How to Save Money » Frugal Living

How to reduce your fixed expenses and start saving money today

Every month, money comes in, and money goes out. When your money is going out, it can go out one of two ways. You have your fixed expenses – costs that are about the same every month, and your variable expenses. Variable expenses are just that – fluctuating from month to month depending on hunger, weather, and willpower.

Cutting back on variable expenses is something that is an active adventure each and every day, but you can reduce your fixed expenses with a one-time investment that will have you saving money today and can have lasting impacts on your budget. If you want to spend a little bit of time reducing a fixed expense so that you can be rewarded over the next year, follow the steps below.

Find a bill

Hopefully, you keep track of what bills you pay every month. Even if they’re set up on automatic payments, you should be aware of what services are being paid on a regular basis, and approximately how much each one costs. If not, then that should probably be your first step – figure out where your money is going.

Once you have an idea of what bills are being paid every month, pick one to reduce. It can be your cell phone bill, internet provider, car insurance – anything that you want to pay a little less for. You’ll get the most bang for your buck by picking the bill that costs you the most every month, so you can always start there.

Research alternatives

Depending on which bill you want to reduce, the first major step you should take is figuring out what other options you have. You’ll use that information to get yourself a better deal – either by switching providers, or leveraging a competitor offer against your current company in the hopes that they’ll beat or match the alternative.

There are lots of ways that you can compare different offers. The best way is to visit the website of different providers or keep an eye on local flyers and deals. It is best if you can keep yourself out of contracts so that you have the freedom to move from provider to provider, as that’s often the cheapest way to maintain a fixed expense.

If you’re looking to change up your cell phone plan, I highly recommend Their compare plans page is incredible at helping you find a plan at your budget that is perfect for your needs.

If you’re looking for an inexpensive internet provider, check out CanadianISP. They also have a great listing of smaller independent ISPs that you can compare against the big names (Telus, Bell, Shaw, Rogers, MTS, etc). They’ll often have less expensive service, but you’ll have to do without some of the perks of a bigger provider, like 24-hour tech service or free service calls.

Call your provider

Once you have a good option lined up, call your current provider. Let them know straight up that you’re interested in reducing your bill, and that you’re looking at a competitor’s plan to reduce your expenses. The three keys are to be firm (don’t take no for an answer), be polite (don’t raise your voice or swear), and be clear (tell them exactly what you want to see happen).

If they are unable or unwilling to match the alternative, simply call the other provider and switch your service. It can be a little difficult to switch providers sometimes, but the potential savings are often worth the inconvenience of having to set up your automatic payments or a new online account.

There are two major keys to being successful in doing this.

The first is to be knowledgeable about your alternatives. Don’t just find the cheapest service and expect your company to match that one – the features and service will probably not line up. You’ll have to find a service that is the same or better than your service (unless you are willing to downgrade), and have the conversation around the cost, not the value, or your services.

The second major key is that you have to be willing to walk away. The people you are speaking with don’t have this conversation once every six months, they deal with this type of phone call all day long. They are experts at dealing with people like you, so your only leverage is knowledge and the willingness to stop being their customer. If you are knowledgeable and are willing to switch providers, you have all the leverage.

How do you reduce your fixed expenses?


  1. krantcents

    I make a conscious effort to reduce every expense and I think about it every month when I pay the bills.

  2. Cherleen @ My Personal Finance Journey

    I know I can always reduce my cellphone, cable, and internet bills as well as my car and home insurance. But I never tried doing this because I believe I am still in control of reducing our variable expenses.

  3. niterainbow

    Find a better way to spend your money. Saving does not always help but having an inspirational idea does.

    Alternatively – keep investing more and more – this will help to trip the rest. A colleague of mine bought two rental properties. He was really cash strapped for a few of years – counting pennies. Now in his late 30ties he is laughing.

    Properties are paying for themselves and in a 6 years time he should have all income to himself (almost $3K a month!)

  4. Pretired Nick

    The first step for me is always to take a hard look at what is going out the door. Knowing where to focus is important for figuring out where to start. Cell phones and insurance are the ones that always seem to creep to the top of the list.

  5. Derick Branson

    Thanks for the information Alan. I liked the entire article, especially where it is said that negotiation with service provider. As there is competition in service providers, getting to another provider will definitely help in either reducing the cost or increasing the services on the same cost.

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