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How to spend less money: 8 tips WITHOUT drastically changing your lifestyle

by Rob Bertman, CFA®, CFP® in Budgeting
February 19, 2022
how to spend less money

How to spend less money: 8 tips WITHOUT drastically changing your lifestyle

Everyone is talking about inflation today.

The Bureau of Labor Statistics stated that inflation rose at 7.5% for the 12 months ending January 2022, higher than the historical average of 3%. The biggest drivers were food, shelter and electricity. 

Though you can get better on how much you spend on groceries, these are mostly things that are hard to mitigate because they affect pretty much everyone.

That being said, there are ways to spend less money overall so that you don’t feel as big of an effect with inflation rearing its ugly head.

Why should I spend less money?

The top predictor of financial success and financial freedom is the ability to have extra money left over at the end of the month.

Without it, you can’t do things like pay off debt, invest for the future, and save up for your major financial goals.

When you have money in your bank account (like an emergency fund)t, you can avoid credit card debt, monthly payment, and financial stress in general. 

Plus, if you want to get on the same page with money, it’s a lot easier when you’re not having to juggle your bills and live paycheck-to-paycheck.

All in all, spending less money solves a lot of problems.

How can I train myself to spend less money?

Believe it or not, you don’t have to learn how to stop spending money altogether, dramatically change your spending habits, and never have a single impulse buy.

There are plenty of ways to spend less money without drastic changes and switching from credit to debit cards.

My favorite tip is…

The easiest way to spend less money – Count your daily transactions

count your transactions

The average family I work with has 5-6 transactions per day which ends up being “death by 1,000 cuts” when it comes to overspending.

The more often we spend, the more opportunities we have to overspend, so the simplest way to save money is by counting our transactions.

This tip was one that caught the attention of KDKA, the local CBS channel in Pittsburgh when I was interviewed for their segment Living with Inflation.

Rather than worrying about the dollar amount spent and keeping track of that, families who can lower their daily transactions from 5 to 4 will automatically see a decrease in their monthly spending.

Other ways to spend less money

Aside from counting how often you spend money, there are plenty of other ways to cut your spending without having to upend your lifestyle.

Cancel unused subscriptions

cancel unused subscriptions

We are certainly in the subscription economy!

Everything is a monthly fee and it’s actually causing us to spend more money instead of less.

For example, cutting the cord doesn’t really save much if you have Netflix, Prime Video, HBO Max, Hulu, Disney+, Peacock, Paramount…

People often forget that you can cancel these…and then rejoin later. They will always take you back 🙂 But there’s no reason to spend if you haven’t watched them over the last month.

Aside from streaming services, you can look at gym memberships this way too.

Review your cell phone bill

Your cell phone bill should include your cellular charge and your data plan.

But it also includes other things like an insurance plan or a fee to upgrade early for each person on the plan.

By eliminating these excess services per line, you can save tens or maybe even hundreds of dollars depending on how many lines you have.

Keep a list for food shopping

The easiest way to spend less money at grocery stores is to keep a list.

This list will make sure you don’t buy more than you need and will also make sure you get everything during your trip. This will avoid extra trips which leads to extra impulse shopping.

Track your spending

The key metric and habit if you want to spend less money over the long term and have more money at the end of the month is to track your spending.

Simply review your transactions for the week and check how much has come in and how much has gone out.

Don’t worry about complex categorization. Just keep it simple and spend 5 minutes a week tracking your spending either in your savings account or checking account or by using a budgeting app.

Use extra cash to pay of high interest rate debt

high interest debt

Yes, interest paid on debt is an expense that you can cut.

I often see money in the bank with credit card debt alongside it.

Start by prioritizing paying off debt with low balances and high interest rates.

Every $1,000 you use to pay down credit card debt could save you $20 in interest PER MONTH!

Unsubscribe from promotional emails

Store emails have gotten really good at customizing their content directly to you based upon what you bought previously.

Guess what? You don’t need to know about promotions unless you were planning to buy something.

There are ALWAYS promotions and store sales available, but these emails are a trigger for us to spend more money.

Unsubscribe! You know your favorite stores and can browse their website when you are truly ready to buy something.

Focus on the spending not the savings

on sale

Do you ever think to yourself, “I’m getting 5% cash back by using this card!” or “Wow! There’s a 20% sale right now!”

Instead of looking at the savings, focus on the spending.

Think about it, using a 5% card on Amazon or Target saves you $1 per $20 that you spend.

Don’t let that $1 “savings” entice you to spend another $19. It’s fool’s gold.

Spend less money without up-ending your life

There are plenty of ways to save more money easily without having to sell your car, move, or live on low cost groceries.

The most impactful for my clients has been counting their daily transactions on their fingers, but be sure to pick the one that will work best for you.

Try one or two on to see what works best for you. 

Use this high inflation time to hone your budgeting skills, drive you to improve your spending habits, and get better with your personal finances.

If you need more help, I’d be happy to have a 30 minute call with you.

If you want more tips but don’t want to talk,