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How to lower your expenses month by month

Updated on September 2, 2012

Money matters!

Welcome dear readers to another helpful article from your friend Tanja!

I would like to help you saving money. Now I am going to show you step by step how to do it. I hope you will enjoy it.

Part 1: Find out how much you are using

Many people do not understand that the simplest method to save money is to just lower the expenses. Here is how:

In order to find out how to save money, you must first analyze how much you are using right now and for what:

Write down what you use every day. This will take some discipline, I know that. So you gotta make it as easy as possible for you to write it down. If you are using your laptop/computer every day, then it is good to have an excel sheet ready and always open when you open your laptop. If you feel more comfortabe with a real paper version, then print the excel sheet out or use a small booklet. That way you can write down immediately the amount of money you are using.

Act normally, as if you were not writing it down and spend the money you would usually use. Remember, we want to find out how much you are actually using. Cheating now, will be contra productive.

Attention: do this EVERY DAY, or better: even several times a day. Try to write it down immediately, otherwise you will forget it. Do not procrastinate this one, because - and this is really for helping you - you will forget what you used 3 days ago. You will, trust me on that one. For example.. you will forget that you paid a small amount for a coffee at the library cafeteria which you did not get a reciept for. Now you might think: so what, that small amount.... but that will happen every day and if you froget it, falisfy your results.

Why is that important?

Because you want to know how much you are using and for what you are using it. That way, you can find out, WHERE you can save.

I will help you here and tell you how i divided my expenditures. I divided them into these categories roughly. It depends on your lifestyle of course too, you can clearly see that I am a student here


Rent, Water, Heating, etc








Transportation / Car

You do not need to use the same categories, but do classify them. This will help you alot.

Please do this process for a period of about 3 months. Yes, it is necessary! Do you already feel like giving up now? No, give it a try. Maybe 2 months will be enough for you already to figure out where your money goes each month. Why does it have to be for so long? Because you will have different expenses each month. Some bills come once a month, some every 3 months. In one month you will spend more on one category, in the next month less. Etc..

Part 2: Now that you know what you are using: where can you go lower?

Great, you survived the hard part. Congratulations on those of you who haven´t given up yet. Please write down the monthly amounts in each category and compare them. (Therefore it is easier with Excel, the calculation part is simple). Now think where you are spending the most and if you really need all that you have? We can lower these expenses by lowering your "allowance" in each category.

For example, if i spend 500EUR a month for food, there is probably a way to cut back and start a savings here.

The easy way: Make a budget plan for the next month.

Make the plan with all your planned expenses in each category. You will do as follows:

If you spend 500 so far for food, give yourself a 300 allowance for the next month. Do this in all categories you can. Not in all, but say 2-3 of them. Just keep writing down what you use the next month and go through it again at the end of the month.

Make the budget plan realistically. If you have been using 1000EUR a month for clothes so far, you wont be able to cut down to 200EUR immediately - most likely. Start with an easy task, lets say 600 for the next month, and see if you can achieve it. So you plan the expenses of the next month like that, "allowing" you a little less in each category. Ok, in some categories it will be nearly impossible to go lower, like "rent or insurances". Exclude them here. In most others though it will be possible: entertainment, leisure, sports, car, cosmetics, food...

Part 3: Make it happen!

You are still here? Great, im very proud of you, you are on the good track. Lowering your expenses takes time to adjust. It is a process you yourself go through. Like a new habit you need to impose. Therefore it is important that you stay patient. There is no GET RICH QUICK scheme. That is only a scam (in case you didnt know that one already). Even if you win the lottery - you will still have to pay income tax on that - and moreover it is most likely NOT going to happen.

Instead: transfer your thoughts to what is going to happen for sure:

If you save 200EUR* a month for the next 20 years, that will make a nice sum for your birthday, won´t it? It will make a nice 48000EUR in 20 years. Woooow! Think of what you are going to by for that!!!???!!

Make a budget for the next month, and keep writing down the expenses and "allow" yourself an amount in each category that is lower the amount you used in the previous months. Then go lower in the following month and even lower in the next month. It will be easy in the beginning, and get harder and harder the longer you go. Remember, only you limit the amount!

This one will take time, i admit it. But remember the rich-quich-scheme... not true... better start acting now, than keep holding on to a fantasy!

I would say it is feasible, depends on what you really want. Do you really need to eat out every day? Do you really need that flat screen or new car? It does not mean that you must stop living, no no! The most important is that you remain persistant and patient! And the best part of this is method: it is very simple and it will simply work "on its own".

