Debt Diversion #4: Optimize Your Budget – 8 Quick Ways to Cut Your Expenses

At this point, you have completed steps 1-3. If your budget is still negative after all your expenses, I want you to go through each of your expenses and see if you can cut tiny bits off each expense to allow your budget to balance. It is vital that you are able to at least pay everything on time and pay minimums before we even start working to diligently cut expenses and increase income.

We will cover a more thorough expense cutting later in the Debt Diversion. However, here are some quick cuts that you can do today to get your budget moving in the right direction, towards a positive cash flow.

Downgrade Your Cable/Satellite Package

Most people do not realize there is a lower cable package even if you have what the cable company refers to as “Basic Cable.” There is one package below this that is NOT advertised. It usually runs from $7-10 a month and only provides you with basic channels. You may not want to cancel your cable. So, this is a great quick fix until you have more money coming in and can afford a better package. Downgrade and your cable company may even send you a special offer to upgrade in a month or two.

Ask for a Hardship Program with Your Creditors

This simple five-minute phone call can significantly lower your credit card payments for the next 6-12 months. The downside to this is you cannot keep using the cards while you are on a hardship program. However, if your budget is balancing, and you have included all your expenses, then you have no need for a credit card at this time. You can read about how I reduced my payments and interest with American Express here. It doesn’t get any better than zero percent and a reduced minimum payment.

Ask for a Deferment on Student Loan Payments

If you are paying student loans and currently cannot pay all of the bills on your budget, then you will probably qualify for a “financial hardship” deferment. Simply call your student loan company, inform them of the situation, and ask if they can send you paperwork for a financial hardship deferment. If they cannot do this for you, then they may be able to put your loan on a different repayment schedule, which will cause the payments to go down for a short period of time.

Ask for an Equal Payment Plan

Most electric companies offer some type of program where you can pay the same amount every month. This means no surprises in the heat of summer and the cold of winter. Your payment is the same year round. This makes it easier to budget your expenses and may possibly lower your payments for electricity for now. Depending on how much you have used in the last year, it could cause your payment to go up. So, ask what the payment will be before you enroll. At the end of the year, if you have used less than what you have paid in the last 12 months, you get a refund! 

Use Angel Food Ministries for Food

If your expenses are super tight, it may benefit you to use a service such as Angel Food Ministries. This program is open to anyone regardless of income. You can get enough food to feed a family of four for one week for $30, and these are balanced meals. This may not be a long-term solution for you, but it will allow you reduce your food budget expense for now until we are able to delve deeper in reducing expenses.

Cut Car Trips

Sometimes we do not realize how much gas we are using. We just go until the tank is on empty and refill. Think about everywhere you go each week and see if it is possible for you to cut any of those trips. Can you shave off one trip each week? Can you carpool one day a week with a co-worker? Could you combine all your trips and errands into one trip? Consciously see how much you are driving around. Joy rides are a luxury. For now, cut what you can in travel so you can conserve your gas. See if you can reduce it by $10 a week if possible.

Cut Subscriptions and Memberships

If you currently have subscriptions to magazines and papers, cancel these. If you get the paper for the coupons, then just subscribe to the Sunday paper and no other day. This is money that you cannot afford to be spending right now. Also, if you have a gym membership you are not using, cancel it if your contract is up. You should also cut any other memberships that you are paying for automatically with a credit card every month, and not using. Wasted money is wasted money whether it is automatically charged to your card every month or comes out of your wallet.

Cut Eating Out and Entertainment Periodically

I am not asking you to stop having fun or stop eating good food. However, for now, because you are trying to balance your budget, try to stop or reduce all eating out. If you eat out every day, cut it down to once a week. If you eat out once a week, cut it down to once every two weeks. If you have friends that like to eat out, consider asking everyone to do a potluck and host it at your place. Find solutions where you are still enjoying the company of others and fun without spending money. Be creative and pinch those pennies in your eating out and entertainment. Even reducing it is going to help rather than doing nothing at all.