The Two Most Important Questions When Cutting Down Your Budget

cutting money dollar bill

There are as many reasons for cutting a budget as there are individuals: maybe you’ve just lost a job or got a pay cut, or perhaps you want to save more for an upcoming trip, or maybe you have a brand new budget and realized that you’re spending way too much.

Cutting budget categories has a lot of emotion attached to the process, particularly if you’ve lived with the same level of spending for some time. There’s always a reason or excuse for why you can’t eliminate A and why you can’t cut B. You get attached to your current lifestyle and it’s very hard to envision doing it any other way.

That’s why today, I have a very simple but very powerful pair of questions that will bust any budget wide open:

  • How can significantly reduce this budget category?
  • How can I completely eliminate this budget category?

Whoa, you might say, wait just a minute–I’m supposed to tell you how to eliminate all spending for some of my spending categories? But that’s impossible!

I hear you, and that’s why I have examples, to show you that nothing is impossible. And once nothing is impossible, you can actually start making choices about what you want to change, which is rarely as drastic as this exercise would suggest.

Let’s take a couple of “fortified” categories where many people simply refuse to budge. Housing comes to mind–but I don’t want to move, you might say. That’s not the point of the exercise. The point is, if you absolutely had to reduce or eliminate, what is the next action step? For me, reduction might mean selling my house and moving to a small apartment. Complete elimination could mean moving in with a friend or family member. I didn’t say it was easy, did I?

Okay, now I have two perfectly good options to eliminate my mortgage payment if I feel the need to do so. Am I going to do that now? Of course not, but it has opened the conversation.

Let’s take our personal care category, which includes items like shampoos, soaps, Q-tips, and grooming items. How am I supposed to take showers without soap, you ask, but that is the wrong question. The right question is–how do I get soap without paying for it? Illegal theft aside, I can think of a couple of options.

Personal care items are often the target of sales and coupon schemes that make it possible to get many toiletry items at very low cost or no cost at all. If I had some time on my hands, I might consider ordering free samples of different products or using the sample-sized hotel bottles of a friend who travels a lot. Again, I didn’t say it was going to be easy or free of possible shame. But now I’m thinking creatively.

Okay, one more, just to round things out. Let’s go big or go home with groceries.

Okay, I’ll admit that it would be very hard to live if we couldn’t eat, and we’re not taking things to that extreme here. Thankfully, even this category can fit into our exercise with a bit of critical thinking. Since eating is a life-or-death matter, the U.S. government steps in for people who have incomes low enough to qualify for food stamps. In theory, someone using only government subsidies would not be “spending” any money out of their own budget–if money is so tight that you’re considering eliminating the grocery budget, then I would certainly not hold it against you to get temporary help from public sources.

On the reduction side, groceries are actually pretty easy. There’s a wealth of information on the web about how to cut grocery spending by doing everything from shopping in bulk to clipping coupons. I would go as far as to limit the types of food I was buying–no more luxuries, no more desserts, until the flow of money to the category can be restored.


I encourage you to look through your budget when you have a few minutes–take the time to sit with each category, figure out these two burning questions, and write them down for future reference. Implement what you feel is appropriate and save the rest for more challenging times.

Don’t hold anything sacred, and you might walk away very grateful for what you have today!

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