Trying to figure out how to spend less money is almost as much fun as getting a colonoscopy.
Unfortunately, things like growing credit card debt, needing an emergency fund and trying to secure your family’s financial future demand that we find ways to spend less money and have extra cash left over at the end of each month.
“Did you just say extra cash? What in all of sweet Eden is that?” you might ask.
How to Spend Less Money
As rare as the unicorn nowadays, what with growing inflation, extra cash is the difference between living paycheck-to-paycheck and actually having money to cover all your monthly expenses and still do things like clear off some of that credit card debt and invest. Can it be done? Yes. People have done. Regular people too!
Is it easy to do? Goodness no! But you can train yourself.
Believe it or not, getting a hold of your personal finances and spending habits doesn’t always call for dramatic changes to your lifestyle.
All it takes is making little changes here and there that eventually add up to a reasonable amount and extra money at the end of the month.
Here are some tips on how to spend less money that have worked for me.
1. Reduce the Number of Transactions
Instead of starting by putting your family on a tight budget right off the bat, a gradual way of easing your way into spending less is by counting how many transactions you have on an average day and reducing that by one or two.
It’s a mental trick that works in several ways:
- It reduces how many times you have to pay for something, reducing your overall workload or to-do list
- Whatever you cut out can translate to money saved
- You save on any associated transaction fees
Do an audit of how often you pay for something on any given day. If you make 6–8 transactions on most days, find ways to reduce that to 4-6 instead. In doing so, you will find ways to inadvertently save money.
2. Budget
Yeah, I know! It s&%ks, but there’s no escaping it. The best way to learn where all your money is going is to actually look at where all your money IS going and then make plans to use it better. That’s budgeting. It’s the foundation of sound money management.
Here’s a comprehensive guide on how to get started on budgeting for your family.
3. Evaluate Your Subscriptions
I’ll say it again and again: You don’t need to be subscribed to all those services.
Off the top of your head, how many subscriptions are you paying for now monthly? Most households have the following:
- Netflix
- Hulu
- Paramount
- Disney +
- Prime Video
And that’s just in terms of entertainment. How many times a month do any of you watch anything from these streaming services?
Run a quick audit on everything you subscribe to and cancel anything you haven’t used over the last month. You can always re-subscribe if you find that your life is unbearable without it. They’ll take you back!
4. Meal Plan
You’ll be surprised at how much money goes into takeout over 30 days. You can dramatically cut down on this expense by meal planning.
The issue is that most people equate meal planning with a diet, and most people associate diets with distasteful food or suffering. Meal planning simply means that you are planning ahead for what your family will eat during the week or month.
While eating out can bust your budget, you do need to be mindful of saving money in the grocery store. According to the USDA, the average monthly grocery bill for a couple with two young children is $856, which is a lot. I know lots of people who go way over that, but see my tips for sticking to a grocery budget to lower your monthly food bill.
It helps with grocery shopping; it cuts down on trips to the grocery store and grocery bills, which reduces the number of transactions and saves you money.
5. Consolidate Debt
A practical and painless way to save money is to consolidate your debt and pay off the high-interest credit cards first. The interest you pay on these cards is money you can channel toward your savings account instead.
- Start by getting your credit score or credit report to get a good picture of where you are and what you owe.
- Look at the best credit cards on the market with low-interest rates.
- Look at the credit cards you have right now.
- Pay off the high-interest one or transfer that debt to low-interest credit cards and do away with the high-interest ones.
- Pay off the transferred debt using the extra money from the high-interest savings.
This way, you save money and avoid late fees while building up your credit score. Trust me; you won’t miss that high-interest credit card one bit.
Also See: Best Way to Consolidate Debt Without Hurting Credit
6. Buy in Bulk
Having a financial goal doesn’t mean saving every last penny and foregoing most of your living expenses. It just means finding ways to work around those expenses while saving some money.
Buying in bulk whenever possible is an excellent way to do that and still get what you want. Economies of scale dictate that you get more value for your money when you buy in bulk.
7. Try an All-Cash System
Not many people use or accept cash anymore, thanks to the pandemic. However, instilling an all-cash system is a good way to get yourself to consciously spend less.
The trick is to limit how much cash you can use in a day. Say $50. Once it’s all spent, you have to go home and wait for tomorrow’s portion. You will quickly find many things you used to spend money on that you really don’t need.
Learning how to spend less money without feeling the pain is a gradual process. These tricks will help ease you into it. What are some of the tricks you use?