Cut Spending When Living Paycheck to Paycheck

making a purchase online with a credit card

When unexpected changes in income happen or you find yourself in over your head financially, it’s important that you cut expenses in as many areas of your life as possible. It’s time to get serious about what you really need and what you really want. These tips will help you spend less at home, on your car, and at work.


Examine your income and expenses and create a spending plan. After reviewing your financial situation, prepare answers to the following questions:

Phone service. According to the Bureau of Labor Statistics, the average consumer pays about $600 per year for cellphone use. Review your cellphone plan and consider alternatives such as eliminating your landline and researching alternative, less expensive cellphone plans.

TV entertainment. Consider what you and your family could live without, if even for awhile. Many TV shows are available online for free and there are many inexpensive movie and sports steaming options. (savings $30–$80 a month).

Subscriptions/memberships. Cancel non-essential job-related online accounts, memberships, and subscriptions.

Food. Get organized with a meal plan to cook the majority of your meals at home. Cut your grocery bill by serving some meatless meals or casual dinners such as grill cheese and tomato soup to save on overall costs. And of course, use coupons.

Extra vehicles. Sell motorized vehicles you can live without: boats, ATVs, recreational vehicles, an extra car. The savings in maintenance cost, storage, and insurance, plus the money you’ll receive from the sale, can be significant.

Activities. If you or your children are involved in activities consider taking a break from them for a season, or until you are financially stable again.

Health insurance. It is important to have health insurance no matter what your financial situation. Avoiding health insurance will cause you to have bigger bills down the road. View these tips on health insurance options.


Multiple vehicles. If you have more than one car, can you get by with a single vehicle? Consider carefully which car would be the better one to keep and which one to sell.

Drive less. Group all car trips by geography so you’re driving less—and using less gas.

Service your vehicles. Although it seems counterintuitive (you’re trying to cut expenses), keep up with regular, preventive maintenance on your car such as oil changes. Doing so helps your car run efficiently and can help prevent unexpected, more costly repairs.

Insurance. Raise the deductible on your insurance policies to lower your monthly premiums. Be prepared to pay the deductible though, if an emergency does happen.


Eat in. Skip restaurant lunches and pack your lunch—every day. Eating two lunches out a week costs about $15-25, and that can add up to $750-$1,250 a year.

Breaks. Skip the expensive breaks by bringing your own. Plan ahead and purchase the soda from the grocery store or a wholesaler and store it under your desk at work or bring it in daily with your lunch. If coffee drinks are your vice, consider buying them in packages at the grocery store and make it yourself, or limit to once week.

Review credit reports. You can order your free credit report every year from each of the three main credit reporting agencies (Experian, TransUnion, Equifax) through Examine the reports and alert the agencies if you find errors. Follow each agency’s instructions for clearing up mistakes. It can take a while for the errors to be corrected, but be patient. Clearing up your credit reports is very important.

Alternative transportation. Consider using public transportation, walking or riding a bike to and from work. While it is often more convenient to drive the extra time could save you money.