Four Radical Ways to Cut Your Cost of Living

By - August 2, 2014

Cut your cost of living and you'll have greater financial security and less stress. But don't stop with coupons and sale-shopping (in fact, don't even start there). Yes, there are many little ways to spend less, but to cut your expenses dramatically you need to take more radical measures. Here are four to consider.

TINY HOUSE(Flickr photo by Nicolás Boullosa)

1. Move to Cheaper Housing

The average rent in New York City is now over $3,000 per month, and is close to $1,100 for the U.S. as a whole. But if you can move, you have options. For example, go to and sort Tucson apartment rentals by price (lowest first). You'll find pages full of studio and one-bedroom places for under $350. By the time you get to $600 per month you're looking at two-bedroom apartments in nice complexes with beautiful swimming pools and other amenities.

Not a fan of dry heat? Peruse a list of cities with the cheapest rent and find your new hometown.

What if you can't leave town? There are at least ten ways to reduce your rent.

If you own a home, consider downsizing, But it isn't the square footage that matters. You can even go bigger perhaps, as long as you sell your home and buy one that costs less per month for total expenses. You migth even want to consider alternative housing that will really cut your costs.

Paying $250 less each month for housing saves you $3,000 per year. Knock $500 off that monthly cost and you have $6,000 to play with. What could you do with that?

2. Get Rid of Car Payments

CNBC reports that the average new car loan is over $27,000 now. Even payments on used car loans average about $500 if you don't have good credit. Ouch!

If you have a car payment, consider selling the car and buying something cheap for cash. If you plan to buy a car in the next couple years and can afford a car payment, you can afford to put that much money aside each month until you can pay cash.

Borrowing for a car purchase adds more than interest charges to the cost. You also pay more for the car to start with. To prove this, ask any dealer for the best cash price for a car, and then ask what they'll sell it for if it's financed through them. Also, with a debt-free vehicle you can drop the collision coverage (or lower it) when your car gets older. If you have it financed this won't be allowed.

Maybe a new car every four years is your life ambition. But if you have other important goals, like having less stress, more travel money, an early retirement, getting rid of a $400 or $500 monthly payment can help with those.

3. Spend Nothing for a Week

Spending nothing for a week will save money, but this exercise is more about teaching yourself what's important, so you can make more permanent adjustments to your budget. Of course you'll have to buy a few things and pay a few bills, but to the extent possible avoid all purchases for a week or longer.

Eat the food you have, bring coffee with you from home instead of stopping at a coffee shop. Drink tea when the coffee runs out. Watch something online or on TV instead of going to the movies. When possible walk or bicycle instead of using the car.

After a week you'll be missing some things quite a bit, and others... well, not so much. You'll have a better grasp of what can be eliminated or replaced with cheaper options. This should enable you to more wisely cut expenses without suffering.

4. Do What Costs Less

Looking for sales or better deals is fine, but a more radical way to cut your cost of living is to buy only what serves a given purpose at the lowest cost.

For example, you need fruits and vegetables for health, but there are several kinds that you like, right? So why not buy the ones which are cheapest? This month you might eat more apples, next month more oranges, depending on the seasons and sales, but your overall expense for healthy food will be much lower.

This isn't about sacrifice, but about finding better substitutes. For example, you need to spend time with friends, but a round of golf averages between $50 and $100 when accounting for all costs. If it's really important that's one thing, but who knows? You might have more fun meeting everyone at a local swimming hole or putting the TV in the back yard for a Sunday football barbecue.

Habits can be expensive. A habitual $10 lunch every weekday costs $2,500 per year. Maybe lunch in the park with a sandwich and coffee brought from home would be just as satisfying (or more). That change alone could save you $2,000 annually.

Perhaps some things can't be replaced with cheaper options, but it can't hurt to experiment. If you find cheaper housing, get rid of car payments forever, and learn what's important so you can replace habitual expenditures with better alternatives, you get to work less, relax more, or bank thousands of dollars annually to use for whatever goals inspire you.

If you liked this page please let others know with one of these...

Other Relevant Pages

Money Articles

The Best Money Books and Courses

Interviews with People Making Money

(The newsletter has been discontinued.)

Every Way to Make Money | Cut Your Cost of Living