How to Cut Your Monthly Expenses When Living on Your Own

There are several ways to cut your monthly expenses when living on your own.

The first is to create a budget. This can be as simple as figuring out what to eat for lunch every day.

You should also set aside money for savings and debt payments, as well as for fun and entertainment.

After you’ve calculated all of your monthly expenses, you should determine how much you can spend on these items each month.

After all, there’s no need to have a lavish lifestyle just yet!

Living on Your Own in Your 30s – Financial Considerations

Budgeting For Monthly Expenses

When living on your own, you’ll find that your housing costs are often the most significant expense of the month.

These include monthly rent or mortgage payments, as well as any additional costs for home maintenance.

You’ll also pay property taxes if your state requires them, although they are often included in your mortgage payment.

Lastly, you’ll need to budget for emergencies and savings. In addition, utilities will often increase during the colder months of the year.

How to Budget for Monthly Expenses when Living on Your Own

To budget for monthly expenses when living on your own, divide your monthly income by the total of fixed and variable expenses.

Deduct this amount from your net monthly income.

The remaining money is the means to pay down debt faster, add to savings, or cover other expenses.

If your monthly expenses are too high, try cutting back on some of them.

This can range from eating at home more often to moving or finding a roommate.

If you have a car, make sure to include it in your budget. It will help you determine how much money you spend on gas.

You should also add the cost of phone service. You should also allocate some money for fun and frivolous purchases.

However, this money is limited so be sure to budget for it accordingly.

If you want to avoid overspending, consider using an envelope system, which divides your cash into different envelopes for different categories.

If you don’t feel comfortable using this method, consider using an envelope system to allocate your spending categories.

When an envelope is empty, you’re done with that category.

Discretionary Expenses

Discretionary expenses when living on a budget are the things that you spend money on that you might not otherwise purchase.

While many workers have to pay federal and state taxes on their income, they also must pay monthly debt payments.

There are certain expenses that are must-haves, such as food, fuel, and electricity.

However, this can vary depending on the time of year and how much you spend on these items.

Discretionary expenses are the things you enjoy or don’t need, but that you can’t live without.

Cutting Down On Discretionary Expenses

Generally, the best places to cut back on discretionary expenses are those that don’t affect your day-to-day life.

For example, the first thing to do is evaluate whether you truly need the gym membership or not.

Then, think about what other things are important for you. Is the gym membership worth a membership when you could save that money?

This can be a very difficult decision, but a budget will help you reach your financial goals.

Often, the most important way to reduce discretionary expenses when you live on your own is to create a budget.

This will help you track your spending and keep you from overspending.

Make a list of all the things you want, and then set aside money for them every week. Be sure to make decisions when your cash runs out and stick to your budget.

Even just a little bit of discipline can make a huge difference in your budget.

Housing Costs

While most landlords will cover a portion of your utilities in an apartment or house, these costs will vary widely.

This includes utilities such as gas, electricity, cable TV, and waste disposal. Some utilities are fixed, while others vary based on how much you use them.

In some cases, you will need to pay a security deposit to protect the property.

Fortunately, there are ways to cut these costs while still maintaining privacy and comfort.

To figure out how much to spend on utilities, gas, entertainment, and groceries, you will need to adjust your budget.

You likely did not have these expenses when you were living with your parents or in college, so you should figure out how much each of these costs will be.

You should also budget for other living expenses, such as car insurance and entertainment.

Once you have a good idea of what you need to spend, you can start comparing your estimated spending to your actual expenses.

The Cost of Electricity

Electricity is another huge cost, which can run anywhere from $40 to $200 per month.

In major cities, electricity can be especially expensive, so you might need to share a room with another person.

It’s wise to make a two or three-year lease to ensure that you can afford it.

Another sneaky utility that can be difficult to monitor is hot water. Heating water with electricity can be expensive. Make sure you can pay the bill each month.

Food Costs

How much money you spend on food can make a huge difference in the cost of living alone.

According to the U.S. Department of Agriculture, a woman will spend $268 per month on groceries. A man will spend $335 per month.

If you live alone, you will likely increase your grocery budget even more. However, if you regularly invite friends over, you can always chip in a dish to share.

One way to reduce per-person costs is to share some items. This way, you can have fresh almond milk for example, and less waste and reduce food costs.

Another way to save money on food when living on your own is to share your fresh produce, bread, and spices.

By doing this, you can avoid the cost of buying expensive and unhealthy foods. The same goes for groceries, including spices, dairy products, and toilet paper.

According to the BLS,  the average American household spends nearly $70,000 on food per year, and 45% of that money goes on eating out.

The average U.S. household pays $5,528 per year to help protect its members.

Most of the food expense comes from the household’s contribution to Social Security, which 77% of American households pay.

This amount is considerably lower than the average for any other type of household, though it is still a significant portion of your budget.

Maintenance Costs

Homeowners have certain expenses to save up every year. This includes property taxes, insurance, utilities, and DIY projects.

However, homeowners should keep in mind that they are also responsible for ongoing maintenance costs.

Regardless of your budget, it is important to set aside money for routine maintenance and prepare for emergencies.

Listed below are some of the most common and expensive household expenses.

Common and Expensive Household Expenses

Homeowners should also factor in maintenance costs into the purchase price of their home.

Experts suggest spending one percent of the home’s value on maintenance.

That means $168 a month for a $200,000 home. Although this is a rough estimate, it’s worth considering if you aren’t on a fixed maintenance schedule.

If you’re looking for the lowest-cost rental, consider renting a small to medium-sized home that has been well-maintained by previous owners.

Lawn Care

Another common expense is lawn care. The average American homeowner spends between $1,200 and $2,400 per year on lawn care.

Most of this money goes toward lawn mowing, watering, and general landscaping.

While lawn care is a necessary expense, it can be expensive. You should consider all the costs and determine what you can afford.

By planning ahead of time, you’ll be able to save thousands of dollars on these expenses.

Unexpected Expenses

Living alone can be expensive, especially if you don’t have roommates.

Renting a smaller space may also be more expensive. Renters’ insurance is another major expense when living alone.

Moving to a new place can be expensive, too. Moving expenses include application fees, security deposits, and renters’ insurance.

Fortunately, many of these costs can be avoided with careful planning and preparation. Here are some common unanticipated expenses that you should be prepared for when living on your own.

Credit card debt. Despite the fact that most Americans carry credit card balances well over $5,000, it can be tough to keep up.

Despite monthly payments, credit card bills can take a large chunk out of your paycheck and continue to grow as interest builds.

Even if you manage your credit card bills carefully, unexpected expenses can come up. So, how do you prepare?

Below are some tips to keep you from spending more than you can afford.

Rental costs. Renting alone can be expensive, and rent is typically not 30 percent of your income.

Depending on where you live, other expenses can add up quickly. Also, don’t forget about utilities, which can quickly add up. Unexpected expenses can be stressful.

As with any loan, explore your options carefully before taking out a loan.

Remember that every lender has different requirements, so make sure to check with your bank or credit union before applying for a loan.

Final Thoughts

Living on your own is an inevitable part of growing up and adulting.

This stage comes with a lot of cost and responsibility.

Fortunately with the tips and guidance we have shared above you can cut down your monthly expenses when you are living on your own.