Facing Financial Hardship? 14 Ways To Save Money (2024)

Getting by in America isn’t cheap, but lifestyle factors and personal choices can lead to an exponential increase in the amount of money people really need to thrive.

According to a 2019 analysis of consumer expenditures conducted by the U.S. Bureau of Labor Statistics, average annual spending per household worked out to $61,224 at last count, with $7,923 going to food, $20,091 going toward housing, and $9,761 going to transportation.

But then there’s the cost of childcare, clothing and entertainment, and let’s not forget the cost involved in servicing our various debts. After all, average student loan debtwas recently pegged at $32,731 per graduate, which makes the average student loan payment 3. Heck, the average American even had $2,824 in credit card debt in the final quarter of 2019, which means even more payments to make. Must we go on?

The point is, the average American has a ton of bills to pay and, in times of financial hardship, those bills have the potential to turn into a major problem. Whenever there is upheaval in the larger economy, it’s smart to look at household expenses to see what can stay and what can go.

Here are 14 ways to cut expenses and save money in challenging financial times.

Start Using a Budget

Think of your monthly budget as a spending plan for what you really want in life. With that mindset, you can begin using a budgetas a means to reduce spending in areas you don’t care about, while setting limits in other areas of your life where spending is necessary.

The main reason budgeting is so helpful when it comes to cutting expenses is the simple fact that budgets require you to track spending and set reasonable expectations for how much you’ll spend in discretionary categories like food and entertainment. Once you start using a budget, you may quickly find that you’re spending more than you planned on food and fun, and that reducing your spending (even slightly) can help you save considerable sums of money without reducing your quality of life.

Your budget doesn’t have to be complicated. All you really need to do is write out your bills, bank statements and paycheck amounts and then figure out how much you’ve been spending each month compared to how much money you bring in. From there, create a budget that includes predictable spending on bills like your rent or mortgage and car payment, as well as estimates for spending in fluctuating categories. You’ll hopefully find a big difference in how much you could be spending when compared to how much you earn, in which case you can start funneling more money into savings right away.

Use a Budgeting App

If you want some help getting started with a budget, don’t forget to check for third-party apps that can help you get a handle on your finances and reduce your spending in a hurry. Some people swear by Mint.com, a budgeting app that helps you see where all your money is going each month. Others love YNAB.com (You Need a Budget), which helps users craft a zero-sum budget that gives every dollar they earn “a job.”

Other top budgeting appsto check out (some of which are free) include Personal Capital, Clarity Money and Qube Money. Qube Moneyoffers users a digital version of the cash envelope budgeting system, along with functionality that lets people share expenses and work in conjunction with others in their plan.

Shop Around for Auto Insurance and Homeowners Insurance

While some bills are “fixed” because they don’t change much from month to month, this doesn’t mean you’re getting the best deal. And, when it comes to different insurance products like auto insurance and homeowners insurance, you can easily save moneyif you shop around and compare insurance from other providers.

In addition to shopping around, keep in mind that choosing policies with a higher deductible will usually lead to lower monthly premiums. You also can save on insurance by bundling several policies with one insurer, or by signing up for autopay or electronic statements. There are many other auto insurance discountsto be aware of, so make sure to check which ones you may be eligible for.

Cook Meals at Home

Dining out is a fun way to break up the week, but we all know that too many takeout meals can cause our budgets to balloon right along with our waistlines. Cooking at home is significantly less expensive in almost every case. Not only do you get to avoid paying the inflated prices restaurants charge, but you save money on the tip, too.

Not wanting to cook at home is totally understandable, but dining out is an easy thing to cut if you need to cut your spending fast. Consider looking up one-pot dishes you can make in a slow cooker, and try your hand at easy dishes to make that only require a few ingredients.

If you need to make your grocery budget stretch as far as it can go, you also can try MyFridgeFood. This website lets you know what dishes you can make once you list the ingredients you have on hand. Recipes with steps also are included.

Refinance Your Mortgage

For many people, their home is their most valuable asset.Record-low interest rates have made now an excellent time to consider refinancing your mortgage. You could save money by refinancing your mortgage to get a lower APR, as well as a lower monthly payment. Refinancing is also a way for homeowners to trade an adjustable-rate mortgage for a fixed-rate mortgage or to change the length of their home loan.

If you want to refinance your mortgage but aren’t sure how much lower your rate could go, consider checking rates from multiple lenders.

Consolidate Credit Card Debt

The average credit card interest rate is over 16%, which means you could be saving big if you consolidated your credit card debt with a 0% APR credit card or a personal loan. Balance transfer credit cards let you avoid interest for up to 21 months, provided you pay a balance transfer fee (usually 3% or 5%) up front. With that much time at zero interest, you could pay down your debt faster making the same payments you currently do, and every cent you paid would go directly toward the principal of your debt.

