Reduce Expenses – How to Take Back Control of Your Money?

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As part of your budgeting regime, it’s probable that you will have identified some expenses that you can reduce. As we’ve seen earlier, luxury (discretionary) spending is always a target for reducing your expenses.

According to research by Gallup, Americans spend an average of $101 each day, every day of the year. A total of almost $11 trillion. Most goes on essentials like housing, food and transport. But we also spend a huge amount on discretionary items. From spending in bars and restaurants, to outdoor recreation, Christmas trees, spending in nightclubs, jewelry, pizza, flowers, fishing trips… the list is almost endless.

Of that average $101 daily spend, discretionary spending amounts to around $30 each day. When you make a budget from scratch, the amount you can save by reducing your discretionary spending will surprise you. But once you’ve tackled the spending you don’t have to make, is that as far as you can go?

With a little thinking outside the box and a little effort and time, you could save hundreds or even thousands on all your expenses. Let’s examine a few of the ways in which you can take back control of your money across all areas of spending.


The costs you can reduce or eliminate include fees, interest and penalties. Here are a few ways to reduce your banking expenses.

Avoid Banking Fees

Most Americans use bank accounts (either checking or savings accounts, or both). Your salary gets paid into your bank account. You deposit checks into it, and your bills are paid from it. You withdraw cash to spend or use your debit card. There are many tactics you can use to reduce your banking costs, including:

  • Signing up for free banking. Yes, some banks still offer free banking and savings accounts.
  • Keeping a minimum balance. You will avoid fees and overdraft costs.
  • Only withdrawing money from your own bank’s ATMs. Non-affiliated ATMs will charge you for cash.
  • Signing up for text alerts. Set a limit on your account and receive an alert when you hit that limit – then stop spending.

These are simple solutions, but highly effective. You might also consider digital banking, automating all processes and accessing your account online.

Credit Cards

Interest rates on credit card balances are among the highest in the market. It’s the price you pay for convenience. The best way to avoid paying this interest is to pay your balance in full each month. But there are other ways to reduce the cost of owning a credit card and even profit from it. These include:

  • Setting up autopay to avoid late payment penalties and higher interest rates.
  • Never using your credit card to take out cash – you’ll be charged either a flat fee or interest immediately. It’s one of the costliest ways of putting money in your pocket (or in your checking account).
  • Transferring balances to other lower interest rate cards.
  • Using a credit card that pays you to use it – either by cashback or other reward incentives. Some credit cards pay as much as 6% cashback on purchases made at supermarkets in the United States. If you spend $500 a month on your groceries, you could receive $360 back over the course of a year.
  • Opening a credit card that gives you a new cardholder bonus after spending a set amount.

Some of the best cashback and reward cards will charge an annual fee. The trick is to know which cards to use for each category of spending, so that you are rewarded way more than the annual fee. NerdWallet is a great resource to compare cards and make sure that you are using the best for your spending.

Automate Your Finances

You’ll love this hack. Simply automate your finances. Invest directly from your paycheck by transferring into an individual retirement account (IRA) or certificate of deposit (CD), and use an app like Acorns to invest change from everyday purchases (you’ll be surprised how fast this adds up). Oh, and with Acorns you could have a debit card with no ATM fees, no overdraft fees, and no minimum balance requirements.



Education improves your chances of earning more and securing a better standard of living. But not always.

Look before You Leap into College

College fees are not cheap. In fact, when you go to college it’s likely that you’ll be saddled with debt. According to official figures, the average student debt is $31,172 in the United States. Paying back £393 per month, it will take 10 years to clear.

Before you leap into college, think about the debt you will be taking on and the career path you are likely to follow. Will the debt pay off? Could you do better by building your education online through a website like Coursera? You should look before you leap into college.

Stay in Your State

So, you decided that you must go to college and get a degree to help you go as far as possible in your chosen career. That’s great. Now you must decide which college to attend. Moving out of your state might appeal, but the cost difference could be enormous.

According to research from the HEATH Resource Center, if you study out of state the cost will be almost two and a half times more than staying in your state. Therefore, the most cost-effective education is going to be in your state.

