This article is for anyone interested in personal finance, budgeting, and money-saving. You will soon learn how to cut down on spending and how to manage your personal finances to have more money in your account.
Take Control of Your Finances
Are you spending more money than you want or can afford? Don’t worry, you are not the only one… We’ve all been there!
Most people live paycheck to paycheck for a wide variety of reasons. There are systemic systems in place that also contribute to this, but in this article, we’re going to focus on what we can control.
To improve our financial health, it’s not always just about improving our income, but more importantly, we need to improve the way we save money and budget for expenses.
Figuring out how to cut down on spending isn’t always as easy as it sounds, because who wants to stop buying things they love?
Breaking long-held habits can seem painful, but if you learn how to manage and control those habits, you can very quickly improve your financial situation.
Best Ways to Cut Down on Spending
1. Learn how to Budget
While living on a budget doesn’t sound fun, it’s a necessary place to start if you want to regain control of your finances. There are different approaches to budgeting, but my personal favorite is zero-based budgeting.
It means that, at the end of the month, your budget should end at $0. It’s literally your responsibility to give every dollar a job.
Feel free to check my article about Zero-Based Budgeting for Beginners here.
Creating a budget is important as it allows you to determine in advance whether you will have enough money to do the things that you need or would like to do.
If you learn how to budget efficiently, you will always have enough money to pay your fixed expenses and things that you want to do or buy for yourself.
2. Literally Freeze your Credit Cards in the Freezer
Credit cards are tempting. If you are that person that reaches for their credit card easily without giving it much thought, then yes, you need to put it away.
Of course, you may not be able to completely get rid of it, but if you freeze your credit card in a literal block of ice, you will have to wait until it melts (you can’t microwave it!) before you are able to use it.
This will give you some time to reconsider your purchase, possibly saving your valuable and hard-earned money.
3. Have No-Spend Days
One of the great ways to cut down on spending is to simply decide that you won’t spend any money on one particular day a week.
For example, if you make sure that all your fixed expenses are taken care of, and you have already bought your food for the whole week, then you will realize that it’s actually nice not to think about purchasing anything for that one day a week.
If this is too difficult for you, you can try to keep a spare $20 in cash for things you might run out of (eg. while you are cooking), but that doesn’t mean you have to spend this $20 on your no-spend day.
It’s nice to see if you can keep that emergency cash until the next week’s no-spend day.
If you’re just starting out on your journey, check out my Beginner’s Budget Dashboard. It’s a Google Sheets template that tracks your expenses, income, investments, savings, and more!
There’s even a free video tutorial to help you get started.
4. Avoid Shopping when you are Hungry
This is the one people often struggle with. Grocery shopping when you are hungry makes you want to buy everything.
Now, some foods can be frozen and saved for later and some foods are dry foods so you can keep them for a long time too, but very often we tend to buy products with a certain expiry date that we simply aren’t able to eat on time.
Throwing away food is wasteful, and being mindful about how much food you need on a weekly basis is something that can save you a lot of money in a long time.
5. Unsubscribe from (some) Email Newsletters
Signing up for email offers from your favorite brands or online stores can be amazing because you are often notified about special offers and promotions, BUT this is also encouraging you to spend money you don’t necessarily need to.
All the promotional offers are simply there to make you buy something. It’s important to ask yourself, what serves your goals best?
Do you really need extra mascara that costs $30 or do you prefer to put that money aside and add it to your emergency fund or savings account?
6. Remove your Credit Cards from Online Accounts
It’s so easy to click ‘pay now’ and just get that order from Amazon, right?
Now, if your card details are not saved, and you actually have to reach and get that card, chances are that you will change your mind because it’s inconvenient to enter your card details every single time you buy something.
If you currently store your credit cards on your online accounts to make your checkout easier, this is the universe’s sign to remove them. Do it right now so you don’t forget!
7. Cancel Subscriptions You No Longer Use
If you have a gym membership but you recently switched to running and working out in the park, just cancel that membership. There is no point paying each month for something you use once every two months.
The same goes for magazines. If you notice that you spend more time reading blogs and online magazines, there is no need for you to pay for an actual magazine subscription.
Keep an eye out for subscription duplications as well. If you have Spotify, there’s no real business case to have Apple Music as well.
8. Set Spending Limits on your Account
Some banks offer their customers an option to set a spending limit per day/week.
For example, you may not be able to withdraw more than $200 a day, or you can set a limit to no more than $50 for contactless payments. Contactless is easy, you just tap it, and boom, it’s paid. That can easily add up!
Lunch here, shopping there, Starbucks before going to work, and the tiny purchases just go on and on.
Set a spending limit on your card to cut down on unconscious spending and to be sure you have enough money at the end of the month.
9. Have Drinks and Dinners at Home
You work hard for your money and you should be able to enjoy what you have achieved! Who doesn’t want to have fun once in a while?
However, everything in life should be done in moderation and spending money is no different. Because everything tends to be more expensive at night, try to invite your friends over more often and have drinks at your place.
It’s significantly cheaper to buy good wine and food at the grocery store than it is to buy food and drinks at a fancy restaurant or bar.
Hosting gatherings at your house ensures that you are able to still have fun with your friends while being conscious of your budget.
10. Cook Double Portions and Use the Leftovers for Next Day’s Lunch
If you tend to spend $10-15 a day for takeaway lunch, maybe it’s time to cook bigger portions and save some of the dinner leftovers for lunch? If you think this may be a hard habit to change, start smaller.
Treat yourself to a takeaway lunch once or twice a week, and bring your own food those other days.
Just think that you will still save around $30 a week and who knows, perhaps cooking will become a new passion and you will completely forget about buying takeaway meals!
11. Research and Plan Free Activities
Cutting down on spending does not mean that you have to deprive yourself of all the fun things in life. There are so many different and free ways to enjoy yourself on a day off.
Do a little research and you will quickly notice that there are plenty of free activities, exhibitions, or even street concerts that you can attend in your city or area.
Cutting down on spending is a process. You need to unlearn bad habits and build more productive, new ones that align with your financial goals.
Sit down for 10 minutes and write down your fixed expenses, your priorities, and things you would love to have if you had more money.
Then, figure out a budget that will allow you to do those things while still having at least 10% of your income left over for saving or investing.
Because the truth is, you probably can afford much more than you think if you stop spending so much unconsciously or on unnecessary stuff.
Do you have any other tips on how to cut down on spending? Feel free to share them in the comments below!