How to Lower Your Cost of Living & Save Money Right Now

How to Lower Your Cost of Living on white rectangles overlaid on two hands hold an iPhone open to the calculator app and multiple dollar bills in the other hand.

The 2020s have already proven to be years of financial struggle for many. With inflation at 7.7% and mortgage interest rates at 7.63% currently, it’s not hard to see why so many of us are feeling the squeeze of tighter budgets and increased debt. I’ve looked at dozens of blog posts, articles, YouTube videos, TikToks, and more for what we can do right now to make a measurable impact on our finances. And honestly? I found a lot of the content only capturing the low hanging fruit (i.e. stop eating out, buy cheaper stuff, look for better bargains). But is that really going to help you lower your cost of living and start saving money right now?

The answer: probably not – unless you eat out for every single meal or have a luxury goods habit. My goals is to show you what I would personally do (and have done) to lower your cost of living. I have loads of posts on how to save money and be frugal and I’ll link those throughout this post – but think of those as extra credit 🙂

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Consume Less

Consumer goods, electricity, water, gas, everything could be consumed less.

This seems like a “duh” thing, right? But stopping shopping or slowing your rate of consumption is hard to do and is potentially the biggest impact you can make when lowering your cost of living. We’re all so used to this way of life as consumers. We shop for fun or to improve our mood, we like the A/C low in the summer and heater high in the winter, eating out for meals multiple times a week is normal, and everyday we’re told we need newer, better things.

Make a list of what you do and consume everyday.

Keep track of:

  • What you eat for breakfast/lunch/dinner/snacks – don’t forget drinks!
  • How far you drive for your commute or for errands
  • What you buy at the grocery store
  • How low/high your thermostat is set
  • How much cellular data you use
  • What stores you visit and what you buy
  • What food and other goods you throw away
  • How long your showers are

During what part(s) of your day do you think you could consume less?

Shorter showers? Adjusting the thermostat a few degrees lower/higher? Doing all the errands at once to avoid driving more? Put your phone in airplane mode to use less data? Pack your meals instead of eating out?

Once you have written down in front of you what you consume on a daily basis, it’s hard to ignore the fact that it’s probably a LOT more than you expected!

Focus on two or three of your list items that might be indicating that you’re consuming too much. Small efforts like making coffee at home (~$5 saved each time) or adjusting your thermostat (~$10 saved each month) have a compounding effect. Once you see how easy these small changes are and that you are actually saving money, you’ll want to figure out what other areas of your life you can consume less in in order to lower your cost of living.

The “consume less” mindset

Just because you are consuming less to lower your cost of living doesn’t mean you are depriving yourself. You’re simply allocating your assets (money and time) to what matters more.

While lunch out a few times a week or a new shirt once a week may not seem like much, if you avoid making those purchases going forward, you now have funds to put somewhere else. This could be paying down debt or putting into savings for a larger, more important purchase or for your emergency fund.

Think: I’m not buying this new shirt, because I already have a dozen perfectly good ones AND this $20 can be used to pay down my credit card balance.

Every time you actively choose to consume less, celebrate! Write it down: the date, what you didn’t buy, and the money you saved. From now on you can go back to this list and know that you can keep on consuming less than you used to.

Extra credit reading >>>

Use What You Have

Now that you’re buying and consuming less so you can lower your cost of living, you might be thinking “Well what do I do now?”.

You use up what you already have!

Don’t be afraid of wearing something out (like your favorite sweatpants or favorite wooden spoon)! They’ve lasted you this long, they’ll likely last a while longer with proper care. And if a favorite of yours is on its last leg, you can plan ahead – make a budget and maybe start a sinking fund for it if it’s an expensive item. Or maybe you’ll find a new favorite to use that you already own!

When you want to “refresh” your home decor or your wardrobe at the change of the seasons, sort out your current and stored away items before adding something new to your cart or going DIY crazy with $97 in craft supplies.

Extra credit reading >>>

You need to see what you own

Have you ever bought something because you could have sworn you had already had one but now it’s disappeared only to find the item you’ve already replaced just a few days later?! Hopefully this isn’t just me!

To really get a handle on using up what you already own, you need to see it all first. You need to declutter.

No, decluttering doesn’t mean that you get rid of everything except for your favorite sweatpants and wooden spoon! It means that you rid yourself of the excess stuff you don’t like, won’t use, broken things, and straight up trash.

Once the excess is gone, you’ll find a joy in a space reclaimed. You might take more pride or comfort in using the things you already have. It’s even possible you can make do without buying anything new for a long, long time! Bonus points if you sell what you declutter and turn that money into a debt payment or put it towards your savings.