Trust the woman who travelled europe on 5 EUR a day :) Read about the hitchhiking adventures I had here if you wish

Was that helpful? Please leave a comment or write me directly. I can give you more tips!


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    • Bill Armstrong profile image

      Bill Armstrong 

      6 years ago from Valencia, California

      I love reading this stuff and am on a sort of budget cut myself, have managed to stay out of restaurants for a while, just got to master the coffee, and have stopped splurging on gadgets, it's great to read some of your adventures and look forward to more, thanks for sharing

    • Tanja Wanderlust profile imageAUTHOR

      Tanja Wanderlust 

      8 years ago from planet earth

      Thanks Xav for your informative comment. I very much agree with you and the technique. Of course i applied yours too. You have to once you go into the detail of "my" technique. If you for example only want to spend 200 EUR on food a month, you need to devide it into 50 a week and so use it respecively as you go to the shop only once or twice a week.

      Was the same for me with the cola! And I have been free of sodas for 4 months now. I only get one every once in a while and then its apprechiated. I dont even purchase drinks at bars anymore or only very very rarely. I dont need it to have fun!

      We in modern western world have lost the apprechiacion for these things, because we have it right infront of our noses ALL THE TIME. Cola, chocolate, ice cream .. whatever it might be. Because its there all the time, at any imaginable place, everywhere! We have become slaves, always being distracted and seduced to consume.

    • profile image


      8 years ago

      Hi Tanja and readers,

      It is actually a really interesting and I'm sure effective way of saving money.

      I'd like to input my own experience on saving money here. I sometimes applied Tanja's advices cited above, but I've always been a bit distracted and it's hard for me to follow so strict a process. So my own way of saving money involved more of a day to day saving practice. Here's how I came to it:

      I started by thinking hard when buying new big and casual stuff. Do I really need it? How long will I use it? What will be then the price paid per day of usage? Is it then more expensive to rent a car when I need it and take public transportation, or to buy a car? Do I really need the expensive make or the simpler one? etc.

      Most of the time I would find out it was just a whim that would vanish the next day/month. Sometimes I would find out the total price would exceed the price of an alternative way.

      I continued thinking hard and asking myself questions on every purchase, first with expensive and casual things.

      Then when I suppressed the fancies and realised I was actually starting saving money, I went along with cheaper stuff, a new roller blades pair or clothes, or shoes... Did I really need them, could I do without, etc.

      At the end I finished with small everyday life things, usually drinking and eating. Do I need to drink this coca cola or this orange juice or do I need this expensive meal or this restaurant every week? On this matter, I figured out that if all you really need is just basic food and water, that's also enjoyable to have some fancy drinks or foods at times. The problem with today way of life and food easy access is that it became quite cheap and hence we started to have those things daily and on a regular basis. Drinking a coke everyday becomes like a need.

      Hence I started asking myself: Do I really need this coke? Everyday I would ask myself. Little by little, I would stop drinking cokes and drink water instead. I would stop stoping here and there and have a coffee... Stop buying bottle of water when available tap water is free and good.

      I would save a lot of money too, because the little amount you save everyday becomes a huge amount every month. 1 coffee a day saves 40€ a month. One orange juice a day saves 50€ a month, etc.

      Of course, sometimes I would allow myself this coke: and I discovered something amazing: a coca-cola is actually soooo good! I had forgotten that, by drinking it on a regular basis. Its taste was just as drinking water, an habit taste. Now, one or two cokes a month is a real overwhelming pleasure, trust me! It goes the same for every other thing, like fancy a restaurant once a month, just on the impulse, instead of too regularly: it makes you appreciate it infinitely more!

      At the end, I saved money by thinking of every purchase I would make from the 20 cents sweet to the 100€ new trousers. Did I really need, hence did I really want this? Or was that just a sudden irrelevant fancy? Or was that just a whim which came out of an habit?

      And the good thing is that, with practice, you stop asking questions and thinking everytime, you become aware that you don't need things, the purchase habit becomes a non-purchase habit. With time and practice, you save money without even realizing it!

      That's another way of doing it. I think both Tanja's write down method and my do-I-really-need-it method are equally good, but apply to different kind of people. Find the one you prefer, as at the end, you want to save money. And as Tanja's said it, the easiest way is by not spending!

    • Tanja Wanderlust profile imageAUTHOR

      Tanja Wanderlust 

      8 years ago from planet earth

      Thanks persoycacious for your comment. Well thank you!

    • Perspycacious profile image

      Demas W Jasper 

      9 years ago from Today's America and The World Beyond

      Any savings starts with a sensible budget. You have pared it down nicely. Voted up and useful. (By the way, how are you yourself doing?)


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