The First 5 Things You Should Cut When Money Gets Tight
When money gets tight, the first step is typically to cut discretionary spending.
"Discretionary spending includes items such as dining out, entertainment and travel," said Robert R. Johnson, Ph.D., CFA, and professor of finance at Heider College of Business at Creighton University. "Prescribing the first things that people should cut when finances get tight is going to differ from person to person."
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While it's important to prioritize necessary expenditures, Johnson explained that a one-size-fits-all approach to spending changes is not appropriate, and the purchase of goods and services must be intentional.
"The key is to budget in order to maximize one's own unique preferences and not those of others. One certainly shouldn't cut out those things that truly bring us happiness," he explained.
Here are five spending categories to consider cutting when money is tight.
Cut Back on Eating Out
"Eating out is a financial drain. It may be enjoyable, but it's not necessary, and it could free up a couple of hundred dollars a month," said Melanie Musson, finance expert at Quote.com.
In 2025, Americans continued to spend a substantial amount on eating out, with the average consumer spending about $879 per month at restaurants, according to Empower. Restaurant prices also rose faster than groceries in 2025, and since 2019, food and labor costs have gone up by more than 35%, based on data from the Bureau of Labor Statistics Consumer Price Index and as reported by Barmetrix.
"Even ordering pizza delivery can be cut out," Musson said. But this doesn't mean you have to cut out all restaurant spending.
"It's hard to argue with a $6.99 medium one-topping from Domino's, but a $40 specialty pizza from the boutique pizza place needs to be cut," she said.
Consumer and money-saving expert Andrea Woroch recommends setting up a weekly menu to reduce your reliance on takeout and impulse food purchases.
"Cook in bulk and freeze single-serving leftovers so you have meals that are easy to reheat on those nights you don't feel like cooking or simply you don't have time to tackle it, which will help you avoid ordering take-out," Woroch said.
Address High-Interest Debt
Woroch explained that paying down debt is the best way to reduce credit card payments, but it can feel impossible when money is tight.
"But you can stretch your budget by cutting the interest rate on your debt, which will dramatically reduce your monthly payments," Woroch said. "This is actually easier to do than you may think -- begin by negotiating a lower interest rate."
She recommends consolidating your debt with a personal loan, which typically offers a lower interest rate and easy-to-manage payments, doing a balance transfer that offers a 0% interest introductory rate or using apps like Debt Payoff Planner that allow you to come up with a debt repayment plan and track your efforts to keep you on task.
Avoid Impulse Buys
"It's so easy to buy things online. Sometimes a sale will entice you to purchase something you weren't even planning on buying. You may think of something that would be nice, and one minute later, it's being shipped to your house," Musson said.
The Motley Fool found that nearly 60% of millennials and 45% of Gen Z spend over $100 per month on impulse purchases. Nearly half regret these impulse buys later.
"Those are the kinds of things you need to cut when money is tight," Musson said. "Plan for what you need, and defer the things you don't."
Reduce Monthly Expenses
"Cutting back on spending doesn't mean you have to make major sacrifices. In fact, you can reduce spending on bills without changing services," said Woroch.
You can cut back on services you don't need or look for ways to lower the amount you pay each month. "Try negotiating rates with current providers, cancelling unused subscriptions or reducing extra services you don't need, increasing your insurance deductible to lower premiums, unplugging unused gadgets for up to 10% savings on electricity and bundling services for savings on plans," she said.
For example, the Netflix premium plan costs about $25 per month. If you still want to use the service, consider switching to a standard plan with ads, which is $8 per month.
Cut Travel
You don't need to avoid travelling altogether, but Musson advises cutting back when money is tight.
"Travel can be expensive. Everything adds up from fuel to food," she explained. "Vacations are essential to well-being, but you can have an exciting staycation or a budget-friendly vacation. You just may need to do things differently from how you usually do them."
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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