Learning how to spend less money can be hard. This is especially true with all of the small habits we tend to have that lead us to spend more money than we need to. But, making a few simple changes in our lives can help us save some cash and spend less on unnecessary things.
Consider a few of these tips below on how to spend less money and apply them to your life to have you saving big in a small amount of time.
Start Shopping Smart
When you walk into a grocery store, or any store for that matter, without a plan in mind, you are likely going to spend on things that you don’t need.
Always shop with a strategy. Stores are designed to get you to spend more money, so preplan your shopping to avoid getting sucked in by flashy sales signs and promotional deals for things you don’t need.
The best way to save money while shopping is to go into the store with a preplanned list of items that you need to buy – and then stick to it!
The fact of the matter is, even experts studying peoples’ shopping habits tell us that we, as humans, have an innate desire to consume. So, when we see a deal on an item we don’t even need, we have a certain fear of missing it and we tend to purchase without thinking. This is why having a list and sticking to it is so important.
How to spend less money? Stick to Cash
You might be able to relate to this or you might not, but humans, in general, tend to spend more money when they’re using a piece of plastic to pay for their shopping versus using cold hard cash.
When you spend cash overspending on a credit card, you are likely to spend less because you have a physical representation of exactly how much you are spending rather than swiping your card and just seeing numbers on a receipt, which is just a conceptual idea of what you are spending.
People who spend on credit cards tend to spend 12-18% more than those who deal solely with cash. In fact, a study done with McDonald’s showed that people who spend on their credit cards average a bill of $7, while people who use cash spend an average of $4.50!
Generic Brands Are Just As Good
You might think you are giving up on quality when you buy generic brands over brand names that you recognize, but the truth of the matter is generic brands are just as good and cost a fraction of the price.
In reality, generic brands are actually often even made in the same factories as your favorite brands and you just end up paying more money for the packaging of big brand products.
A study showed that both chefs and doctors were more likely to buy generic brands when it came to their respective fields than the general public. This just goes to show that professionals buying food and medicines trust generic brands as much as they do trust brand names, so why shouldn’t we?
Quit Bad Habits
If you want to know how to spend less money, bad habits like smoking and drinking need to be broken. People who smoke end up spending $1500 a year on cigarettes and that’s only if they live in suburban areas or small towns.
According to The New York Times, a low-income smoker spends about 25% of their entire income on cigarettes; this is a huge chunk that can take away from potential savings. Tax laws and the pricing of cigarettes vary from state to state in the US.
When it comes to spending money on alcohol, the average person will spend roughly $10 on a drink with dinner, and that number can go up to $40 if they go drinking to a bar. Cutting out these habits can help you save big in the long run.
Make Your Own Coffee
If you’re the type of person who stops by your favorite coffee shop on the way to work to pick up your morning cup o’ Joe, you’re probably spending anywhere from $3 to $5 a day on one cup of coffee. The average coffee drinker in the United States drinks up to 3 cups of coffee a day and that adds up over the year!
I mean, hear me out here, I adore my latte every now and then but if you live the 9 to 5 life say in an expensive city, and drink 2 coffees a day (around 5$) to keep you going, by the end of the year you might easily be more than 1500$ out of pocket! Not negligible.
If you love coffee that much, by all means, be my guest! However, with a little ingenuity, you could dramatically reduce this expenditure to double digits.
A small investment in home brewing tools to make, say, a delicious, scrumptious, cup of pour-over coffee will cut the cost of a cup to a measly 20 cents while retaining a great coffee experience.
Brewing your own coffee tastes better, and with all the savings, it will even make you feel better!
Buy Quality over Quantity
Yeah, spending $20 on shoes over $60 may seem like a good idea at first, but if you really want to know how to spend less money, go for the good quality $60 shoe. The truth of the matter is that you will probably replace the $20 shoe in a few months, while the good quality $60 shoe will last you years.
In the short term, you might be spending less money, but in the long term, the quality product will last you longer, so it won’t have to be replaced as often, in turn saving you money.
Ride a Bicycle
Public transport, gas prices, and even gym fees can clump up to become a good chunk of your paycheck. If you want to save money, invest some of it in a bicycle.
Riding a bike to work is not only a great form of exercise, but it will also save you from spending on transport, whether you take the bus, a train or drive. According to USA Today, depending on your city, using public transport in the US can range from $435 to $1000 a month! If you live close enough to work, cycling there is one of the easiest changes you can make in your life to save big!
One bonus idea to learn how to spend less money
At the end of the day, the one thing you want to do to improve your saving is to learn how to track your expenses. You can do that via pen and paper but there are so may Apps nowadays that allow you to do that on the fly and keep your expenses well organized and easily accessible for review.
I personally use the Easy Home Finance App for my android devices because it’s free, quick and simple to use. For the Apple ecosystem, a lot of people swear by Mint.com.
Remember, what gets tracked gets changed!
Track everything that you spend your money on so you can know where you are spending most and cut back on it! Use these simple tips to create a cushion of cash for a rainy day in no time!