8 Effective Ways to Reduce Your Household Expenses

Are you finding it quite difficult to reduce your household expenses? Okay, don’t feel depressed, this page is what you need to get motivated and take that action!

Among all lessons we have learned during this COVID-19 “pandemic period”, one good lesson we should always stick to,  is how to manage our funds and resources. Millions of people across the world became unemployed as a result of this world-renowned virus, but how do they survive? By simply cutting their expenses and wise management of their savings.

It is very important we learn how to manage our money wisely, or hence, we might end up becoming financially broke or a debtor. I know you don’t want that!

Today I’ll be showing you how to reduce your budget and lower your household expenses. These tips work for everybody, regardless of who you are, either you’re a 9-5 employee or an entrepreneur.

So, let’s check them together!

8 Ways To Reduce and Manage Your Household Expenses

Tip #1. Cut Off Your Cell Phone Plan

Having and using a cell phone is quite expensive when studied critically. No doubt they’re beneficial… but we also get charged for services, tax, etc., that we can’t even explain. This is why it’s important to choose a good cell phone plan.

According to NCC (Nigeria Communication Commission), Nigerians collectively spent about N450 Billion per month on recharge cards and data connections. That is approximately $1.17 million spent every month on cell phone plans.

You know what?

The amount of money spent on recharge cards and data connections covered about 73% of Nigerians’ expenses while the remaining 27% covered foodstuff, emergency funds, skincare, and other personal stuff.

I’m sure you’re one of those people enriching these telecommunication companies every month, I personally buy data worth N15,000 every month!

We need to learn how to reduce these expenses, and the best way we can do that is to reduce the hours we spent on social media apps (especially, Instagram and Facebook), YouTube, and online streaming sites.

Also, a prepaid plan is the most suitable option. You can get it with the major carriers at almost half the price of the regular plan. The beauty of prepaid plans are the added bonuses and incentives. Things like unlimited calls, unlimited SMSs, reduced call rates, and lots more. 

RELATED: How to Start Recharge Card Printing Business in Nigeria

If you’re looking to save some bucks, cut the regular plan and switch to a prepaid plan.

Tip #2. Do Away With Cable Subscription

One of the best ways you can reduce your household expenses is by ditching your cable plan. I know it feels good to lay on the couch after the day’s work… sipping your favorite drink… watching a good movie. I get it. But you’re on a budget and some things have to go.

Thankfully, we have digital platforms today where you can watch your favorite TV and sports shows. You can watch TV on YouTube, Netflix is a good option—it costs less per month, Showbox for Android users is great, or you could get a fire stick. 

There are lots of these services out there, using any will help in maximizing your finances in the long run.

Tip #3. Get an Insurance

We live in a world where everything is risky either on land, in water, or at home. Accidents can happen anytime, you can start developing a kind of sickness any day, your car might develop faults and different unforeseen circumstances that may suddenly require you to spend money.

Sometimes, you have to borrow money from your friends, co-operative society, or take a loan from your bank, in order to take care of those issues. 

But to help you manage your funds and reduce your expenses, Insurance plans are ready to cover that for you.

If you are a car owner, it is very important to have auto insurance. It comes in handy because you never know when uncertainties or accidents may occur. But the cost of these plans does take a toll on your finances.

If your business requires traveling a lot, you can opt-in for travel insurance, and you can do the same for health insurance.

You can always shop around for a less expensive plan. The big carriers tend to charge you higher than necessary. This may be due to you having certain covers you don’t need at the moment, or you’re probably in a wrong plan.

Take out time to review your current insurance plan, do away with covers you don’t need. Or better still, check out smaller firms with similar benefits but at a lower cost.

Tip #4. Cancel Memberships

Membership plans do get you exclusive features and other juicy benefits. This could be membership plans from your gym, Netflix, Amazon, or Audible. Whatever it is. If it’s not necessary at the moment, cancel it.

You wouldn’t miss much. There are alternatives you could check out: YouTube for Netflix, visit a local library in place of Audible, and work out at home instead of going to the gym. Remember, you’re trying to cut costs.

