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Trimming the big expenses

By Paula Pant ·
Tuesday, February 18, 2014
Posted: 10 am ET

Are you trying to save money? If so, it may be a frustrating exercise.

Regardless of how many coupons you use at the grocery store, you may feel like you're not making significant progress.

Many people try to trim expenses by focusing on small costs. They'll skip the $2 fountain Coke when they buy lunch at McDonald's. They'll trim their own hair rather than getting a $12 cut at the barbershop.

These are great moves. Small items definitely add up. But if you want to make a fast, substantial impact on your savings rate, focus on the biggest-ticket items.

Such expenses gobble up most of your take-home pay. Slashing those costs is the best way to significantly "move the needle" away from debt and toward savings.

Housing, transportation and food represented $32,484 in total annual expenses for the average U.S. household, according to 2012 data from the U.S. Bureau of Labor Statistics, the most recently available.

How can you trim your costs in these top three categories?


The average American household spent $16,887 on housing in 2012, according to the labor bureau, or BLS. This represented the largest expense for most families.

If you rent and are nearing the end of your lease, look for a low-cost apartment. That doesn't necessarily mean moving farther away from your job, because then your transportation costs increase. Instead, look for a smaller apartment or one with fewer amenities.

For example, skip apartments that charge higher rents to help pay for on-site swimming pools or gym facilities. Then, use the money you save through a lower rental payment to build retirement savings.

If you own a home, try to refinance your home at today's lower interest rates. In addition, make extra payments toward your mortgage to pay down the balance faster. Opt for a home insurance plan with a higher deductible, which will give you lower premiums. And consider renting out a spare bedroom for extra cash.


Transportation represented the second-largest expense, at $8,998 for the average U.S. household, BLS says.

If possible, live close to your workplace so you can minimize the length of your commute. This will help you save on gasoline, oil changes, and wear and tear on your car.

Also, try to live in a pedestrian-friendly area where you can walk to the nearest parks, playgrounds and grocery stores. That will cut your need to hop in the car for errands.


Food registered as the third-largest household expense, at $6,599, according to the BLS.

If you have a yard, grow some of your own vegetables, such as bell peppers, tomatoes and broccoli. If you live in an apartment without a yard, grow herbs on your windowsill, such as basil, mint or oregano.

Try to avoid packaged or processed foods, which are less healthy and more expensive than making meals from scratch.

Also, reduce your intake of soda. Instead, drink tap water to quench your thirst. It's cheaper and better for you.

Paula Pant helps people ditch the cubicle, maximize their money and live on their own terms. She's traveled to 30 countries, owns six rental units, and proudly hasn't held a "day job" since 2008. Her blog, Afford Anything, is the gathering point for a tribe that refuses to say, "I can't afford it." Follow Paula on Twitter: @AffordAnything.


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linda harrison
February 24, 2014 at 5:19 pm

shop the ads on Sunday, i.e. target, walgreens, rite aide. these places have milk and eggs for a lot less as well as cereal, cokes etc. you have to buy in larger quants but if you continue to do this you will average out less on your monthly food bills. Getting rid of DVD boxes on cable can save you $7-$8 per box. How many do you need. Do your windows leak in the winter when it is coldest and windy. $5 roll of white duct tape will cure that rather than $700 per new windows. Forget the mani and pedi, You can do it yourself. Watch the inflation in tires, and switch back and forth between hightest and reg gas. Extend the dog grooming from 2 to 3 months, as well. alter your old clothing and make it more stylish by a closer fit. Remove shoulder pads and take in sleeves and shoulders on clothing. You still want to look good, just avoid the stores.

February 24, 2014 at 4:19 pm

this has to be the stupidest article ever. Unless you live in a very urban area, you are going to have a commute to work. But to cut costs of living, you have to move to a rural area and out of the big city.

To cut food expenses, grow a garden? First, this means a rural area, which means a longer commute, which increases transportation. But do you realize the size of a garden you would need to support a family?

So basically: if you own a house, there is no real way to cut expenses because you can't cut your payment by moving to lower cost apartment, nor can you move to cut your transportation.

How about this: if you want to make an immediate impact on your budget: STOP with the non-essential items such as smart phones, cable television, etc. Go to a normal phone and cut cable and immediately save $400 a month right there.

