Asked on Reddit: How Should I Trim My Monthly Budget?

Over on Reddit, a user recently asked for budgeting advice. After itemizing their current budget, the user was hoping to make cuts to their monthly spending and find a way to save more money.

The user said they brought in just over $3,300 in a month and spent about $2,600 on fixed costs, such as rent and insurance, along with line items for groceries and entertainment. The rest was for debt payment, leaving nothing for savings.

Applying the 50/30/20 budget — which suggests that 50% of take-home pay should go toward needs, 30% toward wants and 20% toward savings and debt payments beyond the minimums — the user was right on track, except for the savings and debt payments category.

Reddit responders had some good money-saving ideas, including switching to a cheaper cell phone plan and cutting back on extras, like car washes, electronics and fitness classes.

We turned to financial experts for their thoughts on the topic.

The financial experts we interviewed agreed that a budgeter’s top priority should be building an emergency fund.

“It’s very risky to have such a tight budget if you don’t have an emergency fund saved up,” says Kristen Vernace, certified financial planner and founder of Pathways Financial Planning in Portsmouth, New Hampshire.

“If you don’t have the cushion, one unexpected expense can throw everything off,” she adds.

Filip Telibasa, CFP and owner of Benzina Wealth in Sarasota, Florida, agrees. He suggests pausing extra debt payments beyond the minimum to focus on setting aside at least one month’s worth of emergency savings.

Then, if there is a rainy day event, it doesn’t put you into a deeper hole, he says.

Once one month’s worth of expenses is set aside, you can consider prioritizing high-interest debt before accumulating an even bigger savings cushion.

“You might be increasingly motivated to add more money to the account,” he says.

To build up that emergency fund, we need to find a way to adjust spending to throw more into savings each month, Vernace says.

“It’s hard when almost all your income is earmarked for something and you don’t have any wiggle room,” she says.

To overcome that problem, she suggests combing through every single line item on your credit or debit card statements to find areas to trim.

Ideas include asking your internet or cable provider for a better rate, cancelling some subscriptions and even switching to a lower-cost housing rental.

These measures don’t need to be permanent, but just until you achieve a more financially stable state, says Daniel Milks, CFP and founder of Woodmark Advisors in Greenville, South Carolina.

“My suggestions would be to really buckle down for a short period, maybe six to 12 months, and get aggressive about cleaning this up,” he says.

Canceling all non-essential subscriptions and memberships is a good place to start, he adds.

“This doesn’t have to be a forever lifestyle. It’s about making short-term sacrifices now to create long-term flexibility later,” Milks says.

With a basic emergency fund taken care of, high-interest debt can be a higher priority, Telibasa says. He says if the interest rate is in the double digits — which is common with credit card debt — then you’ll want to prioritize paying it off as soon as possible.

“The whole idea is opportunity cost. Do we feel we could earn more than the interest rate if we put these funds elsewhere, like a 401(k) plan or a Roth IRA or a savings account?” he asks.

If the interest is in the double digits, then the answer is probably not.

While the idea of  bringing in more income can be daunting, Vernace says it’s sometimes a relatively easy lift. One of her clients babysits dogs while she’s working at home, which is work she enjoys, and brings in extra cash.

Vernace suggests looking for side jobs that allow you to retain control of your schedule, such as those you can do from home.

“It can take you from a tight situation to one that’s comfortable and give you more breathing room,” she says.

Establishing new saving and spending patterns can be a “learning opportunity,” Milks says.

“You can take it as a wake-up call and make lasting changes to avoid falling into the same trap again,” he adds.