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How to Live on Less

How to live on less
If you’re wondering how to live on less, this article is here to help.

Are you wondering how to live on less? A lot of people are these days. COVID-19 has resulted in record unemployment claims, and the economy is facing an ugly recession. Whether you’ve lost your job, had your hours reduced, or are just uncertain regarding your future finances, it never hurts to think about how to live on less. Below are a few ideas in different categories, including expenses that can be eliminated, expenses that can be reduced, expenses that can be negotiated, and expenses that can’t (or shouldn’t) be cut.

A few ground rules first:

Remember to…

  • Take advantage of government programs. The UK, US, Canada, and many other countries are rolling out plans to help small businesses, home owners, and the unemployed. For those of you out there who don’t like taking government money, remember that the government don’t really have money. The money our government has is actually the funds it raised from investors (possibly you), or the funds it has generated from taxes (probably you). In other words, the government is giving you your own money back.
  • Use private programs as well. Food banks, church groups, and other organizations are doing what they can to help. Search out options in your community and get a sense of what services are available.
  • When you buy something consider, buying used, review how to be a savvy saver, and think about your overall financial picture – this way you can get the most out of how to live on less.

Expenses to eliminate:

Expense items that my partner and I have eliminated for the time being, whether willingly or not, include:

  • Travelling, going on vacation, and even the odd weekend trip
  • Using ride-hailing services, taxis, car shares, and even public transit
  • Eating out at restaurants, going to cafes, and ordering in
  • Going to movies, concerts, plays, and sporting events with friends and family
  • Subscriptions to most publications, magazines, and other non-essential services
  • Gym and club memberships
  • Gifts and presents to others we would see in person, and personal gifts to ourselves or each other (from expensive electronics to inexpensive books)
  • Home renovations, except for essential repairs

In most places, many of these services and items are difficult or impossible to purchase anyway. The COVID-19 lockdown has cancelled sporting events, eliminated international travel, and closed so many restaurants that making cuts to much of the above has been relatively easy.

Expenses to reduce:

Items that we have reduced but would not necessarily eliminate include:

  • Driving for leisure (and so burning fuel)
  • Non-essential clothing – i.e. most clothing these days… since we are now rarely leaving the house!
  • Most toys for kids, pets, or hobby equipment for adults (or toys for those who never grew up… sadly my partner vetoed my recent wish for moon shoes).
  • Streaming services (cutting down to one, or setting up a subscription share circle with friends or family instead)
  • Expensive phone, internet, and banking services – switching to cheaper plans or providers (see special deals) may be worthwhile.
  • Certain grocery store purchases (e.g. organic foods or brand name items)

Deciding what to reduce can be tough. Quiet weekend drives may be a long-formed habit, and a way to get out of the house, and spending on certain items like designer clothing or organic foods may exemplify personal characteristics or values. As a result, it may be hard to de-prioritize in some of these categories. For some, the trade-offs may not be worth it, but if you’re truly in a tough situation, or are worried that you will be soon, the times call for tough decisions too.

Expenses to negotiate:

Continuing expenses that you may be able to negotiate in order to reduce or defer include:

  • Mortgage payments or interest rates on mortgage debt (especially as rates are moving lower)
  • Car payments and rates on car loans
  • Monthly credit card payments (assuming you don’t pay off your balance in full each month)
  • Phone, internet, and banking costs, assuming you don’t switch to a cheaper provider (see special deals)
  • Hydro, gas, utility, water, and municipal service bills
  • Rent

In addition to various government programs aimed at reducing these costs, you as a consumer can always talk to your bank, service provider, or landlord too. Negotiating cost reductions here may be important as these costs (e.g. a mortgage or rent) are often large recurring expenses. Even getting a deferred payment on a utility bill is a big win (assuming you’re not still being charged interest) as it will put more money in your pocket today.

Necessities, or expenses NOT to cut:

Expenses that my partner and I would not cut include:

  • Life insurance, critical illness insurance, and disability insurance payments
  • Home insurance, fire insurance, and car insurance payments
  • Mortgage or rent payments and strata fees
  • Property and income taxes (many governments have deferral programs in place anyway)
  • Prescription drugs and critical medical expenses

These items would not be cut until all the other options were exhausted. Before missing a mortgage payment, we would be negotiating hard and taking advantage of all available programs. As for insurance, you just can’t time when you may need it – so best to keep it. Covering critical medical costs, including ongoing prescriptions, is the most important priority of all.

Final thoughts:

If you’re wondering how to live on less, it may help to break it down into the categories above – what do you need, what can you reduce, and what can you live without? Although the lists above are by no means complete, they should give you some good ideas of how to get started. (If there are other items that you feel should be added, please let me know). Once you’re done here, consider checking out the Excel templates on my free financial resources tab to help you budget, record your spending, and track your net worth. You can also read the steps my partner and I took to double check our personal finances last month when COVID-19 really got going here.

Good luck! Stay safe, and most of all, keep healthy.


Please keep in mind I am not a financial advisor and the opinions expressed are my own. My Money Moves does not provide financial advice – it is an informational website that details my own approach to my own money and personal finances. If you need specific financial help or guidance, please do your own research and seek out a professional who can work with you to reach your goals.

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3 thoughts on “How to Live on Less

  1. As someone who has been a seasonal worker in the past, and used EI, there is something important to know about EI money. The money you receive from EI will have tax taken off it when you receive it but it is not taxed high enough. So when it comes time for income tax, your EI money will be owing tax to the government. So it will eat into your tax return a little.
    Just something to be aware of.

  2. Good comment on EI taxes. I’ve talked to a quite a few people who surprisingly don’t seem to realize the CERB is taxable either.

    Wise advice in the section above on expenses NOT to cut. Some of those items are fairly easy to axe, but not always advisable to do so!

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