Score Student Discounts

One of the best things about being a student is the discounts you could score by flashing your student ID. From free shipping on goods bought online to discounts of 50% at some of your favorite stores, the savings you could make are tremendous.

But you shouldn’t stop at saving money. Let your non-student friends and family know that you have access to a massive range of discounts at websites like and ask them to purchase through you. Go 50/50 on the discount, and then get them to transfer the money into your checking account via a free service like Zelle. You’ll have your money and profit immediately.



After housing costs, the biggest expenditure for most Americans is food. As measured by the Bureau of Labor Statistics, the average American individual spends $7.64 per day on food. That doesn’t sound a lot, does it? But it works out at almost $2,800 each year. Here’s how you can save a large chunk of change on your food bills.

Make Food at Home

This is the biggest win. On average, the average American family spends $337 each month on eating at home and $263 on food away from home. Eating at home is way cheaper than eating out. And if you’re not a good cook, why not invest in a cooking class instead of spending your money at expensive restaurants?

Plan Your Meals

Cooking at home will save you a lot of money. Planning your meals will save you even more. You’ll only buy what you need – so you reduce waste and do your bit for the planet, too.

You can take planning to another level, too. Cook in bulk. Have a cooking day when you make meals for the next two weeks. Instead of enough for one family chili, make two. Plan your meals, and double up. Freeze them and reheat when you wish to eat them. Buying in bulk is cheaper. Cooking in bulk saves time.

Shop Online

Reduce your food bills even further by shopping online. Right now, only 3% of grocery shopping is done online, but a study by Bain & Company has found that grocery shopping online is likely to explode. It’s easy to see why:

  • Let’s start with convenience. You don’t have to leave the home, find a place to park your car, and then spend an hour or more walking round the store.
  • Straight away, you save money on the cost of gas and parking.
  • You’re not tempted by instore promotions or impulse buys – so you are more likely to stay within your budget.
  • You can also compare prices between stores easily, and purchase from where it is cheapest within seconds. More money and time saved.
  • You won’t be tempted to pop into the nearest coffee shop for a refreshment, saving you more unnecessary expense.
  • Finally, you can use coupons and discount codes to reduce your food bill even further. Oh, and don’t forget to pay with a credit card that pays you cashback on your grocery shopping (up to 6%!).

So, let’s get this straight. Shopping for groceries online saves time, money and effort. And you can earn cash back on your shopping. Why aren’t you shopping online already?



Housing is likely to be your largest monthly cost. Though rental costs vary from state to state, Apartment List’s Rent Report shows that the average rent for a two-bedroom apartment is now $1,180 per month. So, how can you reduce your housing costs, wherever you live?

Size Matters

Size really does matter when it comes to owning or renting a home. The bigger the property, the more it will cost. An extra bedroom will cost around $200 per month more on the rental price nationally. Therefore, your first consideration should be whether you need the extra bedroom. It may be great to have the space for friends or relatives to stop over, but the real cost of this is enormous.

Let’s say that you are a couple with a two-bedroom apartment. The extra bedroom is costing you around $2,400 per year on the rental price. Your parents visit for two weeks in the summer every year. Their visit is costing you $1,200 per week! It would be cheaper for you to pay for a hotel for them for the fortnight they visit.

Larger properties also cost more to run – the cost of heating, furnishing and decorating, for example. Then there is the outside space, which must be maintained. More cost, and more of your valuable free time spent on cleaning, maintenance and repairs.

Whether renting or owning, instead of size of property it is better to consider location. Living near to transport routes, economic hubs and good schools are factors that many people are now prioritizing. Living closer to work reduces transport costs. If you live away from work, living close to good transport routes reduces commuting time. And as parents, who doesn’t want their kids to benefit from a good education?

A phenomenon that you are likely to hear more often is minimalist living – and this can slash your expenses. Minimalism is living without the unnecessary baggage – sell the items you don’t use or need. This is harder than it may seem.

For example, when was the last time you took a book off the shelf to read? Do you really need your collection of books that take up one wall of your expensive spare bedroom? (Haven’t you heard of Kindle!?!) Here’s an idea – why not sell your books on eBay to make cash and start freeing space in your home?

In summary, buy or rent as small as you can in the best location you can – and save even more money by learning how to get free furniture.


