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We all want to avoid the stress that can result from our personal finances. Learning how to reduce your expenses is another aspect of budgeting that can be equally as important.

Learning how to regulate and reduce your expenses can be the key to having control over your finances and reducing stress. Below is the reason why reducing your expenses is a good thing to focus on. As well as five ways to work towards decreasing your expenses.

Why Should You Reduce Your Expenses

There are two ways you can view learning to reduce your expenses. For those who are not in debt, learning to reduce your expenses can still be extremely beneficial. The one reason being that it can help you from ever falling into debt. 

Or maybe you are in debt, learning to reduce your expenses can reduce the severity of your debt from increasing. Additionally, it has the benefit of changing your spending habits past being in debt. So that when faced with decisions concerning spending, you will be confident in knowing how to do so for the benefit of your finances.

1. Reduce Your Fixed Costs

Reduce housing expenses

Evaluating and comparing your rent price to those in your area can help give you perspective. Knowing whether you are paying twice as much as your next door neighbor is important. If this is the case for you, moving areas so that you are not paying more than you ought is a good idea. Bottom line is that it is important to know how your rent compares to others in an effort to potentially reduce your expenses.

Reduce Energy Expenses

Money is something we can all see tangibly, we can also clearly see when we are wasting it or saving it up. With energy on the other hand, it can be harder to evaluate when we are wasting it. 

Reducing your energy expenses can help towards reducing your overall expenses. Not being able to tangibly see your energy expenses could possibly mean you are wasting more than you thought. Doing things as simple as making sure to turn off the lights, switching to more energy-efficient light sources such as LED, or energy from solar-powered devices, are all effective means of decreasing your energy expenses.

Reduce Utility Expenses

There are often things we use or spend our money on that could be avoided to our financial benefit. One easy example of this is cable. With the cost of cable averaging $107 per year, it is clear that such an expense can be also avoided. Consider getting rid of something that you might not even be taking full advantage of with so many great alternatives to cable existing, and it can be another great way to reduce your expenses.

Additionally, there will always be a premium option with all cell phone carriers. These are almost always advertised with better, more reliable service that you cannot live without. In the effort to reduce your costs, see whether a phone carrier offers the same opportunity with lower pricing. Even if there a few less perks, you might find that you didn’t need them anyway.

2. Reduce Your Variable Costs:

Reduce Your Grocery Expenses

As with many things, your groceries can be a pithole of extra expenses that you may not have realized. By no means are we saying you should buy less food to try to reduce your expenses. Instead that there are a few ways to shop for your groceries that will help reduce your expenses. In an effort to do that, consider the following options:

  • Shopping savings or sales
  • Shopping things in season, which are cheaper in general due to the lack of fees from importing fees
  • Shop in bulk, as it is usually less expensive on the whole
  • Shop at cheaper places

Reduce Your Transportation Expenses

Transportation can be expensive. Driving to and fro everyday definitely adds up. Sacrificing your comfort for efficiency can be hard but completely worth it when trying to reduce your costs. Turning to alternatives such as carpooling, Uber, or your local transportation systems can help decrease a healthy fraction of your expenses.

Reduce Your Entertainment Expenses

Often times we do not realize that in order to be entertained, we don’t have to spend as much money as we do. Trying activities that are free can be substantial way to save money. Things such as going to the park for a picnic, open mic nights, or going to the beach. Even if you cannot find free activities, there are often activities that are discounted or free on certain days.

Our hobbies, another form of entertainment, can be equally as draining for our finances. Try searching for inexpensive new hobbies that bring you as much joy rather than the ones that cost considerably more in an effort to help you save.

3. Reduce Your Debt Costs

Reduce Your Debt Expenses

When in debt, it can be hard to decide which way to go in order to relieve that debt. However, one thing we can all agree on is that when in debt, the goal is to reduce the amount you are having to pay as quickly as possible. This is in order to lower the debt’s often detrimental effects on our finances. A clear strategy to getting out of it would be to reduce the amount of debt that is currently compiling in your finances. 

A great method to do so is known as the Avalanche method. With this method, your first priority, after paying all your minimum payments, is to work towards paying off your debts with the highest interest rates and eventually work down from there. The benefit is that in the end you will have to pay less overall in getting rid of your debt. 

To see the Avalanche method’s effectiveness, we can compare it to a similar method, known as the Debt Snowball method. With this particular method, after paying off your minimum payments, you work towards paying the smallest debt first and work upwards from there. Mathematically according to a study by Forbes, although it would take the same amount of time to pay off your debt, you would save more in interest with the Avalanche method. The only catch, however, is that it can be hard to stay motivated with the challenge of taking on your debt so headfirst. Nonetheless, the sooner you do, the sooner you can alleviate stress over your personal finances. 

Reducing expenses is a good way to reduce your financial stress and avoid such things as debt relief and bankruptcy. That said, finding other methods of reducing your expenses on debt that work best for you personally is always best. In the end, any method that helps you decrease your overall expenses as effectively as possible is great.


Hopefully, understanding how to reduce your fixed costs, your variable costs and your total debt costs can help you save money and help relieve the financial stress in your life.

Post Author: Delali

Delali is a writer for Ascend where she shares in depth personal finance articles on such topics as financial hardship, student loan hardship, and ways to reduce your expenses.

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