also takes more time and effort to do this.

So why am I suggesting this? Well, it is like what I have said earlier. If you know that your supply is low, then you tend to use things sparingly. So if you are not stacking up on things then you will use less therefore buy less equal to effectively lowering your household income?

Still not convince? Let’s us have a chat in the comment section. 🙂  

If you are not convinced with my first suggestion then maybe this alternative strategy will work for you… Hopefully!

My other suggestion is buy in bulk but open new items on a set date. Buying in bulk will save you time and definitely money, but in order for you not to excessively use those, be sure to put a schedule when you will open a new stock and let everyone in your household to know the schedule. It might take a little while before everyone gets used to the system, but boy oh boy! You will save a ton of money with your groceries when you and your family learns how to consume things conservatively!

Where else can I use “Cut Back”?

You can also use the “cut back” strategy on almost any part of your life. Here are some suggestions:

  1. Cut back on eat-outs
  2. Cut back on shopping sprees
  3. Cut back on your phone/cable/internet plans 
  4. Cut back on junk foods
  5. Cut back on your coffee runs
  6. Cut back on in-game purchases
  7. Cut back on make-ups
  8. Cut back on movie nights
  9. Cut back on expensive get-aways
  10. Cut back on the use of tissue paper
  11. Cut back on your water consumption when watering grass and plants
  12. Cut back on your electricity consumption by turning off (not on standby mode) electronics and lights when not in use
  13. Cut back on the use of a/c heater
  14. Cut back on your gas bills by driving less aggressive or take public transportation
  15. Cut back on seasoning

Cut Cost

There are essential items/ services where you simply cannot use the “cut back” strategy because the price per usage is already set or the benefit that you get will decrease if you reduce the amount consumed. Some examples are medicine, other health care expenses, insurance (home, health, car), subscriptions, mortgage or rent, and loans (student, car). I hope you see what I mean about reducing the usage of with these type of expenses 

In this case, the other C strategy that you should use is “Cut Cost”. This strategy would force you to find an alternative source or brand that are cheaper than you normally use. The downside of this strategy is the quality of an item goes down with its price so before you decide which items/services need to be replaced, ask yourself first if there is no detrimental effect to you if you use a lower-quality-items/services.


Here is my list of suggestions on how you can use this strategy
  1. Buy generic over-the-counter medicine
  2. Ask your physicians if there is a generic version of the medicine you are taking
  3. Buy store brand or private label products instead of brand name products
  4. Replace your “V.I.P” tier phone/cable/internet plans into a basic or mid-tier plan
  5. Sell your luxury car and buy a cheaper but reliable car instead or get an electric car
  6. Get term insurance instead of life insurance
  7. Request to increase your deductible on your car insurance to lower your monthly fees (but be sure to save monthly)
  8. Consider using a “usage-based insurance” instead of a regular car insurance
  9. Replace broken/dying appliances with energy efficient models
  10. Try exploring other provinces/states instead of going out of the country
  11. Cook your own breakfast, lunch, and dinner
  12. Brew your own coffee
  13. Eat home-grown vegetable, fruits, and herbs
  14. Think of downsizing
  15. Interact with your family/friends instead of binge gaming or watching

Cut Out

I like to think this strategy as your last resort meaning I hope that you will use this strategy only if the first two strategies are not enough to reduce your household expenses so your income can cover all of your expenses,
be able to allocate some money to pay off your loans if any and have extra money to put as an investment. Of course, if you find any items in your budget that is no longer relevant to you, then go ahead and cut it out from your budget

In this strategy, you will have to choose which of your expenses is the least necessary to you then remove that from your budget. Expenses that can be easily removed from your budget are your “wants” such as video game/make up, eat-out, movie night, junk food, apparels, bags, etc.

These items and activities “should” not have a detrimental effect to your lifestyle although I know that this might affect you psychologically in the first few weeks as you adjust with these new changes in your lifestyle. I want to assure you though that these things are wants and not needs therefore you will still live even if you do not have these things in your life.

Of course, it is still better if you do not have to give up on these things/services or at least I am hoping that these changes will only be temporary.

Suggestions/ Feedbacks

That’s all for me Wealth Builders! Did this article help you in any way? If it does please let me know which part of the article added value to your life the most and please click that social media share button so others can learn from it as well.

If you find this article not helpful at all, please share your concern on the comment section as well so I can continue to improve and provide top quality articles.

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