How to Spend Less Money: A Comprehensive Guide

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Meet Li. Li works a full-time job, works two side hustles, and is dead broke. 

That’s because Li spends money as fast as it comes in on expensive dinners, weekend getaways, fancy clothes, and treating friends and family.

There’s no easy way around it, but if you want to avoid winding up in Li’s situation and have money in your bank account, you need to get a grip on spending. 

Here’s how to spend less money so you can improve your personal finance situation and meet your long-term financial goals. 

Top ways to save money

  1. Use budgeting apps
  2. Lock your credit cards
  3. Set savings goals
  4. Utilize thrift stores
  5. Use coupons
  6. Buy in bulk from Costco
  7. Get a fixed mortgage
  8. Reduce your streaming services
  9. Stop paying for music
  10. Eat leftovers
  11. Reconsider your gym membership
  12. Sell your car
  13. Move to a tax-friendly state
  14. Buy grocery store brands
  15. Have potluck dinners
  16. Cut your cell phone bill
  17. Lower your cable bill
  18. Use the library
  19. Downsize
  20. Take staycations
  21. Couchsurf when traveling
  22. Frequent bars less
  23. Repurpose items
  24. Look for cheaper insurance
  25. Do your own home repairs
  26. Take care of yourself
  27. Take up cheap hobbies
  28. Turn off the lights
  29. Practice cost-efficient driving habits

1. Use budgeting apps

It’s impossible to reduce spending if you don’t have a clear understanding of where your money goes on a monthly basis. 

One simple way to get a grip on your finances is by using budgeting apps to limit how much money flows out of your account into things like car insurance, student loans, and grocery shopping. Some of the best budgeting apps include You Need a Budget and Personal Capital.

Of course, you can always make your own budget using a regular Excel spreadsheet or by downloading a template online. Find a strategy that works for you and stick to it, and you’ll do just fine.

The biggest thing to remember when budgeting is that needs and situations change. That being the case, it’s important to recalibrate from time to time.

Learn more:

2. Lock your credit cards

Consumers often have multiple credit cards on hand to maximize credit and cash rewards. The problem is that the more credit cards you have, the easier it is to overspend and go beyond your limits, racking up significant credit card debt along the way.

Consider locking your credit cards and only having one or two open. This way, you won’t put money on cards and wind up racking up larger balances than you can afford to pay off. 

Unlocking a credit card is easy; oftentimes, you can do it by calling customer service or downloading a mobile app. 

Disclaimer: Before locking your cards, you may want to do some research to see what impact, if any, it could have on your credit score.

3. Set savings goals

It’s a good idea to sit down and set some specific savings goals. For example, you might make it a point to reach $5,000 in your bank account, and then $10,000, $20,000, and so on. 

By creating savings goals and setting expectations for yourself, you’ll naturally think twice before spending recklessly. For example, suppose you want to go out to dinner because you’re too lazy to cook. You may think about your savings goals, remind yourself that you’re trying to save money, and decide to cook a healthy, low-cost meal at home instead. 

PRO TIP: Go out and spend money on spices like garlic, chili powder, and cumin. You can learn to make restaurant-quality meals at a fraction of the price.

4. Utilize thrift stores 

If you’re trying to save money, it’s vital to stay away from expensive designer clothes and learn to love discount racks, secondhand clothes, and thrift stores. 

Shop at thrift stores when you need to load up on new shirts, and you’ll be surprised at the nice dress clothes and cool vintage items you can find. 

When you’re tired of your current clothes, sell them to thrift stores for money or store credit to buy new clothes.

You can also pick up cheap clothes at the thrift store and sell them online to make more money as a side hustle on sites like eBay.

5. Use coupons

One of the best ways to save money on food and household items is to use coupons. 

Chances are you get coupon books in the mail often, advertising items like dish soap, discount chicken and beef, and laundry detergent. It’s time to put these coupons to use and avoid overspending! 

You can also check out a site like Rakuten, where you can get cash back on everyday items. 

6. Buy in bulk from Costco

Another way to save money is to spend $60 on an annual Costco membership and buy items in bulk every month.

You’ll save money buying items like family-sized jars of peanut butter and olives, bread and meat that you can freeze, and household snacks like mixed nuts and cookies. 

Buying in bulk may seem counterintuitive, but you can actually save a lot of money this way. Most people buy staples in bulk and then supplement smaller items from the grocery store throughout the month.

7. Get a fixed mortgage

It’s very hard to budget and save money when your rent goes up every month and your housing expenses are unpredictable.

Consider breaking the renting cycle and getting a house of your own if you can afford it. Try to get a fixed mortgage so that your “rent” stays the same price every month.

Learn more:

8. Reduce your streaming services 

If you love movies, chances are you have multiple streaming services—Hulu, Netflix, or Prime Video. You can probably cancel one or two of these services and focus on one at a time to save money.

