It’s a smart financial move to try and spend less, while saving more. If you can cut down your expenses, you’ll end up with more money at the end of each month; not only will this alleviate the pressure of living paycheck to paycheck and covering your most important expenses, it will also set you up to create an emergency fund and invest for long-term growth.
The problem is, spending has become second nature to most of us. We spend money without really thinking about it, and we end up overspending in areas we don’t even realize. Fortunately, there are some powerful habits that can help you spend less.
Important Habit Changes to Spend Less
Try incorporating these habits to spend less overall.
1. Keep an eye on your checking account balance. Debit cards are one of the most convenient forms of payment available to consumers, but they have a small drawback; it’s hard to gauge how much you’re spending overall. To counteract this, keep a close eye on your checking account balance. Review your banking information at the end of each day, and get a sense for what you’re truly spending.
2. Stop using your credit card entirely. Credit cards are convenient like debit cards, but they function completely differently. A debit card allows you to make purchases with your own money, but a credit card allows you to borrow money, paying interest on your purchase. Avoid using your credit card whenever possible, to limit the amount of interest you pay.
3. Use cash when you can. Spending cash has a different psychological impact than using a plastic card. People tend to spend less when they’re forced to use cash, so consider using cash for your purchases more often.
4. Disable auto-payments on subscriptions. Most subscriptions auto-renew, charging you automatically. This is convenient, but it can make you spend more money than you realize for services you may not even be using. Force yourself to acknowledge these payments, and limit them where you can.
5. Buy in bulk. In many cases, buying in bulk can save you a ton of money per item. Goods that don’t expire, like paper towels, toilet paper, and canned goods are all much less expensive on a per-item basis when purchased collectively.
6. Cook at home. Going out to eat can be fun, but it’s also an expensive lifestyle choice when done routinely. Buy your own groceries and cook your own food whenever possible. Each meal you replace can save you $10, $20, or even more. As an added bonus, the meals you cook for yourself will likely be healthier than what you get at a restaurant, and as you improve as a cook, eventually, they may even taste better.
7. Take public transportation. Your personal vehicle may be a convenient way to get from place to place, but it’s also expensive. If you live in an area with a good public transportation option, consider using that instead; taking public transportation can save you money not just on your vehicle, but also on gas, insurance, maintenance, and other creeping expenses you might not otherwise consider.
8. Limit the frequency of indulgences. Everyone likes to indulge themselves on occasion, going out for drinks or taking the family to the movies. These indulgences aren’t problematic, as long as they’re exercised in moderation. One of the best things you can do is limit their frequency; instead of indulging yourself three times a week, cut back to once a week, and see how much you can save.
9. Wait before buying something big. If you’re going to buy something that costs more than $50, give yourself a day to think about it. This “waiting period” will help you resist impulse purchases, and give you more time to consider alternative options.
10. Pay yourself first. Whenever you get paid, consider paying “yourself” first. Take a specific amount of money that you want to save and move it to a different account. This way, you’ll be forced to make all your purchases with a smaller amount of money.
Major Lifestyle Changes
If these habits aren’t enough to help you save more money each month, you may be in need of some bigger lifestyle changes. For example, is it possible for you to move to a cheaper area of the city, or to downgrade the size of your home? Major moves like these can often save you hundreds, or even thousands of dollars each month.
Beyond that, consider picking up a side gig or another part-time job to supplement your income. With cut expenses and a higher income level, it will be much easier to squirrel away extra money at the end of each month.