How to Cut Your Budget When There’s Nothing Left to Cut

By Jackie Beck   Updated 10/31/2022 at 1:50 pm

Inflation is rising and wages are flat, making it hard to make ends meet. So how can you cut your budget when it feels like there’s nothing left to cut?

First, don’t despair. I know it can feel incredibly discouraging when you’re eating crackers for supper and the latte factor seems like a joke. I’ve been there, and it is possible to get through it.

There are still ways you can get back on your feet, even when it feels like there’s nothing left to cut.

Start With a Second Look at Your Budget

Cutting your budget does start with taking a second look at your current budget. I don’t just mean looking at it and seeing where you’re short either. I mean look at the budget itself.

Use this budget categories list to see if there are areas you’ve left out. It’s easy to forget about things that may actually be costing you quite a bit in the long run. (And then to feel frustrated when you can’t figure out why you’re always short.)

So take a few minutes to go through the list, with no judgement. Add anything that’s missing from your budget.

Next, Take a Close Look at Your Fixed Expenses

Your fixed expenses are the bills that stay the same each month, like your rent or mortgage, car payment, student loans, cell phone, and subscriptions.

These expenses usually don’t change from month to month, so they’re a good place to start when you’re trying to cut your budget.

See if there’s anything you can eliminate or reduce.

Brainstorm Ideas to Reduce Your Budget’s Fixed Expenses

For example, could you downsize your apartment to save on rent? Get a roommate or move in with family or friends?

Can you get a cheaper cell phone plan? Pay less for insurance? Defer your student loans or better yet, apply for forgiveness or cancellation?

Can you cancel or pause monthly subscriptions? (There answer there is almost certainly yes.)

Not buy a new car when your current one is paid off?

If you find yourself saying “Well but I can’t do that because ______”, stop for a minute. What if it was the only way to save the life of someone you love? Could you do it then? If so, doing it now might be the answer, even if you don’t want to.

Doing hard things now often makes life easier in the long run.

Evaluate Your Variable Expenses When Looking to Cut Your Budget

Variable expenses are the costs that change from month to month. Groceries, gas, heating & cooling, and entertainment are all examples of variable expenses.

These expenses can be more difficult to cut because they often feel necessary. But with some creativity, there are ways you can reduce your variable expenses without making too many sacrifices.

For example, could you cook more meals at home instead of eating out? Carpool or take public transportation instead of driving everywhere, or at least combine trips? Can you caulk your windows & doors or use a window insulator kit?

Often you can save money on things by making slight changes. It helps to ask for ideas from others too. (For example, by saying “Hey, what’s a good way to save money on x?” or “What are you paying for x?”)

If you need suggestions on many areas to spend less, here’s a whole slew of money saving tips.

Identify Luxuries and Cut Your Budget There

You may think there aren’t any luxuries in your budget — no lattes to skip for you! — but it’s also possible that there are some hidden things you could save on.

(While we’re at it, I’m by no means suggesting you cut ALL luxuries from your budget, unless you have no other choice. Everyone needs something enjoyable to look forward to. It may just be something that’s free.)

But I am suggesting you identify the actual luxuries in your budget. Then take a closer look at whether or not you want to keep paying as much for them, or paying for them at all.

Here are some common hidden luxuries:

  • organized sports
  • someone to mow the lawn
  • paid after-school activities for older kids
  • buying lunch on workdays
  • gym memberships
  • having a house cleaner
  • subscriptions
  • etc

But What if You’ve REALLY Cut Your Budget Everywhere You Possibly Can?

If you’ve truly cut your budget everywhere you possibly can, take a minute to see what that really means. Do either of these examples describe your situation?

Example One

Have you cut back on all kinds of things, but are paying for a few things that are using up big chunks of your income? Usually those big items are housing and cars.

I was in that situation when I was just starting out. My (now ex) and I had a reasonable rent, but car payments for two brand new cars. We didn’t have a lot of expenses, so there weren’t a lot of items to cut back on, but the expenses we did have were huge! (Car payments and insurance were #1.)

We could definitely have sold a car and managed with just one, despite working different schedules in far-away locations in a city with poor public transit. But it didn’t occur to me.

And if it had, I would have said “well but we can’t do that because _____.”

Even though when one of our cars got totaled and we couldn’t afford to replace it, it turned out that we could and did do that.

You don’t know what you really can’t do until you have to.

Example Two

Or are all of your expenses truly very low overall compared to many people, but you’re still short of money?

I was in this situation too at one point. My expenses were both very low and very few in number. I had a shared house payment, no car payment, cheap insurance, used almost no gas, bought a small amount of generic groceries, and my student loan was in forbearance.

Example two really cried out for “make more money” as a solution. And eventually, I did. I should also have applied for benefits that could have helped, and will if I’m ever in that situation again.

So Sometimes You Need to Attack Things from The Other Angle

In both of examples above, making more money can be a huge help. (So long as you don’t also increase your spending!)

Example two is where it can make the biggest difference the quickest, but it will help in any case.

So sometimes you need to attack things from the other angle as well and do everything you can to earn more.

That means you could get a job if you don’t have one already, ask for a raise in your current job, get a better job or a second job, or start a side hustle.

If you can’t work due to disability, contact local agencies to make sure you’re getting every benefit you can.

If You’re Struggling Due to Debt

Debt payments can really add up. On the other hand, as you get out of debt, you’ll have more and more room in your budget.

So the first step there is to draw a line in the sand and commit to only spending money you already have going forward. No new debt, in other words!

After that, using the debt snowball method is a great way to pay off debt after debt.

And if you have to choose between paying debt and eating or having somewhere to live, my vote is to eat and have somewhere to live. You are not a bad person if you can’t afford to pay your debts.

Summing Up

These are just a few ideas for how to cut your budget when there’s nothing left to cut. Of course, every situation is different, so try one or more of these ideas and see if they help ease the strain on your budget.

How to cut your budget when there's nothing left to cut

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