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How to Shave $500 Off Your Spending – Starting Now!

How to save money this month. Don't believe you can reduce your spending by $500 a month and still enjoy life? Read on to find out exactly how I did it - and you can too!Be honest: would an extra $500 a month make a difference to your life?

That’s the equivalent of landing a $6,000 pay raise.

Like most people, I think you’d have to agree it would.

After all, how much would you celebrate if you landed a pay raise of that measure?

However you don’t necessarily have to earn more in order to have an extra $500 a month; you can also spend less.

If you’re struggling to get to your next payday each month, and wishing you had just a little bit more money, here are some tips to help you shave $500 a month (or more!) off your expenses.

Let’s get started…

Give Every Expense A “Value”

One problem that many of us experience is budget “creep”. We shell out for ever more expenses each month, without them necessarily making us any happier or more fulfilled. Those expenses that don’t add your your quality of life? They’re the easy targets when it comes to cutting back your budget.

So grab a pen and paper and lets get started.

Make a list of all the money you’ve spent over the last month (or just grab a bank statement and some marker pens for color-coding) and start trying to put a value on each one. A scale of 1-5 tends to work well – with “5’s” bringing you tons of pleasure, while “1’s” are largely a waste of money.

It’s critical to be brutally honest with yourself in this step, and to carefully consider whether a slight change in spending on each item – either up or down – would have a measurable impact.

Let’s give you an example.

Imagine you spent $200 last month on buying takeway sandwiches at work.

Realistically, how much pleasure do those sandwiches bring you? Probably only a 2 or 3 at best, right?

After all, it’s just a sandwich. You’re hardly enjoying a 5 star dining experience with your loved ones, are you?

Next question: if you reduced your budget a little bit – such as taking 5 minutes in the morning to make your own sandwiches – how much of an impact would this really have on you? Probably not much. So choose the “2” and move on.

Let’s take another example.

I drive to work right now. I spend over $200 a month on fuel for my car. It’s not too exciting but without this fuel I couldn’t do my job. “Just change jobs” some people would say. The problem, however, is that there are no other employers in my field nearby where I live. I’d have to change jobs and would end up earning considerably less.

There’s consequently nothing I can do about the cost of my commuting right now – so that’s a “4” for me. Any attempt at changing this expense would have a considerable impact on my lifestyle.

Carry on through the list, considering each option, and giving it a “value score”.

Eliminate or Reduce Lower Value Spending

With your list completed, it’s time to look for those lower-value options. The 1’s and 2’s certainly; possibly the 3’s too.

If they have such a small impact on your lifestyle, consider if downgrading that expense – or eliminating altogether – is reasonable.

Here are some ideas to get you started…

Your Home – Could you move to a slightly cheaper home without it impacting your lifestyle too painfully? Could you move closer to work (lowering your commuting expenses)? Could you move to a smaller property; do you have rooms or land that you really don’t make use of?

Your Groceries – Could you shop for stores-own brands rather than well-known brands of food? Could you eat at home with your family rather than visiting restaurants?

Your Entertainment – Could you cancel that magazine subscription that you never have time to read? Do you really need that expensive cable package? Could you borrow DVDs from a friend or rely on NetFlix rather than paying over the odds for rentals or visiting the movies? Are you paying for a gym membership that you rarely use?

Your Debt – Could you refinance your debt to reduce the monthly payments? Could you go hell-to-leather to clear all your debt as soon as possible? Could you switch credit cards or bank accounts to one that costs less but has very little impact on your lifestyle?

Most people, when they really dig into how much pleasure their spending is bringing them, manage to find all sorts of ways to cut their expenses without it having a major impact on their lives.

Here are just a few of the changes I made when I went through a similar process…

  • I moved to a smaller property that was closer to work yet was also newer so needed less upkeep.
  • I used a price-comparison site to get a better deal on my utilities.
  • I cancelled a number of subscriptions for software I hadn’t used in months.
  • I found a cheaper way to host my websites.
  • I stopped buying fashionable clothes and instead survived on what I had for some years.
  • I started to pay more attention to supermarket promotions and bought what was on offer.
  • I used cashback sites to learn money on much of my spending.
  • I moved my debt into a low-interest loan, thus reducing my monthly expenses.
  • I paid off an old auto loan, freeing up over $100 a month.
  • I changed my mind about upgrading my car in the near future and instead stuck with my trusty old Ford.

…and these are just a few of the savings I was able to make, without them having any major impact on my lifestyle.

All told, in a matter of days I was able to shave over $500 of expenses off my monthly budget in an almost painless fashion.

Maintain or Even Increase High Value Spending

Those things you rated as “5”? Don’t feel too guilty about them. Keep them as they are, or even consider spending a little more on them, thanks to your newly audited spending plan.

You love fishing and go every weekend with your friends? Great! Keep that. Maybe even take a little of your savings to buy that new spool you’ve been dreaming of.

You love digital photography and couldn’t imagine downgrading your camera? No problem! Keep it. Possibly even consider buying a new lens so you enjoy your favorite pastime even more!

The Take-Home Point

The major point here is that budgeting and frugality don’t necessarily have to represent pain and discomfort. They can be used as a tool to eliminate waste and to allow you to enjoy your life even more.

To suddenly find you’ve got money left at the end of each month, or even to spend a little more on the things that really have an impact on your lifestyle.

Frugality isn’t just about spending less – it’s about spending less on the things that really don’t matter, in order to fully enjoy those factors that really do bring you pleasure.

How to save money this month. Don't believe you can reduce your spending by $500 a month and still enjoy life? Read on to find out exactly how I did it - and you can too!

Richard

Tarantula-keeper, sun-worshipper and obsessive frugality blogger. For loads more money-saving advice come and join us on Facebook.

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Hi, I'm Richard, a UK personal finance blogger on a journey to financial freedom.

I've paid off my consumer debt thanks to a frugal lifestyle and now I'm saving hard for the future.

Why not stay in touch by following me on social media?

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