9 Ways to Seriously Slash Your Expenses
You’ve made your mind up: You’re quitting your job and pursuing your passion.
That’s an amazing decision—and it should feel great—but abandoning a cushy or stable salary to make a career change is a huge leap of faith for your finances, and it can be scary. I’ve taken this risk twice since graduating college. First, I left a paying job to pursue an unpaid internship. Then again, recently, I turned down a paycheck to commit to an early stage startup. And both times, I’ve been exhilarated, but also pretty frightened about my financial future.
Through these experiences, I’ve discovered a few ways to save big and cushion the financial transition. Read on for nine ways to trim (or, well, slash) your expenses.
1. Review Your Rent
Your rent is probably the largest line item on your budget, so think about how you might be able to cut it down. Could you find a cheaper place, move in with a roommate, or rent out your spare bedroom?
If not, or if you want to stay in your current place, practice your negotiation skills: When you get your annual notice of a rent increase, talk to your landlord about lowering it. If you’ve been a great tenant, landlords are often willing to meet you in the middle.
2. Ditch Your Car
Between insurance, gas, maintenance, parking, and tolls, cars are black holes for money. So, unless you live in a city where it’s absolutely necessary to have one, considering selling your car. Public transportation, carpooling with co-workers, and Zipcar are all alternatives. Convenient? Not always, but for hundreds of dollars of savings each month, it can be worth it.
If you absolutely need a car, consider how you can cut down on the expense: Can you trade in your brand-new ride for something older with lower payments or better gas mileage? Can you carpool to share gas and toll costs?
3. Save On Utilities
Most utility companies offer reduced rates and energy assistance programs for low-income households, and if you’ve taken a major pay cut or you’re going without an income for a while, you may qualify. Don’t be afraid (or embarrassed) to call your providers to check—a little bit off your bill each month can add up to a lot in the long run.
4. Cut Down on Cable
Yes, having four different cooking channels is amazing, but ditching your premium cable package can easily save you $100 each month. Cancel your cable service and cozy up with your computer instead—Hulu and Netflix offer plenty of entertainment to fill your lazy Sunday, for a fraction the cost.
5. Be Frugal About Food
You’ve heard this one before, but it’s tried and true: Stop eating out! Nothing blows a tight budget faster than $12 cocktails and 20% service charges. If you don’t love to cook, try this: At the beginning of the week, make a big one-dish meal like chili or stir-fry. It’s fast, it’s cheaper than takeout, and it’s easier to say no to dinner invitations when there’s food waiting in your fridge.
That said, you don’t have to completely cut out your social life—just make sure you’re making frugal choices. Scout out happy hours with deals on drinks and food by using the Happy Hour Finder App.
6. Put Your Gymming On Hold
Cut out a hefty monthly fee by cancelling your expensive gym membership. There are lots of other options for free workouts—go hiking or running outside, or join a weekly sports team. In the winter months, look into at-home workouts like the Tracy Anderson Method or Wii Fit.
7. Learn How To Have (Free) Fun
Hint: When you take a major pay cut, you will want to find some equally broke friends. Challenge each other to fill your weekends with cheap activities: If you’re outdoorsy, plan a hike, bike ride, or beach day. If you’re artsy, find out which museums offer free days or plan a trip to your city’s gallery district. And if you love shopping, get your fix by bargain hunting at vintage flea markets.
8. Keep an Eye on Auto-Payments
Auto-payments have a sneaky way of going unnoticed. Between Netflix, magazines, bike shares, Zipcar, and Amazon Prime, it’s easy to lose track of the hundreds of dollars every month that automatically come out of your account. So, review your credit card statements from the last year for any regular payments, and think carefully about which services you really need (and which you could live without).
9. Never Go Uninsured
That said—the one service you should never cancel is health insurance. Yes, it may be a lot of money out of pocket every month, but it can save you in the long run: One of the easiest ways to rack up enormous debt is through medical expenses.
Before leaving your steady job, make sure to inquire about the duration of your health insurance plan, and start researching new options so that you’ll have new coverage as soon as your employer-sponsored plan ends. You can consider joining your parents’ plan (if you’re under age 26), or investigate independent options designed for self-employed individuals or freelancers.
While these cutbacks are never fun, try not to focus on the negatives. Instead, look at these sacrifices as fuel—without the burden of overwhelming expenses, you can put all of your energy toward your dream. Six months from now, these sacrifices will feel like second nature, and you'll feel happier than ever.
Tell us! Have you ever taken a pay cut? Where did you cut back?