If you aren’t sure how many streaming services you have, consider a site like Truebill or Trim. These services link to your bank accounts and either negotiate subscription services for lower prices or cancel them altogether, reducing waste. 

9. Stop paying for music 

While you’re cutting your streaming video costs, it’s also a good idea to cut down on your music consumption. Take a look at your music streaming services and consider getting rid of services like Google Play or Amazon Music. You can probably save between $10 and $20 per month this way. 

If you want to listen to music, consider using a service like Music Xray and getting paid for listening to music. Of course, you can always listen to the radio. 

An even better idea is to get a cheap guitar, round up your kin, and spend some time singing around the campfire, making and enjoying music the old-fashioned way.

10. Eat leftovers

Few things are worse than throwing out perfectly good food just because you don’t want to eat it two nights in a row.

If you get bored with food and can’t bear the thought of eating the same thing the following night, put it in the freezer and eat it later in the week or on a night when you just don’t feel like cooking. When reheated properly, food can be just as good—if not better—at a later date.

It’s also not a bad idea to get used to cooking more and dining out less. Try to cut your monthly food bill in half this way. If you eat out multiple times per week, you’re probably spending too much on food. 

11. Reconsider your gym membership 

Think about the last time you actually went to the gym and put in a good workout. If you’re scratching your head at this, then you may want to reconsider the $20 or $30 that you’re spending each month. 

There are countless ways to exercise without going to the gym. Run around your neighborhood or the woods, do push-ups, start a yoga or pilates routine, or get a pullup bar or free weights. 

You’ll also save hours each week by not going to the gym, giving you more time to exercise or make money.

12. Sell your car 

Cars are money pits. They require auto loan payments, maintenance and repairs, gas, cleaning, insurance, and parking, among other things. 

If you work from home and live in a place with public transportation and rideshare services like Uber and Lyft, you can probably get around to the grocery store and post office without a car.

13. Move to a tax-friendly state

Those who really want to spend less money over time should consider moving to a state with lower taxes. If you live in a state like California or New York, then you’re most likely paying well above the national average. Alaska, Nevada, Florida, New Hampshire, South Dakota, Tennessee, Texas, Wyoming, and Washington are all states that don’t have income tax at the time of writing.

Of course, you can’t get around paying federal taxes. But you can reduce what you owe at the state level for substantial savings.

14. Buy grocery store brands

It’s understandable to love brands like Oreos, Cheez-Its, and Ben & Jerry’s. But the truth is that you’re paying more for the brand name with these items. Oftentimes, store brands taste identical, and they’re usually a lot cheaper.

If you have a hard time with this approach, buy some plastic containers and ditch the box when you get home. Once the product is separated from the packaging, it’ll be easier to live with taking the cheaper route.

15. Have potluck dinners 

If you have a big friend group, suggest having potluck dinners every once in a while. Have everyone contribute a dish and you can all feast and eat like kings and queens for a fraction of the price.

Take turns hosting and let the host keep leftovers for further cost savings. Otherwise, you can prepare doggie bags to help everyone save money. Potluck dinners can be a lot of fun, and they can introduce you to new flavors and experiences. 

16. Cut your cell phone bill

Consider talking to your mobile provider about ways to slash your cell phone bill. 

Maybe you’re paying too much per month for data when you aren’t coming close to meeting your quota. Or maybe you need to switch service plans altogether or get a different device. 

17. Lower your cable bill

While you’re lowering your cell phone bill, you should probably look into ditching your cable bill as well. Chances are you’re paying too much for television and internet (and maybe even an old-school phone line).

Here’s a wild idea: Consider ditching your home Wi-Fi service, if you can afford to do so. If you have a cell phone and work in a place with Wi-Fi, you may not need home internet. This can save you some money each month.

18. Use the library 

There’s really no reason to buy books or media on Amazon when you can just as easily visit your local library for a virtually unlimited selection of items. 

The thing to remember about libraries is that you pay for them with your tax dollars. So, if you don’t frequent your local library, you’re literally flushing money down the drain. 

Going to the library is fun and enjoyable, and it can save you money over time. 

19. Downsize 

People often pay far too much for housing, leaving little left over for saving and investing.

The general rule is to keep your mortgage payment below 28% of your pretax income. If you’re paying more than 28% each month, then it’s a good idea to get a more affordable place or get a roommate to make ends meet. 

20. Take staycations

Just because you take vacations doesn’t mean you have to pile on debt traveling around the country or the world. 

It’s possible to save money taking staycations without spending a dime. You can spend the week relaxing by a local pool, hiking around your woods, and staying up late watching movies and relaxing. 

Staycations can be cheap and fun, and they won’t leave you in debt for the remainder of the year. It’s something to consider the next time you take off from work.

