Home > Budgeting and Saving Money > The Simple Way to Determine What to Cut From Your Budget

Comments 0 Comments
Advertiser Disclosure


If your budget is not quite looking the way you’d like, it may mean that it is time to cut back on some things. The question I often hear is, “How do we know what to cut?”

If you are like most people, you look at your budget and believe there is nothing at all you can cut. You have tried to move the numbers around time and again, but end up with the same result — not enough money to cover your expenses.

This leads to a lot of stress. How will you pay the mortgage? What about food? And the credit cards? No way can you pay those. You know you need to make changes to your budget, but how do you decide what to cut?

Follow these steps to find out what you need in your budget (you can get a free form to help budget by heading over here).

1. Cover Living Expenses

The first thing you need to do is make sure your living expenses are covered. These include items such as rent or mortgage, utilities and food. These are the musts. You might be able to cut back a little on your food budget, but in many cases you already have.

2. Pay Your Creditors

Next, add the payments you need to make to your creditors every month. This includes medical, vehicles and credit card debt. Only list the minimum required payment at this time. (Remember, high levels of debt can hurt your credit scores. You can see how your debts are affecting your standing by viewing your free credit scores, updated every 14 days, on Credit.com.) You want to make sure your basic budget covers all of your required expenses.

3. Determine Wants vs. Needs 

Now that you have your basic expenses all covered, you next have to determine which items you really need versus those you think you need. For example, if you have dining out in your budget, that is not a need. That is truly a want. You may have clothing in your budget, which is a need, but you might be able to lower the amount you budget for kids’ clothes (say, by shopping consignment or sales to stretch your dollar).

When my husband and I were getting out of debt, this is exactly what we did. We created a brand new budget. The first items we listed were the things we needed in order to live. We then added in the few debts we owed. Finally, we looked at how much money we had left to spend and decided which “wants” we would like to add back in and which ones we were willing to give up, just to have additional money to pay off our debt.

It was a challenge for us, too. I did not like it. However, by doing this for just a couple of years, my husband and I were able to eliminate our debt. Now money is something that does not cause us stress. Our budget is simple. We never worry about paying the mortgage or putting food on the table.

When it comes to your finances, there are times when you have to make tough decisions. We all have the things we want, but if you are having financial struggles, you will have no choice but to cut back wherever you can. Small sacrifices now can pay off with huge rewards later.

More Money-Saving Reads:

Image: Geber86

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team