Expense Reduction

The United States Bureau of Labor Statistics publishes the Consumer Expenditure Survey, an excellent collection of data tables that cover, in excruciating detail, the spending patterns of the US population sliced and diced by every possible variable.  For the average American, housing (32.8%) and transportation (17.5%) account for one-half of total expenditures; the next quarter are composed of food (12.8%), health care (6.9%), and entertainment (5.1%).  The largest categories often offer the largest room for improvement.  Use tools like Mint.com to figure out what your major expenditures categories are, so you know what to target.  The list below is divided up using categories that are similar to those in the Consumer Expenditure Survey.

It can be very helpful to calculate what you would need to save to increase your savings rate by 1%.  For example: I make $32,000 per year, so reducing my spending by any of the following represents a 1% increase in my savings rate:

  • $320 per year
  • $27 per month
  • $6 per week
  • $0.88 per day

This puts the little day-to-day optimizations in a bigger context!

Many of these ideas can be made even better by adding a secret ingredient: community.  If you can get family, friends, housemates, and neighbors on board, you can save more money while getting even more of the social interaction that everyone could use more of.  Examples: take turns cooking dinner, offer your book collections for lending, borrowing items that you only use occasionally (vacuum cleaner, power tools, lawn mower), etc.

This list is by no means comprehensive, and it never will be!  Given these ideas, you should be able to come up with plenty of your own that are relevant to your lifestyle.


Buying a house is only occasionally a good investment.  A house is illiquid, completely undiversified, and involves substantial transaction costs.  Don't feel pressured to buy, especially if the housing market has recently been on a run — what goes up, must come down!

Downsize your living situation
Live with housemates, apartmentmates, roommates
Don't pay for luxury services—cut your own grass, walk your own dog, etc


Join a carpool
Utilize public transportation
Use a bicycle for short trips
Consider a carshare program
Do your own car maintenance (oil changes, etc)
Go for a low-mileage car insurance discount


The average American spends over 5% of their income on 'food away from home'.  This is probably the easiest single category in which to make multiple-percentage-point improvements in savings rate!

Eat a substantial breakfast—this is an easy, healthy, low-cost meal!
Bring a lunch and snacks to work

Buy sane groceries—buy in bulk, and avoid high-cost luxury ridiculousness

Health Care

Consider a high-deductible health insurance plan
Stay healthy!
 • get regular exercise
 • eat well
 • get sufficient sleep
 • take regular days off
 • when you do get sick, focus 100% on getting better


Accumulate low-cost hobbies that fulfill other needs
 • DIY (build and repair instead of buying)
 • team sports, outdoors activities (social, fitness)
 • cooking (save money while entertaining friends and family)

Cancel underutilized subscriptions and memberships
Cancel cable and satellite TV subscriptions
 • consider Netflix, Hulu, Amazon Prime, Redbox, or nothing at all!

Borrow books from friends or the library instead of buying them
Reduce bar expenditures
 • pregame, pad drinks with glasses of water, drink less


Thrift Shop!
Skip trendy, overpriced brands
Pay a premium for quality clothing and accessories that will last
Learn how to make basic clothing repairs and modifications
End your retail therapy addiction and deal with the root problems

Personal Care

Have a friend help you cut your own hair
Avoid trendy, overpriced junk

Drugs and Alcohol

Quit smoking
Limit alcohol consumption (especially in bars and restaurants)
Purchase beer and wine by the case
Brew your own beer or wine


Make gifts for others instead of buying them more stuff they don't need

Get creative!  If you can think of some more that I missed, add them in the comments!