Get Big Wins from Saving on These Three Expenses


What if I told you that you didn’t have to skip that cup of coffee in the morning and that you could keep your happy hours — all while paying down your student loans and saving money?

Sounds too good to be true, right?

Well, it’s not.

Typical personal finance advice is to cut back — even on small pleasures — in order to save and pay off debt.

While I agree with this sentiment to an extent, I also believe that debt shouldn’t be a prison sentence of eating top ramen and having no social life.

Also, from a mathematical standpoint, there are other areas you can save money on that have a much larger impact on your financial life.

If you want to gain big wins from saving, you’’ll need to focus on housing, transportation, and food. Think of these three expenses as the golden triad of savings.

Be Smart About Housing

If you live in a big city, you already know that housing eats up a huge chunk of your budget. When I lived in Brooklyn, my rent was 50 percent of my income — for a closet. Spending half my income on a place to live was tough and far exceeded the recommended 30 percent budget allocation for rent.

But what are you to do, if you want to save money on housing costs? Here are some options:

  • Move to a different neighborhood. When I lived in L.A., rents decreased a few hundred dollars just within a few blocks. Do some comparison shopping among various neighborhoods.
  • Get roommates. If you currently live by yourself, this can help alleviate some of the costs.
  • Move to a different city or region with a cheaper cost of living. Obviously, this option isn’t right for everyone, but if you’re looking to cut costs on housing and aren’t married to the idea of living in a big city, many other areas in the country boast a low cost of living.
  • Rent what you can afford. I know this sounds obvious, but it’s easy to get swept up in having our dream apartment and go just a little over our intended budget. All of sudden you’re spending $200 more per month for that walk-in closet. Let your budget guide your apartment search, not the other way around.

Housing is often the biggest expense in your budget. By being firm with your budget, realistic in your expectations, and open-minded and flexible with where you live, you can lower costs.

Use Alternative Transportation Methods

Many people think that having a car is a must — and in some cases, it might be.

But having a car can add up fast. Think about how much you spend on a car payment, oil changes, car insurance, standard repairs, and unexpected repairs. Car ownership can cost hundreds of dollars each month.

I’ve been carless for five years and I’ve saved thousands of dollars by not having a car. And with the various services out there to help you get around, I hardly miss having one, nor do I find it inconvenient to get around. If you want to save money on transportation, consider ditching the car in favor of:

  • Biking
  • Taking the bus
  • Walking
  • Using Car2Go
  • Using Uber or Lyft
  • A hybrid method of all of the above

If you really can’t live without a car, then consider buying used. Buying a new car isn’t the best return on investment as the value of a car depreciates as soon as you leave the lot. By buying used, keeping your car in good shape, and maintaining a good driving record, you can save money on your transportation costs.

In addition, try out these tactics to help cut costs:

  • Use GasBuddy to help you find affordable gas in your area.
  • Shop around for the best car insurance rates — don’t just settle on one price, but do your research to find the best deal.
  • Consider carpooling a few times a week with a coworker.
  • Learn how to change your own oil.

Something else to consider is that where you live also affects your car insurance rates. Car insurance rates vary widely across the country and are dependent on a number of factors, including: crime rates, traffic, population density, weather, and even local laws.

Similarly, consider what sneaky fees might come up from having a car where you live. When I lived in L.A., it seemed like I got a parking ticket every few months because of street sweeping. If I went downtown, I had to pay to park. That was another several hundred dollars a year wasted.

You want to really think of all those little costs that come with having a car that might not be so obvious, and be really mindful of how you can prevent getting caught up in unnecessary fees.

Plan Ahead with Food

According to the USDA, the average cost of food for a couple under 50 with a moderate-cost plan is $623.10 per month.

That number goes down to $390.10 for a thrifty plan, and jumps up to $779 per month with a liberal plan. That is quite a range for food spending — and likely a big chunk of your budget.

Food can be a tricky expense to cut back on for a number of reasons. First of all, you have to eat, which can make it easy to justify going out to eat after a long or busy day. Secondly, we all have personal preferences, diets, etc. which can make cutting back on expenses either easier or harder.

But there are still ways you can save money on food, regardless of your diet:

  • Buy in bulk
  • Cut back on meat and dairy (I didn’t say give it up entirely! I could never give up my ice cream)
  • Skip prepackaged foods
  • Plan your menu based on sale items
  • Batch cook, so you have meals ready for the week
  • Get cash back on certain purchases by using Ibotta
  • Limit restaurant outings
  • If going out to eat or drink, go during happy hour

Cutting back on food costs can be a process as it requires you to change your habits, but with some discipline, determination, and creativity, it can be done. If you really want to fall down the rabbit hole and get some great ideas, simply search “cheap meals” on Pinterest.

Put It Into Action

Next time you are feeling guilty about spending $2 on that coffee, let go of the guilt and change your frame of mind. Housing, transportation, and food make up the largest portion of your budget and offer the most leverage to put money back in the bank.

Instead, think about the big wins you can get from saving on these three areas and take action.

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