Whether buying or renting, always negotiate a better deal. This could be on price, but you don’t need to stop there. In fact, price should only be the start of your negotiations.

You could also benefit from a lower deposit when renting, service charges included for the first six months, new furniture or white goods included, or insurances paid.

If you are buying, consider asking for repair warranties for the first year, payment of closing fees, and cosmetic updates before you take possession.

All these factors and more could benefit you financially. And like they say, if you don’t ask, you don’t get. Use the motivation of the seller or landlord to carve yourself a better deal, every time.

Learn Basic Repairs

We live in a throwaway society, though there are signs that this is changing. You can do your bit for the environment and ease the pressure on your pocket by learning to make basic repairs. Often, repairing something in the home is easier than you think.

Clogged sinks may need a quick filter clean. If water is not draining properly, a mixture of vinegar and baking soda should unclog the drain. For all your simple repair needs, you could find a host of help by searching on YouTube. Better still, to become a DIY expert, benefit from the best online courses at Udemy. Simply search for the skill you need and buy a course for life from as little as around $10.

Auto & Transport

Another major cost, but one that you can reduce with reasonable ease, is the cost of transport. Let’s assume you want a car (or already own a car). Is it really value for money?

Calculate the Real Cost of Car Ownership

When you buy a car, the sticker price is not the true cost. You’ve got insurance to factor in. And services. And maintenance and repairs. Then there is the cost of your gas and the interest you pay on your car loan. And depreciation. Oh, boy, depreciation is going to hit you hard if you buy new. That thing loses 30% of its value as soon as you drive it away from the showroom.

When you buy a car, it’s important to know what it will really cost you in the future – and what it will be used for. Only then can you decide if it is a wise purchase.

For example, if you will use the car to get to and from work, you can measure the cost of car ownership against taking a taxi, bus or train to work. Perhaps you plan to use the car as an investment to work for Uber or Lyft. Maybe you need transport for your hobby.

Of course, there is always the opportunity cost, too. If you invested $5,000 toward retirement today instead of spending it on a car, in 40 years that $5,000 could be worth around $108,000 at an annual growth rate of 8%.

If you are considering buying a car, go into the deal with your eyes wide open. Use Edmunds to calculate the future cost, understand the opportunity cost, and weigh up the true cost of purchase against other options available to you.

Location Matters

For most people, the car is the mode of transport they use to travel to and from work. So, when you are choosing a place to live, consider your transportation costs. Will you need a car to go to work, take the kids to school, or to do your weekly shopping?

A more central location may cost more to rent, but you could eliminate the high cost of car ownership. Perhaps you could car share, or cycle? Now that is the cheap option, and the green one.

Cash Is Not Always King

It is not always best to pay cash for a car (or other major purchases). If you can get a good financing deal, then your cash could be used better by investing it.

For example, let’s say that you have $10,000 and want to buy a car. If you put $2,000 down, you can obtain a loan with an interest rate of 2%. If you could invest the balance of $8,000 and obtain interest of 5%, you will be better off taking the financing deal to purchase the car.

You Could Use Public Transport

Instead of owning a car, you could use public transport. Lots of people do. Sit back, relax and read the newspaper on your way to work. Take a nap on the way home. Do your bit for the environment – and don’t suffer the costs of car ownership.



Do you really need insurance? It seems today that you are offered insurance on almost everything you purchase. Flights. Rental cars. Electrical goods. Computers and cell phones. You can save a lot of money by considering whether you really need insurance when it is offered.

You Don’t Need to Insure Everything

Insurance is a big money spinner for businesses. When you buy a new laptop for, say, $2,000, the clerk will offer you an extended warranty for $100. It seems reasonable, but is it?

You probably don’t need travel insurance when booking flights. Do you need the enhanced insurance when you rent a car? Will you really use the three-year warranty on the washing machine you are buying?

All the insurances and warranties you are offered may not be high on initial costs, but they add up. Instead of buying the insurance that you may never use, deposit the money into a separate savings account. You’ll find that when you do need the unexpected and rare repair, you have the money saved to cover the cost.

