Smart Ways to Lower Your Cost of Living

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Living below your means is one of the most important keys to being financially stable. But it’s not always as easy as it may seem. Lifestyle plays a big role in your financial stability, as do the major decisions in your life, such as buying a house, changing jobs, or moving somewhere else. That said, “living below your means” largely depends on what kind of lifestyle you have, where you live, and what your priorities are.

So what are the changes you can make in your life to reduce your cost of living and reach a better level of financial stability? Let’s go over some of the best ones:

1. Be realistic when making major purchases

When buying a house, a car, or anything else that has a big price tag, always ask yourself, “Can I really afford this?” Don’t think about how much credit you have. Instead, think about your future self—can you really afford to make payments on that purchase for however long the loan life is? Will it keep you from covering your basic needs comfortably?

For example, if you’re planning to take out a mortgage, consider how much the mortgage payments will increase your cost of living. Will it make it harder for you to afford the things you need and want? Is it too much of a risk considering your current financial standing? If the answer to these questions is yes, then you should probably hold off on that purchase for now.

2. Find ways to reduce your food costs

Aside from housing, one of the biggest expenses of the average person is food, especially if you’re responsible for feeding other people or your pet. Thus, one of the best ways to reduce your cost of living is to lower your food costs, and you can do that by:

  • Eating out less frequently. Takeout and restaurant meals can easily blow up your food budget, especially if you eat out or have food delivered more than a few times a week.
  • Cooking more. Instead of getting takeout or dining at restaurants, cook more food at home. Even if you’re not good at cooking, there are plenty of simple recipes that you can follow to create good, hot meals without spending a fortune.
  • Shopping smarter. Look for discounts, find cheaper stores, shop in bulk—whatever you can do to downsize your grocery bill.

3. Downsize your home

Moving to a smaller home can be a drastic change, but it can help you reduce your cost of living significantly. With a bigger home, you generally spend more on maintenance, utilities, and mortgage or rent. So, if you want to make a large dent in your living costs, moving to a smaller and cheaper home may be the best way to go.

4. Stop upgrading your gadgets

If you’re the type to get the latest phone model or laptop as soon as it comes out, you are likely raising your living expenses without a significant benefit to your lifestyle. It makes sense if you’re upgrading from a really old phone that is no longer efficient or is a drop away from getting bricked. But if you keep getting unnecessary upgrades every time your favorite brand releases a new model, it may be high time to stick with what you already have to avoid incurring more costs.

5. Reel in the nights out

Unless you’re getting all your drinks for free, nights out can be costly, especially when considering the additional expenses on Ubers, after-party food, and hangover recoveries. While it’s okay to splurge on a night out every once in a while, try to limit it to one or two weekends every month. Your wallet—and your liver—will thank you for it.

6. Work from home

If there is an option for you to work from home, grab it. Not only does working from home make it easier for you to maintain a positive work-life balance, but you also get to spend less on transportation, food, gas, and every other thing that you will have to spend money on if you work on-site.

Moreover, working from home allows you to work on a side hustle, bringing in more income while reducing your monthly expenses.

When it comes to downsizing your cost of living, this list is definitely not an exhaustive one. Everyone leads a different kind of lifestyle, and it’s up to you to find the most effective ways you can slash your budget without feeling deprived. These tips can be a great place to start.

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