Extra Credit Reading >>>

Repair and Mend

Picture this: you’re minding your own business, wearing your favorite sweatpants and you bend down to clean up your kids’ toys from the floor for the thousandth time today when you suddenly hear “rrripppp!”. Yikes. Your favorite sweatpants now have a hole in a not-so-wonderful place. What do you do – trash them or fix them?

10 points if you said to fix them!

Repairing and mending items so that you avoid buying new is a skill and you’ll certainly learn it when you start to learn how to live below your means.

Some basic things to have on hand for when you need to repair things:

  • Basic sewing kit
  • Duct tape (it fixes a lot, okay?)
  • Screwdriver, hammer, tape measure, level
  • Superglue
  • YouTube
  • Patience

I’m sure my husband could add to the list as he does a lot of repairing of stuff and things, but we aren’t needing to make home repairs here – just “stuff” repairs. So simple tools, a needle and thread, and some duct tape should do.

Repairing things does take time and it probably isn’t something you already know how to do. This is where YouTube and patience comes in. You can find practically anything you need to know how to do on YouTube. With a little bit of patience and watching the video multiple times, you’ll likely be able to make the repair yourself. If not, ask your friends, family, or neighbors – someone within your circle probably has the knowledge.

Quick note on planned obsolescence

Sometimes, a item can be truly broken beyond repair. Other times, it could be cost prohibitive to get the item repaired by a professional or purchase replacement parts for it. Or the worst, you know it’s broken and there is no way to access the broken competent without completely destroying the item. The two latter options are what is called “planned obsolescence” – when something is designed to last only a certain amount of time rather than designed to be durable.

Make a Budget

What’s a budget? It’s a plan that you make that tells your money what to do and where to do. It shows you how much you spend, what you spend it on, and how much you save. So how do you make a budget? So glad you asked!

1) Add up your essential expenses

Essential expenses are the ones that you can’t live without like:

  1. Housing (rent, mortgage, home/renter’s insurance, regular upkeep)
  2. Utilities (water, sewer, gas, electric, NOT subscription services like Netflix)
  3. Food, Household Goods, Clothing (groceries, cleaning, diapers, necessary clothes)
  4. Transportation (loan payments, gas, regular upkeep)
  5. Health Insurance

These are the things that have to get paid. Essential expenses will be your base spending each month.

2) Calculate your savings/emergency savings goals

An emergency savings account allows you to rest easy knowing you have the funds to cover a true emergency (medical bills, auto repairs, etc.).

What was your total of essential expenses? You should have 6 months worth of essential expenses saved in your emergency fund. NOT 6 months of income saved.

For easy math, let’s say it is $2000 monthly. Multiple $2000 by 6 = $12,000. That’s the total for your emergency fund.

If you lost your job suddenly or if you couldn’t work due to illness, your emergency savings would provide for your family for 6 months.

3) Debt payments

Identify all debt payments and total the payment amounts.

Debt payments can include:

  • Student loans
  • Credit cards
  • Personal loans or payday loans
  • Medical debt

These debts are outside of what your essential expenses are – therefore, it excludes your mortgage and auto loan – and should be paid every month. But can you pay more? If so, use the debt snowball payment methods to pay down debts faster.

4) Calculate your income

Check your bank statements or look at your last 2-4 pay stubs to find your income. If you share expenses with a partner, add their’s in too. Even if your income is variable, you should still do this step. For variable income, find the monthly average over the last 6 months.

Take your monthly income, subtract your essential expenses and debt payments. Do you have any money left over? Put that money towards your emergency fund or financial goals.

5) Question all non-essential expenses and make adjustments to your budget

Part of being a minimalist is wanting fewer things. Even if you’re not a minimalist and just looking to have a more simplified budget, you should reduce what comes into your home.

Things brought into your home, but could negatively impact your budget:

  • Subscription boxes or services
  • Streaming subscriptions (like Amazon Prime, Hulu, Netflix, etc)
  • Too much food
  • Overstocking on household goods
  • New clothing every season
  • Knick-knacks
  • Single use plastics
  • Single function items (I’m looking at you, herb scissors!)

These are just some of the things that add clutter to your home and to your budget. They’re often sneaky purchases, too! The auto-debit feature is great for subscriptions, but do you actually use it?

Question all of these purchases.

Make a List for Everything

Make a list, check it twice. Gonna find out who’s over budget or not … Just kidding. It’s almost Christmas at time of writing and I can’t get catchy holiday tunes out of my head.