Personal loansalso can be advantageous for debt consolidation, since lenders like SoFi offer personal loans with fixed interest rates as low as 5.99%. Compare personal loan rates from multiple lenders to make sure you’re getting the best one.

Switch Bank Accounts

If your bank account charges a monthly maintenance fee or an annual fee, make sure to shop around for a new checking or savings account. The best checking accountsare offered today without any fees, including options from Capital One and Discover Bank. When it comes to the best savings accounts, also be sure you’re earning the highest available interest rates, which, in many cases, are found online.

Switch Cell Phone Providers

How much are you paying for your cell phone bill? Chances are good you could be paying less if you were willing to switch providers.

As an example, Mint Mobile offers excellent cell phone plans that start at just $15 per month, while innovative provider Ting charges you for only the data, text and talk you actually use in any given month. T-Mobile offers international plans that include data and text in more than 200 countries around the world for $50 per month per line or even less with a family plan.

Either way, make sure to check which providers offer good coverage in your area and then shop around until you find the perfect fit.

Get Rid of Cable Television

Paying for a fancy cable television subscription may seem smart when times are good, but this is an easy area to cut when you need to dramatically reduce your expenses. Services like Netflix and Hulu start at less than $10 per month each, so look at switching to streaming and also check out streaming options like YouTube TV and Sling TV.

You’ll need an internet connection in order to stream television into your home, but chances are good you have one anyway. In today’s world, an internet connection has become more of a necessity, whereas a cable television subscription is a splurge you can easily give up if you have to.

Use a Cash Back Credit Card

Using a cash back credit cardcan help you earn 2% back or more on everything you buy, and most cash back credit cards charge low or no annual fee. While you can use these rewards to splurge for something you want, most cash back credit cards let you redeem rewards for statement credits that come directly off your credit card bill.

While a cash back credit card can help you reduce your expenses if you use it only for purchases you planned to make anyway, you should beware of getting into credit card debt. After all, the average credit card interest rate is currently over 16%. At the end of the day, you should only use a credit card for the rewards if you know you can pay your bill in full every month.

Switch to a High Deductible Health Insurance Plan

A high deductible health insurance plan is a plan with a deductible of at least $1,400 for an individual or at least $2,800 for a family, per Internal Revenue Service (IRS) guidelines. Also, high deductible health plans’ total yearly out-of-pocket costs for in-network services must be limited to $6,900 for individuals or $13,800 for families in 2020.

Either way, high deductible health plans, also known as HDHPs, come with higher deductibles in exchange for lower monthly premiums. They also make it possible to contribute to a Health Savings Account (HSA)each year, which can help you save for qualified health care expenses while reducing your taxable income—and thus your tax bill—each year.

Cancel Unwanted Subscriptions

Are you paying for several subscriptions each month that you’re not really using? Maybe you get one of those curated gift boxes for your dog or you have a few razors mailed to your home every six or eight weeks. Or perhaps you pay for an online workout video membership that you hardly ever use.

In any case, it makes sense to go through your credit card bills and bank statements to see which memberships you’re paying for that aren’t necessarily paying off. A service like Trim can do this for you, while also negotiating lower rates on other bills you have like cable or internet service.

Plan Several ‘No Spend’ Days Per Week

It’s easy to make a ton of small purchases that add up in a big way, but what if you decide to go days without buying anything? Planning a few “no spend” days each week, or a couple of weeks each month, can easily bring nonessential spending to a halt during those times, which forces you to work with what you have and use up your resources versus going out to buy more.

If you really want to save money over the long haul, make sure that there are times of the year where you don’t buy anything. Over time, you will save money this way.

Limit Online Shopping

Online shopping can be a problem, and that’s especially true when you’re stuck at home and trying to save money. It’s easy to throw things you want but don’t necessarily need into an online cart and have it delivered to your doorstep, yet the financial impact of even small purchases can be devastating over time.

So, how can you make sure you spend less online? To make things easier, you can start by removing any apps from your phone that you typically spend money with, including apps like Amazon. Also, remove your credit card information from any websites you frequently shop with. That way, you’ll be forced to enter your information manually (and really think about your purchase) each time you absolutely have to buy something.

Further, try to wait at least 24 hours before you make any purchase. Often, sleeping on a purchase decision will make you forget about it altogether or realize you never really needed it to begin with.

Bottom Line

Desperate times may call for desperate measures, but these measures don’t have to feel terrible. You can turn the current (and unavoidable) economic uncertainty into an opportunity to assess where your money goes—as well as where it comes from—and help ensure that your spending patterns and habits match your actual priorities for yourself and your family. Plus, learning how to reduce your spending now can make your life easier if you’re forced to live on less later on.