Bundle Your Insurances to Save Money

Bundling is a great way to reduce your insurance costs. By combining, say, your car and home insurance from one company, you usually get a better deal. The trick here is to take a little time and compare costs between companies, between bundles, and between individual insurances.

Don’t Let Life Insurance Cost You Your Lifestyle

Life insurance is essential for some, and not needed by others. You should always seek advice when purchasing life insurance – the life insurance you need depends upon your circumstances. A single person with no family may not need any life insurance. A married couple with children should have a suitable level of insurance to cover the costs of childcare should either, or both, die.

It is possible to be over-insured and pay for insurance you don’t need. Do both partners in a couple need to be insured individually, or would a joint life insurance provide the cover needed at a much lower cost? And how long do you need insurance for? The rest of your life, or until the mortgage has been fully repaid?

By understanding which insurance products you need, you will be correctly insured and save money.

Review Your Insurances Regularly

Many of your insurances renew annually. Many people make the mistake of allowing them to renew automatically, either because it’s the easy thing to do or because of loyalty. Let us tell you, there is no loyalty from the insurance company to you.

Set a review date in your diary for a month before any annual renewal insurances are due (for example, your home insurance and car insurance). Use comparison sites and do a little legwork to compare the insurance deals you can get from different companies.

Should you find a cheaper quote, let your existing insurer know. Often, they will match or beat the quote you have received to retain your business.


Tax is a payment that you cannot avoid. If it wasn’t for the taxes we pay, we wouldn’t benefit from public services, the defense of the country would not be funded, and our streets would be unpoliced. However, you should never pay more tax than you are legally required to do so – and there are ways that the tax system can work for you.

Tax Credits

Tax credits reduce your tax bill dollar for dollar, and so are better than tax deductions. There are many federal and state tax credits available, though the onus is on you to claim them. A few examples include:

  • Child tax credit
  • Tax credits for other dependents
  • Earned income tax credit (for those on low to moderate incomes)
  • Tax benefits for education

You may also qualify for Residential Renewal Energy Tax Credit for buying renewable energy equipment or making energy efficient improvements to your home.

Reduce Your Taxable Income

We don’t mean you should earn less! You could earn more and pay less tax, by taking advantage of tax benefits offered by the U.S. government.

The simplest way to pay less tax is to save more toward your retirement, especially in an employer-sponsored plan such as a 401(k) or 403(b). Contributions of up to $19,500 can be made from your pre-tax income in 2021, and over-50s can make catch-up contributions. If you don’t have the option of an employer-sponsored plan, you could save tax efficiently in an IRA.

The contributions you make into a health savings account (HSA) or a 529 plan for saving toward your kids’ college fees are also tax deductible.

A bonus tip is to ask your employer for educational assistance. They can provide up to $5,250 of this tax free every year.

You might also move to another state to reduce your tax liability, though if you do this you must actually make the move – trying to game the system is likely to be discovered and you could owe several years in back state taxes (as this couple learned).

Claim Expenses

There are a range of expenses you can claim against tax at state or federal level, including:

  • Property taxes up to $10,000
  • Medical expenses
  • Childcare expenses

If you are self-employed or have a side hustle, you can also claim expenses that include:

  • Travel and personal living expenses while ‘away from home’
  • Ordinary business expenses
  • Travel and entertainment expenses within certain limits

The best way to reduce your tax bill is to take advice and use tax software to prepare your taxes – a great online service is provided by Intuit, offering users the expertise of professional staff and state-of-the-art technology, and it is an automated tool.


Another essential and unavoidable cost is the money you spend on utilities. But there are several ways that you can reduce your utility bills.

Shop Around

The number one way to reduce your utility bills is to shop around. Utility companies are keen to secure your business and offer sign-up bonuses and better prices to compel you to move to them. An hour or two spent reviewing your options every six to 12 months could save you hundreds of dollars over a year – where else can you ‘earn’ that sort of money?

Renegotiate with Your Current Providers

Like you should with your insurance providers, take your new-found knowledge of the prices in the utility market to negotiate better prices with your current providers. You can also negotiate with the new providers you are considering – they could offer you further discounts to get you on board.