Tip #5. Consider Reducing Your Rent

It’s time to do away with luxurious living if you stay in a rented apartment. Take for instance you live in a 3 bedroom apartment…you could switch to a 2 bedroom or 1 bedroom to reduce household expenses.

Also, if you can, assuming this wouldn’t affect your work: try switching locations if possible. Certain areas are characterized by huge housing costs but you can change to less expensive areas if possible.

I know a guy who spent up to $2,500 (N800,000) on his new rented apartment, he had enough money in his savings to take care of feeding and other necessary stuff for the few months. But as an entrepreneur, he invested the savings on a business which went against him!

Dude is broke, and the next thing for him is to relocate to a small apartment which will cost N40,000 per year ($100/yr) instead of his previous N90,000 per year ($220/yr).

So, don’t be afraid to reduce your rent, change the location, and start looking for the bigger picture (stabilizing your business and getting your own house).

Tip #6. Cook in Your House, Stop Eating Outside!

Yes, you read right. And you’re asking if it’s possible? Of course, it is possible. We don’t tend to keep records of how much we spend on food and restaurants. I don’t do that.

And so we go ahead without knowing because we think the amount we spend per meal or snack is little. No, it’s not. When summed up, we could see how much we’ve spent and how big the amount is.

I was a regular fan of a restaurant close to my house. I spent up to N1500 on every meal. To me, I thought that’s cool and not too much to satisfy my belly. But at the end of the first 30 days, I realized that N45,000 has left my pocket on just a 1-square meal per day. And that doesn’t include the transport fare to buy the food, the tips, and money spent on food for another 2-square meal.

Averagely, I spent up to N60,000 in that month on food. 

Again, you may think it’s very small when you’re spending it, but when you calculate the total money spent at the end of the month, you’ll see how much you’ve spent.

So, I decided to start buying foodstuffs and cooking at home (I have kitchen utensils already). I spent an average of N15,000 per month on foodstuff, and like N200 per day on other things I need to buy, that is N6,000.

It means I spend N21,000 on food I prepare myself instead of the previous N60,000 on outside food (saving N39,000)!

So please… stop eating out. Start cooking at home and see how much of an impact it makes. Yes, it might be difficult but you need to stop.

Tip #7. Reduce Your Grocery Bill

Staying with our previous tip, I asked you to cook at home. But wait! What if you’ve been spending more than you should on groceries? If you’re guilty of this (maybe you’re not) here’s how you can reduce your grocery bill.

You can start patronizing stores that offer discounts. Others may have deals like “By One, Get One Free”, or you could shop online using coupons. Don’t tell me you don’t love those deals…those discounts. You do, right? So go ahead and change your grocery store or supermarket.

Buy your groceries in bulk instead of buying at a very expensive price per one or two.

Also, notice those things you don’t really use and stop buying them or maybe, reduce the quantity. 

Tip #8. Fancy Grooming… Are They Even Necessary?

Sure they are! I know we all crave those fancy stuff such as good shoes, chains, clothes, coffees with milk, cream, sugar, or whatever. But there comes a time when we need to sit back and ask: Do I really need this? Especially if you’re like me who is grinding to save some money.

Go get yourself a coffee maker and start making yours at home. If you’re not going to any occasion that demands you for new clothes, don’t buy it, if your shoe leather is getting worn-off, fix it by giving it to a professional shoemaker instead of disposing of it.

I know it’s convenient to get out there and fix your nails, make your hair, or do some makeup. Right now you need to consider doing these things yourself.

Are they difficult?

Not at all. Unless you’re too busy. If you’re not, pick up your phone and head over to YouTube to start learning these things and start saving money. 

CONCLUSION – These Tips Will Help You Manage Your Funds and Reduce Your Expenses

There you have it: 8 Ways to Reduce your household expenses. I know we love to do all these things: we love to eat out, live in luxurious homes, have some fancy coffee daily, then come home to watch our cable TV.

But right now, you need to implement these tips above. If you can’t do it all, no problem. But make sure you implement the ones you can.

So over to you, which of these things will you be cutting? Let’s hear from you.