Personal Finance

Ten simple ways to reduce your monthly expenses

With so many demands on our time and our wallets, it’s difficult to keep track of it all. We can easily slip into bad habits where we lose control of our finances and find it hard to know where our money goes. It needn’t be this way—following a few simple tips can produce significant benefits for our financial health.

Most of us get to the end of the month and wonder what happened to all our hard-earned cash, hoping that one day we’ll be able to get through the month without constantly checking our bank or credit card balances, or worrying about whether our card will be accepted in a shop or restaurant.

The truth—if we’re honest with ourselves—is that most of us simply spend too much. A look at rising UK household debt levels shows us that overspending is a problem across the board.

Graph showing the rise in unsecured UK household debt 2009- 2019
UK household debt excluding mortgages

Yes, I know it’s kind of obvious, but our spending habits, just like any other habit, become ingrained in our daily lives and routines. We tend to normalise them and accept them as being necessary and inevitable—‘of course I need to spend more than £100 a month at Costa…’

But, just like any bad habit, our spending habits can be very difficult to break. Sure, we’d all like to spend less and have more money in our (increasingly virtual) pockets at the end of the month. So, with this in mind, there are many simple things you can do to cut down your expenses and still have lots of your monthly income left to spend, save and enjoy. Here are a few:

1. Cut the Costa Coffee

Okay, we gave you this one already, but think about it: two coffees a day at £2.50 a pop—that’s £25 each work week, or £108 per month. And that’s without any food, water or extras that we all know we sometimes can’t resist.

If you really can’t get going in the morning without your cup of joe at work, buy a flask and make it at home. You can buy an electric grinder and a 1 kg bag of roasted coffee beans for the cost of a week’s coffees you buy from a coffee shop. And the cost of each DIY freshly ground coffee? Less than 25p. Makes you think, doesn’t it?

2. Spend a month tracking your spending

If you’ve never tried this, you should. Even if it’s just once, this can an eye-opening (and also an eye-watering) experience. Keep track of everything you spend: takeaways, travel, food, newspapers, online, monthly subscriptions, nights out, everything.

Once you have everything written down or in a spreadsheet, it will be much easier to see where all your money is really going, and where to start trying to cut down.

3. Be smart in the supermarket

Shop in the cheaper stores and buy the supermarket’s own branded products. These days they’re really not so different from the ‘real thing’. The next time you’re there, compare the price of Heinz ketchup to the supermarket’s own brand, and do it with other staple products you regularly buy, like bread, pasta, tinned foods, and so on. Over the course of a month you’ll find you can make some hefty savings.

How many of us go into a supermarket with a detailed list and only buy what’s on the list? We are very prone to suggestion, and the supermarkets know this. It’s why all the nice-smelling fruits are positioned right by the entrance as we go in. It’s why the sweets and chocolates are placed ‘conveniently’ right by the cashier as you’re queuing up to check out.

Make a list, make it complete, and stick to it. Better still, do your grocery shopping online—that way you avoid any possible temptation for impulse purchases. Just be careful to understand the delivery charges and order the right quantity, and don’t do what I did, which was order 24 packs of 24 toilet rolls, instead of just one. We live and learn…

4. Cycle or walk to work (and do you really need that gym membership?)

Many people understandably take the easiest mode of transport to work. However those looking to pinch pennies can save a significant amount by choosing an alternate mode of transport. For example, cycling to work can save you £1,700 a year over driving. Car insurance costs alone will set you back at least £600 a year, plus given the typical petrol car gets 36 mpg we spend another £380 on average on petrol per car.

Get moving more, reduce your risk of cardiovascular disease, and end the month with more money to play with.

And while we’re talking exercise, if you’re not using your gym membership, or only using it a handful of times a month, do you really need to keep shelling out for it? There are plenty of ways to get and stay fit without going to a gym, so if your subscription is burning a hole in your pocket, maybe it’s time to cancel it and start running or cycling instead.

5. Take your own lunch and snacks to work

While the quality and variety of sandwiches and other lunch options is huge these days, virtually none of them are cheap. Just like the coffee, if you’re spending a few pounds a day on your lunch every day, that can very quickly mount up to well over £100 or even £200 a month—a significant portion of the typical household food bill.

If you’re a fan of a particular shop’s sandwiches, have a look online—there are so many recipes and websites that will help you make them. And you’ll save yourself a packet in the process.

6. Watch those big nights out

For some of us, it’s part of the weekly routine. A night out for drinks with colleagues, or perhaps a meal and drinks with our other half. We’re not saying you should become a hermit, but maybe try doing an alcohol-free month and see how much you save. Not to mention the health benefits. Given the average UK household spends £868 on alcohol each year, a dry month can save you around £72.

7. Phones, Internet, gas and electricity

How confident are you that you’re on the best deal? The market changes constantly, and it’s really difficult to stay on top of things. According to Which?, people who switched utilities between November 2016 and April 2017 could save an average of £237 a year on their gas and electricity bills.

So set aside an evening, or a wet and windy weekend afternoon, pour yourself a glass of wine or a cup of Earl Grey, put your favourite album on, and spend some time figuring out whether it’s time to change your phone or Internet provider, or your utilities. Go on, try it—you’ll surprise yourself!

8. Ensure you have the best insurance

Whether it’s life, health, travel, house or motoring insurance, it’s almost always possible to shop around for better deals. Again, use price comparison sites here, and you can save yourself a small fortune.

9. Cancel those unused subscriptions!

It’s easy to take out subscriptions to things like magazines, websites, Netflix, Spotify, Amazon Prime, Medium, iCloud, to name but a few. Individually they may not cost you much, but stack them on top of each other and they can really add up.

So check your bank and credit card statements to make sure you know what you’re spending (they’re easy to forget about), and if you don’t need it, get rid of it!

10. Simply your finances

How many credit cards do you really need? Keep the one you use the most, and jettison the rest, especially if you rarely or never use them. If you’re running a balance month to month, the interest charges can be enormous. Think about switching to a credit card that offers a 0% balance transfer deal. But be careful—the interest rate will likely be very high once you come off the 0% rate, so stay organised and avoid paying hefty interest charges. The price comparison sites will tell you who is offering the best deals.

Also, think about going card-free for a month. This can be really liberating. Just keep cash with you and try to get through the whole month without using cards (or your phone, if you’re that way inclined).

Handing over crisp bank notes is psychologically more painful than using non-cash payment methods, so it may make you think twice before you shell out for that new pair of jeans or another £20 round of drinks.

Reducing your expenses: the final word

The tips we’ve provided here are just the tip of the iceberg. There’s really no end to what we can do to streamline our finances and break our spending habits. There are dozens more ways to reduce our monthly expenses and save more money, and every one could have its own article written about it. In fact, if you have any top tips to save money, please share them in the comments section below!

Breaking bad habits and making a few simple changes can give you far greater control over where your money is going each month. Following just a few of them will make you happier, healthier and give you plenty more pennies in the piggy bank. And even if you’re in the enviable position of having enough money to not worry about paying your rent, your mortgage or your monthly necessities, you know you’re still spending too much on all the other stuff, right?


Our team of writers has expertise in business, car, travel, home and pet insurance as well as personal finance issues.


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