The royal family also sold the queen's helicopter, freeing up more money.
The Royal Train, which costs more than $75,000 every time someone travels in it, is now used only by the queen and the duke of Edinburgh, and Prince Charles and his wife, the duchess of Cornwall.
The palace's budget has been slashed in other places, too. The queen's furnishings budget went from $607,080 to $455,310.
The budget for staff uniforms has been cut from $303,540 to $151,770. Even the amount the queen spends on computers has dropped from $607,080 to $303,540.
Most cash-strapped homeowners can only dream of the $22 million budget the queen is given to run her households. Still, royal watchers said, the belt-tightening is significant.
"You don't really realize that the queen is going around Buckingham Palace turning off the lights, having fewer staff and in the winter turning the heating down," Seward said Monday. "She sometimes even writes letters in her very old fur coat."
Those letters are written on stationery that cost $455,310 this year. The queen can't resist some other royal flourishes. She shelled out $151,770 for carriage processions and about $1 million on garden parties.
To help pay for all that, the queen pulled $9 million out of her reserve fund. Experts said that if she continues to do that, she'll be broke by 2012, the year she should be celebrating her 60th year on the throne.
There may be no money left to throw a party that's fit for a queen.