How To Cut Expenses In The Most Expensive Areas Of Your Budget?


When it comes to budgeting, it’s easier to focus on cutting small expenses here and there to save money. Canceling a subscription to a streaming service you no longer use or cutting down on your Starbucks pitstops are all simple steps you can take to reduce expenses. But let’s be real – your most significant savings will come if you cut costs in the most expensive areas of your budget. This can help you significantly impact your financial picture without sacrificing too much. In this article, we’ll discuss which areas of your budget you can cut down on to create the greatest impact and provide tips and strategies on how to do it.

According to the Bureau of Labor Statistics, the top three areas that Americans spend the most in are housing, transportation and food.
Housing accounts for 33% of total expenses, followed by transportation at 16% and food at 12%.

Additionally, tax expenses are another key area where we can save more if we plan wisely. I like to call this strategy Cutting the F.A.T.T. – cutting expenses in Food, Accommodations, Transportation and Taxes.


We all need to eat every day. Naturally, this can make food a significant expense for most people, regardless of whether you cook at home or eat out.

The cost of buying groceries and preparing meals at home has risen significantly in recent years. Can you believe that the average price for a dozen eggs is now $4.25?! Eating out can also be another reason that our food expenses take up so much of our income, especially if we feed a family.

One of the strategies I encourage my clients to use is separating convenience dining from intentional dining. When we’re busy with daily routines, we tend to opt for convenient food options like fast food, takeout, or delivery. However, not only do these tend to be the unhealthiest, but they are also usually more expensive than cooking at home.

Another reason food expenses can be high is that we often buy more than we need. This can happen when we shop without a grocery list, buy items in bulk that we won’t use before they expire or buy pre-packaged meals that are more expensive than a homemade meal. Food waste can also be a significant problem for our wallets and the environment.

Here are some strategies you can use to reduce food costs:

  1. Meal planning: Planning meals before you go shopping will help minimize food waste and avoid impulse buys.
  2. Coupons and discounts: Look for items on sale and search for coupons on items you purchase often. Tip: Most sale cycles run every 6 weeks.
  3. Dining out: Eating at restaurants can be much more expensive than cooking at home. You don’t have to stop eating out but reduce the number of times you grab and go and be intentional when you want to dine out. It’ll enrich your dining experiences while keeping your spending at bay.
  4. Buy items in bulk: Items that you use often, which have a long shelf life, can be cheaper if purchased in bulk, like rice, pasta, and beans.
  5. Storage: Proper storage of food can help prolong its shelf life. Use airtight containers to store dry goods, fruits, and vegetables in the refrigerator.
  6. Use up leftovers: Plan for leftovers and find creative ways to use them, such as soups, salads, and sandwiches.

These simple strategies can help you minimize food waste and save money on your food expenses. And the best part? You won’t have to sacrifice the quality of your meals!


Americans spend an average of 33% of their total expenses on housing. This includes mortgage payments or rent, utilities, and home maintenance. When it comes to reducing housing costs, there are a few creative strategies to consider:

  1. House hacking: Consider renting out a spare room. In big cities, you can even rent out garages or parking spaces. This can help offset your housing costs and potentially make you a profit.
  2. Negotiate: If you’re a renter, try to negotiate a lower rent with your landlord. Also, ask them about any available discounts or promotions. In the past, I’ve offered to sign a longer lease to eliminate a rent increase.
  3. Downsize: With the popularity of tiny living, downsizing to a smaller home or apartment isn’t as taboo as it once was. This can reduce your housing costs significantly.
  4. Utilities: Look for ways to reduce your utility costs. Simple things like turning off lights, unplugging electronics when they’re not in use and set your thermostat to a lower temperature can help lower your bills.

Get creative and be open-minded about your housing or accommodation options. If you think hard and do the research, you’ll see that you can cut costs without sacrificing your comfort or quality of life.


Transportation costs include owning and maintaining a vehicle, fuel and public transportation. And for most people, this can be a significant chunk of their budget.

As with many things, the cost of owning and maintaining a vehicle has risen in recent years. Here are a few tips to consider when trying to reduce transportation expenses from your budget:

  1. Maintenance: Regular maintenance can increase the life of your vehicle and prevent costly repairs in the future. Things like regular oil changes, tire rotations and other routine maintenance tasks can prolong the life of your vehicle.
  2. Bike or Walk: If you are able-bodied and live close enough to work, school, or other destinations, consider biking or walking instead of driving. This will save you gas money and improve your health.
  3. Use public transportation: If you’re in a city where public transportation is reliable and convenient, consider using it instead of driving.
  4. Plan ahead: A simple way to reduce fuel costs is to plan and club your shopping and errands together to reduce the time you commute back and forth.
  5. Carpool: If you must drive, consider carpooling with coworkers or friends. This can help you save money on gas and wear and tear on your vehicle.
  6. Car Insurance: Shop around for car insurance and compare rates from different insurance companies. Ask about any promotions or discounts available for a qualified group, including teachers, veterans, nurses and government employees.
  7. Uber: It can be tempting to hop in a taxi cab or schedule an Uber or Lyft ride to get you where you need to go. But these convenient rides also come at a price. If you use these services often, create a line item in your budget and track how often you use them.

Finding creative ways to commute and travel isn’t just about cost reduction. It can also help you reduce your carbon footprint and contribute to a sustainable environment. Also, making choices like buying a used car instead of a new one can save you significant money.


I love talking about tax reduction strategies! When we try to curb our expenses, we often forget that taxes are a huge expense that’s frequently overlooked. Here are some ways to reduce your tax liability and your taxable income:

  1. Contribute to a 401(k) or IRA: Did you know that the IRS incentivizes us to save for the future? Contributions to qualified retirement accounts are tax-deductible and can lower your taxable income.
  2. Tax-Advantaged Accounts: Contributing money to a Flexible Spending Account or a Health Savings account will reduce your taxable income.
  3. Maximize your deductions: Become familiar with the tax deductions available to you and claim them. Take advantage of the deductions you qualify for, like charitable donations, state and local taxes, and business expenses.
  4. Miscellaneous employee benefits: Medical, dental and group-term life insurance are examples of workplace benefits that save you money by allowing you to use pre-tax money. Some states even have commuter benefits which allow you to pay for your work commute using pre-tax dollars.

It’s important to note that tax laws are complex and subject to change. Work with your tax professional for personalized advice.

Focus on cutting the F.A.T.T.

If you want to get closer to your financial goals, you need to start getting intentional with every dollar you spend. Small changes and sacrifices in the right areas of your budget can create a lasting impact on your overall financial well-being. So while it might be tempting to cut $3 here and $10 there, focus on working intentionally and cut the F.A.T.T. to create maximum impact.

Be flexible and creative. Take time to consider what brings you joy and what you value most. Spend money on that and reduce spending in areas that matter less.

Remember, managing your money isn’t about deprivation. It’s about getting crystal clear about what matters most to you and using money as a tool to achieve your goals and live the lifestyle of your dreams!




About the Author

Walli Miller (Founder - Financially Thriving Money Coaching)

Walli Miller is a financial coach and founder of Financially Thriving Money Coaching. She coaches professional women who want to leverage their 9-5 to save money, build wealth and be work optional. When she's not coaching, teaching or writing about money she's traveling and spending time with husband and blue-eyed French bulldog.


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