21. Couchsurf when traveling 

For those who prefer to travel, there is the Couchsurfing network. This is a global community of people who open their homes for people to crash for free. You can meet all sorts of interesting people while couchsurfing, and you can save money along the way. 

22.  Frequent bars less

Going out drinking at bars can be fun when you’re in your twenties and thirties, but it can also be very expensive. The truth is you can have just as much fun throwing back some cold ones with friends in the backyard.

As an added bonus, you won’t have to worry about driving when you stay in or crash at a friend’s house. So you can have more fun, save money, and spend less on an Uber or Lyft. 

23. Repurpose items

You can have fun repurposing items for use around the house. Mason jars can make chic drinking glasses and storage items. Milk crates can get turned into bookshelves. And old clothes can make great rags. 

Get creative. There’s no telling what ideas you’ll come up with.

24. Look for cheaper insurance

Take a hard look at your auto, health, and homeowner’s insurance. Chances are you could be paying too much for all of these services.

Shop around and try to find better rates. You can potentially save hundreds. 

Just remember that, in some cases, it can be worth paying more for better coverage. Having minimal insurance can be risky. But you can potentially get great coverage and save money at the same time. 

Certain auto insurance companies have safe driver incentives that you can use to keep more of your hard-earned cash.

As a tip, look into getting life insurance while you’re young and healthy so that your premiums are lower.

25. Do your own home repairs 

If you own a home, things are going to go wrong. Walls will need to be painted, windows will need to be repaired, and so on. If you start calling a maintenance team every time something goes wrong, you’ll start spending a lot more money than you have to. 

Instead, watch YouTube videos to learn how to do your own home repairs. It can take some time and practice—and many trips to the Home Depot or Lowe’s—but being handy around the house is one of the best money-saving skills you can have. 

Start small by learning how to caulk and paint. Then move up to larger projects like drywall and reflooring.

26. Take care of yourself 

Mind your health and try to avoid damaging habits. The more you take care of yourself when you’re young, the less money you’ll spend on healthcare as you get older.

It’s also a good idea to set money aside for health while you’re young and let it grow in case you develop any costly conditions or maladies in your later years. If you’re eligible, look into setting money aside in a health savings account (HSA). 

27. Take up cheap hobbies

Think about taking up some cheap hobbies that won’t drain your bank account in your spare time—like reading, drawing, painting, or hiking. 

You don’t have to spend a lot of money to have a great time and the more you do these activities, the better you’ll get. Other ideas include knitting, baking, and meditating. 

28. Turn off the lights 

People often lose a lot of money because they leave lights on around the house. These costs can add up quickly, jacking up the price of your electricity bill at the end of the month. 

Always practice hitting the lights when you’re not using them, and look into getting candles for nighttime if you really want to save money. You should also invest in energy-efficient bulbs. 

29. Practice cost-efficient driving habits 

There are little things you can do to save money behind the wheel. For example, try to reduce unnecessary braking to save money on gas. If you accelerate lighter, you can also avoid burning gas, too.

You should also keep your tires inflated and minimize trips when possible to reduce fuel consumption and save the planet.

Frequently Asked Questions 

Can budgeting help you spend less money?

Budgeting is a great way to spend less money on unnecessary things. Budgeting is a way of prioritizing spending and putting every dollar to work. When you budget, you actively eliminate waste and make sure the majority of your funds are going towards useful areas like bills, savings, and investment accounts.

Is spending money bad?

It largely depends on your priorities and what you’re trying to accomplish. 

If you work hard for your money, you should be able to spend it and enjoy it to some extent. But if you spend all of it and regularly make impulse purchases, you will wind up in a tough situation.

The trick is to work towards financial independence and a state of financial freedom. The more you save and the less you spend, the further your money will grow. If you aggressively save and only spend money when you absolutely have to, you can potentially retire earlier and live the life of your dreams.

Impulse buys are fun. But saving money is more fun in the long term. 

What is an emergency fund?

An emergency fund is a savings account that’s meant to cover unexpected financial emergencies. For example, an emergency fund can protect you against short-term challenges like job loss, illness, or unexpected household bills. 

Should I get a financial advisor?

Some people can benefit from a financial advisor. If you’re in a financial rut and need guidance or just starting out, it can help to have some support. But advisors can be expensive, and it’s better to learn on your own and become financially independent. 

At the end of the day, you shouldn’t need to pay someone to manage your finances. Anyone can learn how money works and have control over their own destinies.

The Bottom Line

Only you can decide if you’re spending too much money. Form a budget and look for areas where you may be spending too much. 

With a little bit of budgeting, you can put extra money back into your account and have more cash to play around with. 

There are countless ways to save money, ranging from slashing expenses around the house to shopping around for better insurance. Spend some time thinking of ways to reduce money and take action. 

Take my word for it: You’ll be better off spending less. Your future self is already thanking you.

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