Essential expenses include things such as mortgage/rent, heating, power, water, transportation, insurance, etc.

Essential expenses are probably the bulk of your outgoing cash each month, likely making up 70-80% of your total expenses.

Focusing on reducing this portion of your expenses will typically yield you a bigger bang for your buck, unlike smaller expenses like the grocery budget (which you can reduce, but only so much).

Here are 23 Ways to Lower Your Essential Expenses Today
  • Rent/Mortgage
    1. House Hack – Multi-Unit: Buy a multi-unit property like a duplex, live in one half and rent out the other half.
    2. House Hack- Rooms: Buy a multi-bedroom house and rent out the bedrooms
    3. Rent-Hack- Sub lease rooms in your rental, i.e. have roommates
  • Electric Bill
    1. Be mindful of your consumption- turn off devices and lights when you are not using.
    2. Get low energy light bulbs
    3. Make sure your fridge is full. If you fill your fridge with bottle water, it will stay cooler for longer than an empty fridge without having to run the compressor.
  • Gas Bill
    • If you have a gas fired oven and stove- be efficient at cooking and cook in bulk if you are able to. The less often you use it, the less gas you’ll use.
    • Heating- lower the set point on your thermostat. Wear layers and use blankets. I also use heating pads and heated blankets.
  • Water Bill
    • Again, be mindful of your consumption. Turn of the water when your brushing your teeth.
    • Check for leaky faucets
    • Turn off all your faucets and look at your water meter. If the dial is turning, you have a leak somewhere.
  • Transportation
    • Carpool to work.
    • Don’t buy new, buy used. new cars lose 20-35% of their value in the first year.
    • Don’t lease vehicles. Leasing is by far the most expensive way to own a vehicle.
    • Bike or walk to work if you live a reasonable distance.
    • Routinely get quotes for car insurance.
    • Plan all your errands for one day. Don’t make multiple trips, be efficient.
  • Toiletries
    • Make your own soaps
    • Get freebies when you can – I used to travel a lot for work and would take home the hotel soaps with me.
    • Buy in bulk, when on sale.
    • Buy generic brands.
    • Make your own surface cleaners.
  • Groceries

Although these expenses are necessary for you to live, you can and should be paying less! Many people over look these expense categories in their budget by waving a hand and saying “well I need water, power, food, etc”.

Don’t become complacent, be mindful. You’re watchfulness will payoff.

How do you plan on reducing your essential expenses?

Join the Conversation


    1. Of course, maximize your income! But why not approach your savings rate from both prospectives? Reduce expenses and work on increasing your income!

      You certainly wouldn’t tell someone to take on a new car loan if they’re trying to increase their savings rate, would you?

      Thanks for the comment and your prospective!

      Liked by 1 person

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