In a Financial Crisis? Here’s How to Quickly Slash Your Budget Back to the Bare Minimum

Many of us know all too well how scary fast all of our hard-earned savings can shrink… 

Over the past year many of us have experienced disastrous life events – relationships, illness, and job loss can all create financial crises. 

Even happy events, like maternity leave, can mean money stops coming in while the bills are still going out. 

So if you aren’t yet in a panic but want to get ahead of your financial situation, or if you are and need to confront the situation head on, here are some practical tips for doing so.

Your first mission: tackle every bill

Dig out bank account and credit card statements, find your login details for online banking, and track down all your direct debits, subscriptions and regular payments to figure out exactly what’s going in and out of your accounts every month.

Shrink your essential bills: While you can’t skip these there may be ways to reduce them…

Rent or mortgage: 

You can’t and shouldn’t try to escape rent or mortgage payments for the reason that it can snowball and you can end up losing your home. But you should check if you can get a lower interest rate on your mortgage. For example, if you’ve paid off a chunk of your mortgage, or house prices have gone up, you may qualify for a lower rate if you’re borrowing a smaller portion of the home’s value.

Council Tax: 

If you are on a low income, or a pensioner, you may be able to apply for Council Tax Reduction.


If you’re on a meter, investigate ways to use less water. If you’re on benefits and have specific reasons for using a lot of water, you may be able cap your bills with WaterSure.

Gas and electricity:

Check you are on the best deal, and switch if you’re not. Then check out ways to use less energy.


Paying for a fancy phone and over-inflated data and airtime package? Slash mobile bills by doing a bit of research into better plans your provider offers – often, if you mention that you’re looking to cancel, they will provide a better package for your needs. Or try keeping your current cell phone and switching to a more reasonable SIM-only deal. 


If you already have a mobile, assess whether a landline for your family is essential. If it is, check for a cheaper deal with a different supplier or smaller call package. 

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Wireless Internet:

See if you can pay less with a different supplier, slower speed or smaller package.

TV and entertainment subscriptions:

Do you pay for cable? Or for streaming services like Netflix or Amazon Prime? If you do, consider how many TV services you subscribe to and how expensive they are. You may be able to get away with only one, or move to free streaming on a service like Freeview instead. If you are paying extra for commercial-free viewing or listening, remember that commercials used to be the only option! It’s not the worst thing, if you can save more money. And finally, if you do free trials or limited time offers make sure to set a notification in your calendar before the deadline to reassess the service before you get trapped in a more expensive monthly plan. 


Commuting costs can be hard to avoid, but try to get creative. If your company offers flexible working, could you work part time from home? Or change your hours to take advantage of lower fares? Or cut travel time (and therefore fuel costs)? Some companies also offer gas and car fare which you may not be taking advantage of. If you work for yourself, your travel can be deductible in your taxes. 

Annual bills, such as car and home insurance:

For bills you only pay once a year, check if any savings from switching are worth more than any cancellation fees. If not, make a note on your calendar just before your contract ends – don’t auto-renew without checking if you could get a better deal!

Pensions and protection:

Keep up payments for pensions and life assurance, which can be vital to protect your financial future. If you’ve been auto-enrolled into a pension scheme at work, it’s worth paying in enough to get the maximum contribution from your employer. Otherwise, you’re turning down free money.

Your second mission: ditch those bonus “nice-to-have” bills

This is where slashing your budget might start to really bite. Once you’ve shrunk essential bills, it’s time to cancel anything else you can.

If you’re finding it tough, remind yourself this needn’t be forever, just until you dig yourself out of a financial hole, reach a goal, or simply get ahead of your spending. 

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Subscriptions you no longer need or use: Start with the easy ones – mobile phone insurance for the handset you no longer have, the gym subscription you don’t use, the magazine you don’t read. 

Other subscriptions: Believe it or not, we once lived without Spotify, Apple Music, audiobook subscriptions and craft coffee/beer/snack/beauty boxes.
Ditch any regular payments for optional extras, and look for free alternatives.

Childcare: If you pay for regular childcare, is there any way you can shrink the bill? Enlist friends or family to help? Switch your working hours? Even shedding one session a week adds up.

Charitable donations: Pause donations while you sort out your own financial affairs.

Mission three: Deal with your debts

Debt is expensive, unless you’ve got magical interest-free deals on everything. Debt repayments can eat up a massive chunk of income. 

Overdraft: Overdraft charges are high and rising, especially if you regularly use an overdraft. Ideal world, you need to pay off debt, starting with the highest rates, rather than creating more. If you have savings or Premium Bonds earning next to nothing in interest, consider using the money to clear your most expensive debts. Every debt you clear frees up cash to repay the rest, and then rebuild your savings.

Credit card debt: If your credit score is strong enough, see if you can switch any credit card debt to a 0% interest balance transfer deal. Crucially, you then need to stop spending on the cards you’ve cleared.

Car finance: Think hard about whether you could swap to a smaller, cheaper car – or even do without. As an added benefit, you’d also cut the cost of fuel, insurance, repairs, servicing, and car tax too. If you’re partway through a contract, check out the potential for ‘voluntary termination.’  

Focus on food: Food is one of the big three expenses for most families, along with transport and housing. The key to cutting food costs is to cook. Slash spending by banishing ready meals, takeaways and eating out, and by unleashing your inner chef. 

Yes, you may need to spend more time on meal planning, shopping lists, cooking meals and preparing packed lunches, but by buying in bulk and using what you have, the cost per meal will bring you substantial savings. 

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Other spending can be trickier to tackle: clothes, toiletries, hair and make up. Toys, hobbies, holidays and home maintenance. Presents, socialising and entertainment. It’s all too easy for money to disappear into a big black hole.

When times are tight ask yourself the following… 

Do I really need this now? 

Often it’s not something essential at all, or it’s a purchase I could put off. 

What have I got that I could use instead?

I start by shopping from the contents of my cupboards, using what I already have before buying new.

Could I get it for free?

Can I find hand-me-downs, swaps or from sites such as Freecycle? Borrow stuff rather than buying?

Could I get it for less?

Even with expenses I just can’t avoid, such as when the kids need new shoes, I still look for different shops, sales, and vouchers to cut the cost. I also check for second-hand, refurbished or cheaper alternatives. 

I’m reluctant to use the term ‘mindful’ spending, but I do recommend questioning each purchase, rather than buying on autopilot. I also recommend starting a spending diary, to become more aware of where your money goes (tips here and here).

Get some support

Check out websites such as TopCashback and Quidco every time you shop online, to see if you can earn some money back. Payouts can be particularly generous if you’re switching bills or financial products.

Loyalty cards

Whenever you shop often, they have a free loyalty scheme which could mean discounts on essentials like groceries. 

Refer-a-friend offers.

Always ask around if you are using a site or service for the first time, to see if you can benefit from refer-a-friend offers.

Seek help

You don’t have to do this alone. You could ask a trusted frugal friend to take a look at your budget and make suggestions.

But if you’re struggling to pay essential bills and cover minimum debt repayments, you need more help. Do consider contacting one of the free debt help services, such as StepChange, Citizens Advice or National Debtline.

The only thing you’ll regret about getting your finances in order is that you didn’t do it sooner.

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