In all seriousness, making a list helps you get your thoughts out of your head, onto paper, and into action.

72 Hour List

My favorite example is the 72 Hour List. Not only does it teach you delayed gratification, it also saves you a boat load of money! What’s the fabulous money-saving list? It is a list in which you write down an item (a want, not a need) you’d really like to buy, like concert tickets, a new shirt, etc. You note the date, the price, the item and then you wait three days (72 hours). At the end of those three days go back to your list and see if you still really want that item. If you have room in your budget and can afford it, go ahead and purchase it if it makes sense for you. Often you might find that you write something down and then completely forget that you want it.

Curbing impulse spending with the 72 hour list is a must-have tool when it comes to learning how to live below your means. You put a pause on that purchase to see if it is really worth the money.

The Big Expense List

How do you plan for big expenses like annual fees and dues, planned maintenance for your vehicle, back to school supplies, weddings, holidays and more? If you use a credit card (and don’t pay it off right away), I hope this tactic will work for you!

So make a list of the big expenses you know will happen this year, the month and day (if you know it), and the approximate amount. Now divide each amount by the number of months until the event and save that each month.

Example: Home Owner’s Insurance, January each year, $2000. It’s currently February meaning I have 11 months to save. $2000/11 months = $182 each month that I need to save.

Grocery List/Meal Plan

If you grocery shop without a list and only buy what you need… I’m in awe! But if you’re anything like me, you might go to the grocery store without a list and leave with bunch of food that doesn’t make sense.

Before you head out to the store, take inventory of your pantry, make a list of meals you can make mostly from the food you already have (meal planning), and then make a grocery list of the ingredients you need.

Need help meal planning? I’ve got you! Check out the Complete Guide to Minimalist Meal Planning below! When you subscribe to our email list (free) you’ll get my eBook (also for free)! Who doesn’t love a freebie??

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    Make Simple Meals

    Pinterest, where you might have found this article, is loaded with yummy looking meals… that probably have 20 ingredients. My simple brain cannot handle prepping, measuring, cooking, and serving a dish with that many ingredients. The tough truth when learning to lower your cost of living is that things might get simpler – the most obvious place is in the kitchen.

    While I would love to be a gourmet chef (JK. It would be my husband!), I just don’t have the budget for that!

    Instead we opt for simpler meals. It looks like: grains, protein, veggies, seasoning. For protein, we often choose a plant based protein like beans or choose meat that can be incorporated into the dish rather than being the star or “meat on the side”. When learning how to lower your cost of living, finding alternatives to costly cuts of meat at the store can help whittle down your grocery budget.

    Extra credit reading >>>

    Shop Secondhand

    When you’ve used things up, made do, and mended all that you can, you’ll likely need to buy a replacement. Shopping new all the time can be quite costly! Choosing to shop secondhand will help you lower your cost of living.

    We have found so many wonderful things gently used either for cheap or for free!

    My favorite secondhand finds have been:

    • Most baby gear that Little Guy used only breifly
    • Our dining table
    • Our set of three barstools
    • Kid’s books
    • My Portland Leather tote bag
    • Fiesta ware dessert plates
    • Deep cereal bowls that matched our existing set
    • About half of my own wardrobe
    • Almost all of Little Guy’s wardrobe
    • and so much more!
    Secondhand table a la Salvation Army

    Secondhand shopping has become a normal part of our lives. I would much rather find something gently used for a fraction of the price than buy something new and more expensive – even if it does take longer to find what I want!

    The key to not wasting money shopping secondhand is patience. You probably won’t find what you’re looking for right away, which will mean planning ahead a little better. Remember how making a list can help you save money and lower your cost of living? I always have a running list of things we need or might need in our current season of life. So when I go shopping, I know what I need/want and if I see a great deal, I can buy it (only if it’s in the budget 😉 ).

    Extra credit reading >>>


    So when it comes to learning how to lower your cost of living, think “consume less”. Less buying what you don’t need or want, less complicated meals, less always seeking more.

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    3 Comments

    1. This is fabulous Amanda and I was so happy to see “consume less” at the top of the list. Since embracing simpler living, I realize how much consumption in our society is out of control. So much of what I have bought in my life is unnecessary, and now I spend time decluttering. I have drastically cut my consumption over the last few years and I don’t feel even a little bit deprived.

      1. Isn’t it crazy when we let go of our stuff we only then see how much we’ve consumed? If you’re into this sort of topic, “The Day the World Stops Shopping” by JB MacKinnon is an excellent read!

        1. Thanks for the suggestion Amanda. I will put that on my 2023 reading list!

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