Spend Less Money With These Easy Steps Write an image caption

Spending money is easy. Smart spending is hard. We might think about how we can spend less, but when do we really make these lifestyle changes?

If your answer had something like “New Year’s Resolution” in it, we are off to a terrible start.

A big issue with spending is that instead of identifying how we can cut back, we tend to think about how much more money we can make.

While maximizing income is great, it’s just one side of the puzzle. Great businesses don’t just think about how much more revenue they can generate, but where they can curtail spending.

You and I face the same money problems as businesses, just on a smaller scale.

The median household income in 2020 was $67,521 (1). Compare this to the average consumer spending for an individual in 2019, $38,266 per year (2). After taxes and a slew of other complicated financial variables, that’s not a lot of income leftover for the average person.

Earning more income is a lot more difficult than cutting back on spending. American culture in particular is often materialistic and centered around wants over needs. That’s bad news for our bank accounts.

Here are some simple yet great ways you can cut back on spending, giving you far more financial freedom to enjoy things in life.

Track Your Spending

This requires almost no effort on your end.

Tracking your spending doesn’t require a detailed Excel spreadsheet that you update daily. If you do something like this, all the power to you.

The main reason we spend so much is because we often just don’t pay attention to how spending accumulates.

Dining out every single night might only cost you $20 a night. But over the course of a week this puts you at $140, which is a number you most certainly WOULD pay attention to.

Tracking your spending allows you to be mindful of every purchase. This helps to mitigate spending accumulating until it’s worth your attention. Every purchase is worth your attention.

There are many great apps and websites out in the wild to help you manage your spending. I personally enjoy NerdWallet. They offer a plethora of personal finance solutions and products, and their app and basic services are free.

You can use their app to track your monthly expenditures, cash flow, and investments across most account types.

TrueBill is another fantastic app that allows you to track and cancel recurring subscriptions. This is yet another example of how small expenditures can accumulate.

You might just simply be unaware of a subscription (or multiple), and are getting monthly charges that aren’t on your radar.

Again, take advantage of these tools to empower your personal finances. This shouldn’t require too much effort.

Save on Simple Things

I’m a person who believes cheaper is almost always better.

Really think about everything you own and their cheaper alternatives.

The best example is clothing. Is buying more expensive, brand name clothes truly worth the 40% or more price markup? I would argue almost never.

Again, that’s just me. But you can really curtail your spending

You don’t need that Gucci sweater or Supreme polo shirt.

Now apply this principle to everything you buy. Ask yourself if you really need this brand name item and if it’s worth the price markup.

I find that cheaper items are almost as reliable and durable as more expensive things. Almost.

But certainly worth the difference in price.

Another quick tip is the five day rule. If you find yourself wanting to buy something, wait five days. Yes, it can wait.

If after five days you still want to buy it, great. Go right ahead.

I can pretty much guarantee that you will not buy more than half the things you want if you apply this rule.

Don’t get me wrong, I love new and shiny things. But only buy the new and shiny things that you truly want. Five days can make all the difference in testing your desire.

Plan Around Your Paydays

I think we all undoubtedly know when and how much we get paid. Use this knowledge to your advantage.

Plan your spending around your paychecks. This ultimately has to do with cash flow.

Using a credit card can be a trap into thinking that money is intangible. Credit cards often give the feeling that money is like Monopoly money and is something we don’t really have to worry about.

Until we have to pay our bills.

Credit card usage can be a slippery slope with cash flow. The basic principle of cash flow is that you want more money coming in than going out. And when you have more money going out (spending), you better have everything all planned out.

Going into debt is a great example. Unfortunately, debt is extremely easy to fall into provided predatory lending, confusing terms, extremely long repayment periods, and a whole host of messy and frustrating caveats.

Plan your spending and credit utilization around your paydays. Use your paychecks as barometers and barriers.

Don’t spend more than you bring in. Sounds simple, but a lot of us fail at this.

A funny and great strategy a lot of people I know use is the “boring paycheck, fun paycheck” idea.

If you get paid on a bi-weekly basis, your first paycheck should be your boring paycheck. Pay for everything you need like rent, utilities, groceries, and general bills that you know need to get paid.

Use your second paycheck as the “fun” paycheck. Within reason of course.

I can promise you this simple strategy will help you become far more in touch with your finances and save money. Every penny counts.

Live Your Life

I’m not writing this to tell you not to enjoy life and spend your money. I’m actually trying to help you control your finances which will allow you to spend more on things you like and want.

If you cut back on spending that’s unnecessary and on things that really don’t bring you more happiness, you will find so much more freedom to spend on things that are worth it to you.

Implement these simple tips and not only will you have more freedom to live your life, but you will reduce financial stress and burdens that might be hanging over you.

Control your spending to allow you to spend more on what you love.