The expenses of life can add up quickly. If you’ve ever thought to yourself, ‘how can I lower my bills’, then you aren’t alone. When you are able to lower your bills, you can free up funds to work towards other financial goals. Whether you want to save every penny for a long-term goal of early retirement or enjoy a lavish vacation, everyone can benefit from lowering their bills. Let’s take a closer look at how you can lower your bills!

How to reduce expenses

As you start to look for ways to reduce your expenses, it is a good idea to start with the ‘Big 5.’ The five biggest expenses in your budget have the most room for slimming down. We will share tips on how you can slash these big expenses to enjoy big savings. 


The average American spends approximately 30% of their household income on housing expenses. It is easy to see how that expense can quickly take a large bite out of your total budget. Luckily, there are ways to dramatically reduce your housing costs. 

Although downsizing your living space is an option, house hacking is the most effective way to reduce your housing expenses. In fact, house hacking provides an opportunity to completely eliminate your housing costs from your budget!

So, what is house hacking? Essentially, it is a way for you to rent out extra space in your home to cover the mortgage. There are many different ways for you to make house hacking a reality in your life. You could try room rentals or a multifamily unit approach. Whatever option you choose, the goal is the same – lower your bills by cutting back on your housing expenses. 

If you are interested in house hacking, then check out our ultimate guide on house hacking to learn more!


The amount of money you spend on food might surprise you. Although food is absolutely essential to living, there are ways to reduce your overall food budget

If you want to lower your food costs, then meal planning can be a tremendous help. It is likely that a large portion of your food budget is spent on restaurant food. The costs of dining out can add up quickly, but when you don’t have a meal plan in mind the thought of premade food can be too tempting to pass up. With that, a meal plan can help you curb the worst of your impulse takeout. 

As you map out your meal plan, try out the 2 dollar rule. With that, you would try to stick to spending 2 dollars per person per meal. You might have to get creative or try out a new store to make this a reality. But once you get the hang of the 2 dollar rule, you will find that you are spending much less on food each month. 


The costs of transportation can add up quickly. These expenses are very easy to justify because you likely need to pay for a form of transportation to get to work. But there are ways to cut back on transportation costs

A few of your options include biking to work or simply moving close enough to walk. Beyond that, you could attempt to set up an office carpool or use public transportation to get to work. If you can’t use any of the options above, then consider purchasing used cars only. A used car will give you more value for your dollar, but you may have to sacrifice the idea of having the best car on the market. 


Taxes can add up quickly for the average American. In fact, the average American household spent $10,489 in taxes in 2018. Although you can’t eliminate taxes from your budget, there are ways to optimize this expense. 

The best step you can take to optimize your tax expense is to max out all of your pre-tax retirement accounts. This is the best way to lower your taxable income. With a lower taxable income, you’ll be responsible for fewer taxes. 


Healthcare is likely another big expense in your budget. It can take a lot of creativity to reduce your healthcare expenses, but it is possible. The most effective way to lower your long-term healthcare spending is to take care of yourself through preventative care. A little bit of preventative maintenance can go a long way. Talk to your doctor about ways to be proactive about your health. 

Beyond preventative care, you can shop around for a more affordable health insurance plan. With some research, you can uncover more affordable options that will suit your needs and your budget. 

How to reduce household expenses

Taking the time to reduce your five biggest expenses will have a big impact on your budget. But it is possible to cut back even further with changes to your lifestyle spending. 

If you are like most, then you’ll likely find easy cuts to make within your discretionary spending. That might include reducing your streaming services or cutting back on your online shopping habits. 

As you make these changes, consider ways to keep the same level of enjoyment without the expense. For example, you could try to create ‘frugal’ date nights or take advantage of travel rewards credit cards to fund your travel without spending a dime. 

How to reduce monthly expenses

If you find that your monthly bills are still too high, then try out a service like Trim. The company will work to negotiate a lower rate for you. Although you’ll have to pay Trim with some of these savings, it might be worth it if you are struggling to negotiate with your bill providers. 

The bottom line

The good news is that it is possible to lower your monthly bills. 

As you start this journey to optimize your budget, try to start small. Although it can be tempting to rush into many spending cuts, adding new cuts over time is a more sustainable strategy. With each new spending cut, give it a week or two to settle into your life. Otherwise, you run the risk of burning out on these budget cuts. 

Lowering your expenses is a great start to building your personal finance foundation. Check out our ultimate guide to uncover what your next steps should be!