Embrace Smart Home Technology

There are many tactics that you can employ in the home to reduce your utility bills. These range from simply turning all your appliances off when not in use (put your television, broadband router and sound system on a timer to switch off while you are at work or asleep), to the latest in smart home technology.

Smart meters will monitor your energy usage, and eco-friendly lighting will reduce your electricity use and bills. Tankless water heaters will help the environment as well as keep bills down, and you can control your utilities remotely from your smart phone. A little upfront expense could save you hundreds of dollars over the longer term.


There are limitless strategies you can use to reduce the amount you spend on shopping. These range from calculating the ‘time’ cost of each purchase you plan to make, to renting.

Calculate the Cost of Purchases in Hours of Work

This is a great technique and can be used for any purchase you make – whether it is a purchase of goods, services or entertainment. Here’s how it works:

Divide the cost of the item by your hourly rate of pay. Then think: is that number of hours of work worth the benefit you might get from the purchase?

Here’s an example. A fishing trip will cost you $50 for the day. This includes your travel, bait, food and drink. You earn $20 an hour, so you’ll need to work two and a half hours to pay for a whole day of relaxation and enjoyment.

Another example is having lunch out when you are shopping. The lunch – a cold beverage and a pizza – will cost $25. An hour and a quarter of work. Or you could buy a frozen pizza and bottle of coke from the supermarket for just $6 and eat at home – a ‘spend’ of less than 15 minutes of your time at work.

When you start thinking about your purchases in time, you’ll find you make fewer impulse purchases and higher-value choices.

Bonus Tip:

You can also use this method to assess whether you should get other people to do things for you. For example, if cleaning the house is a task you hate and that takes you a day, should you employ a cleaner? If the cleaner will charge you, say, $100 and you could earn, say, $200 while they are cleaning… well, we think you know the answer!

Try Before You Buy

Have you ever given a toy a kid, only to find they use it for a day and then it never comes out of the toybox again? What a waste of money, right? Adults aren’t so different.

Have you ever seen a friend using a new tablet, dash cam, or other piece of tech, heard of the benefits experienced by your friend and decided you must have the same? Then you go and buy it. You use it for a week or two, and then the amount you use it dwindles. Finally, it sits in a drawer unused.

The answer is to try before you buy. Rent from a site like Rentdelite and use the rented item for a week or even a month. Don’t think of it as a waste of money – it’s affirmation money. The rent you spend will either affirm your need or save you from spending a higher amount and wasting it on something you don’t need or want.

You should also consider renting before you buy a car or house. The rent you pay could prevent a big and costly mistake.

Renting Could Be the Option

Do you really need to buy? Could you rent instead?

A lot of people accumulate items around the house, in their garage, or on the shelf that do no more than gather dust for most of the year. That $100 leaf blower that you use once in the fall could have been rented for $10.

Before you buy, consider how often you will use the item you plan to buy. Find out how much it would cost to rent. Does it still make sense to buy?

Don’t Forget Cashbacks

Shopping with cashbacks could earn you as much as 40% of your spending. All you need to do is sign up to a website like Rakuten, EvoShare or Mr. Rebates, and start earning cash when you spend. Each site works similarly – follow the instructions, buy what you were going to buy, see your cashback rack up, and then receive your cash back in a welcome check or PayPal payment.

Personal Care

Personal Care

As a society, we are starting to understand that taking care of ourselves as individuals is crucial to living a healthy life. Highly profitable businesses are being built on personal care – and that profit comes out of your pocket. Is it possible to be big on personal care without the expense?

Eat Healthy and Exercise

First, let’s be clear that expenditure on your health is an investment in you. The better you feel, the more productive you will be. The more productive you are, the more likely you are to gain promotion at work or increase the profitability of your business or side hustles.

Healthy eating and exercise will help you to improve your health. As your health improves, you’ll need to spend less on healthcare products.

And sleep!

Sleep is a wonderful pastime. It replenishes the skin, energizes the mind, rebuilds your physical energy, and helps you lose weight! Really – you burn between 70 and 90 calories an hour while sleeping, and you don’t drink or eat. Sleep is a great diet plan!

When your body benefits from the right amount of sleep, your pocket will, too. You’ll need fewer expensive lattes and five-hour energy drinks. You’ll spend less on skincare products and other cosmetics as your skin tone improves. Oh, and, of course, you can’t spend money when you’re asleep.