February 24, 2014 at 2:29 pm

shop at the dollar store, shop on line, walk instead of drive when possible, very local errands. buy a water filter pitcher, make laundry detergent from products like baking soda & washing soda - to have soap for clothes for about a year @ .10 cents a load. quit all habits that are bad - unhealthy & cost money, eg: smoking...buying gossip magazines.. shop auto insurance rates, i saved a 100.00$ a year.....use a library for books & movies. spring clean all of what you don't use & get rid of it ... i made 1,000.00 $ on clothes, & at habitat for humanity for nick nacks, small thrift shops have music & books for .50 to 1.00.. if you are in an apartment complex...try to plant herbs, spices, small vegetables - along your foundation, where pets & kids wont disturb

Tawes Dewyngaert
February 24, 2014 at 11:13 am

Shop around, compare, raise deductibles, whatever it takes to get insurance costs under control...renters insurance is usually reasonable but huge savings on homeowners, auto, life, health are possible if you comparison shop.
Pay off highest interest debts first...then just use credit cards for convenience(payoff every month) or emergencies.

Dan McPhail
February 24, 2014 at 10:51 am

the famous entertainer Willie Nelson said watch the pennies and the dollars take care of themselves. I'm a 66 year young entertainer from southeast Michigan whose made ever money mistake you can make. The biggest: not tracking small unecessary expenses. Example: i have a bottled diet soda and 2 newspapers a day (having been a radio newsman i'm a news junkie). But my wife wisely said one day "Dan, the $4 daily for that pop and papers is about $1600 a year. If you dropped 4 single dollar bills in a piggy bank all year that $1600 buys a decent week's vacation, the repairs most cars need to keep from buying a new one; the down payment on a decent newer car, or lots of other things. So i'm switching to home bottled ice water and watching free CNN. Good money management is economizing on things that don't matter much so you can buy what you really like. That and the article doesn't mention the number one financial planner rule: save 10% of your net pay whether you make ten grand or ten million a year and don't touch it. If you make just the national median/mean pay of $700 weekly or $35-$38 grand a year and "pay yourself first" with 10% of your net that's $3500 yearly. Then you don't have to borrow at high interest for things like emergency home, auto repair or helping a relative in trouble, medical bill, etc. I know, all these things are easier said than done. But if you don't follow them you'll always be broke and/or in debt.

hans w. may
February 24, 2014 at 10:31 am

.....thank's for the info's...but...please avoid tap water, it's full of chemicals....and aluminum...[alzheimers]just get an analysis from the city....


February 24, 2014 at 10:01 am

Yawn...almost no useable content here.

I rent by choice. ANY decent apartment in my area has amenities...those without pools/gyms are really either mediocre-bad areas, or primarily low-income residents. I don't say that as a "snob", but while I do rent, I want to live in decent surroundings.

Rent a small, cheap place and what is the result?

You go out more to compensate! Yes, it is an up front expense, but by living in a desirable rental/neighborhood, I feel more satisfied at home and spend less money going out.

Grow your own herbs/produce? Were I a home owner with property, yes, although growing your own is not that small an expense when you take in all the factors including your TIME.

Transportation is a factor for sure, but unless you live in a fairly "down-town" area, a minimum of folks actually live within a reasonable walking distance to stores/restaurants, etc., and the fact is that most grocery stores, shops, etc. within walking distance to residential living tend to be higher priced anyway.

February 24, 2014 at 8:37 am

Yes, very reasonable but not probably many times. Housing in where I reside does not offer the luxury to rent apts in a decent area at a reasonable rent. Also Cable, Dish etc. is really taking advantage of the publick and no matter what company you subscribe, if you want decent progrmas you have to pay through your nose! Cable companies are giving us a bad service and it is "take it of leave it" and all of them have the same norms etc. On top of that, salaries etc can not keep up the high cost of living. Our country is going from bad to worst. The goverment is allowing all these companies and others to outsource their customer service and production to India, Pakistan, Phillipines etc. Why? There is a lot of people unemployed that can be hire by these companies and train them and cut down the unemployment of so many in the USA. Sorry but I do not see any solution to the problem we are having in the USA today. There is no leadership and no one wants to rock the boat.

February 24, 2014 at 7:41 am

We need Council Housing like the have in the U.K. Everyone pays one-third of their income and you never have to worry about being homeless if you lose your job or get sick.

February 24, 2014 at 6:38 am

hum, not a very "real" article. The first areas listed are for those who already have reasonable cash flow, you can't move or make those choice without it. Many aren't in this situation. Food costs are easy to control...stratch/whole foods shopping, skip the "bulk" purchases, buy what you need, make a list and only buy what's on it. The most expensive food is what you don't use or throw out, reduce eating out. After that scale down all purchases, we really don't need "stuff" nor the high end stuff. Turn down thermostats, find inexpensive entertainment. And on the taxes issue, yes we pay and maybe don't get all we want - choose carefully who you vote for! Right now the leadership is about spending our money.