How do you live below your means when you’re living paycheck to paycheck? That’s where knowing where every dollar is going comes in. This will be a two-part post. I’ll discuss places you can look at to find places to cut. In tomorrow’s post, I’ll make other suggestions on where to find money and a four-week plan to make small changes.

In essence, you’re going to have to make cuts. Start listing your expenses such as your utilities and housing, transportation, debt spending, subscriptions, food (including groceries and restaurants), and any other expenditures. Look at what’s called the big three: housing which includes utilities, transportation, and food. Look at the last thirty days of your spending. If you find your expenses vary, use a three-month average.

Perhaps ask the landlord to reduce your rent? Can you find a roommate? Move to a cheaper place when your lease is up. Are mortgage interest rates lower than what you’re paying now and can you refinance? Analyze if refinancing costs are worth it. Can you save money on utilities by doing things differently such as lowering your thermostat when you go out? Have you switched to LED bulbs? Do you use fans to augment your air conditioning? Maintain your HVAC system and change your filters regularly. Make sure you fix any leaks in the plumbing asap to stop water waste. Run your washer and dishwasher when full.

For transportation, can you carpool? I did that with a coworker when I was working. Can you get a lower insurance premium by opting for a higher deductible? If your car is really old, perhaps switching to a liability only policy would make sense. If your car is worth less than $5,000 or older than 10 years, it might make sense. Discuss that option with your agent.

For food, create a weekly meal plan and stick to it. Buy generic brands at the store as they are usually less expensive but have the same quality as name brands. Cut back on eating out. This one is huge. Eliminating that high priced coffee or latte on your way to work can make a significant difference over time. Use cashback apps, coupons, or store rewards to reduce your grocery bill.

Moral of the story:

The moral will appear in tomorrow’s post.