Now, Slow Down

Life is lived at 110 miles an hour today. It’s time to slow down. Rushing through each day puts you at greater risk of accidents, injury, and making mistakes.

Whether mistakes are made in your work, at home, or in your business, they will incur a cost. You may have to do a piece of work again, pay for a repair to a washing machine because you overloaded it, or lose a client because your fouled up.

Rushing to work, to the gym or to meet friends can result in a lack of concentration and an accident. If you fall and break your ankle, you may incur medical costs and be off work for a few weeks. You’ll be paying out more and earning less.

Stay healthy, sleep well, and slow down. It’s better for you, and better for your bank balance.


Whether for business or pleasure, you can save pockets full of dollars when you travel. Here are three strategies that win every time.

Use Credit Cards with Rewards (Points and Miles)

Using a credit card to book your travel – flights, trains, hotels, etc. – has a double benefit:

  • First, many include a travel insurance at no cost. If your flight is canceled, you can claim.
  • Second, many pay you points or air miles when you book travel using them.

Book all your travel with the best credit cards for travel, be insured at no cost, and save your points toward the trip of a lifetime – or upgrade to more luxurious seats and hotels each time you travel.

(You can compare credit cards and the rewards they offer at Credit Karma.)

Be Flexible When Flying

A little flexibility when you book travel dates could save you a lot of money. The same goes for time of flights, seat selection, and whether traveling direct or on a layover.

If you think searching through different options is a task that will take hours and a lot of effort, think again. Using an app like Wanderu does all the donkey work for you – and compares trains, planes, and buses, too.

Consider Alternatives to Hotels

You don’t have to be tied to hotels. Airbnb is really taking on the hotel industry, offering rooms and apartments usually at a fraction of the price of a hotel in the same location. You can ask questions about the city you are visiting, too, and Airbnb has now added adventures and experiences to its site.

If you wish to experience the local culture when you travel, you might choose to book a place to stay with locals and take part in the CouchSurfing revolution.



Investing successfully is the key to creating life-changing wealth. Whatever your financial goals, there are three basic steps to ensure your success when investing.

Build an Emergency Fund

An emergency fund is critical to successful money management and key to ensuring you have an income stream to fund your investments.

With an emergency fund in place, should the unexpected occur you’ll be financially prepared. You won’t need to fund the financial emergency by borrowing money or using expensive credit cards. You’ll still be able to invest instead of paying off sudden and unexpected debt.

Decide How Much Help You Need

Before you invest, identify what you know and what you don’t know. Then invest in yourself, to gather the knowledge and skills you need to invest successfully.

As you benefit from greater financial education, you’ll learn which investment products are best to meet your short-term, medium-term and long-term goals.

As you learn more about these and grow the skill set to put your knowledge into practice, your need to rely on expensive financial advice will reduce. As it does, you will have even more money available to invest – and the investments that might also pay commissions to financial advisers won’t suffer from those commission payments.

The greater your financial knowledge and money management skills, the more value you will receive from cost-effective financial services like Acorns and LendingClub.

Create a Diversified Investment Portfolio

As you invest, it is crucial that you don’t put all your eggs in one basket. Different investment assets tend not to move in the same direction at one time. The secret is to diversify across different investment assets and financial products. This should create an investment portfolio in which the fall or failure of one asset doesn’t destroy your wealth – because the rise and success of other assets within the portfolio will compensate.

Bonus Tip – Pay Yourself First

There is one thing for certain – everyone wants a piece of your earnings. Do like the government does and be the first to get paid. The government isn’t stupid. It knows that if it waits until the end of the year to get your taxes, you probably won’t have any money left to pay them. So, it steps in ahead of all your other spending.

You should do likewise. Make saving and investing your priority. Pay yourself first, before you spend a penny on anything else. Automate your payment into your savings account for the day you get paid.

Saving becomes a habit, and you soon won’t notice that you have less to spend. And once that savings pot starts growing, it becomes addictive. You’ll start looking for other ways to cut spending and increase saving.

In summary, reduce your expenses, spend wisely, and become better educated to manage your money successfully and invest profitably.