10 Ways to Save More Money

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Do you ever get to the end of the month and wonder where all your money has gone? Or do you feel like you can never find extra money to save each month?

Often we spend money we don’t even realize. Sometimes I realize I’m spending money each month on things I don’t even care about. For example, there was a period of time in my life where I was spending a significant amount of money on new, expensive clothing. But I’m more of a jeans and sweatshirt person, so I was wearing each piece of new clothing MAYBE once or twice a year. Just by cutting that spending in half, I started saving hundreds of extra dollars each month.

To help evaluate your spending, I created this list of 10 areas you may be overspending. However, keep in mind that everyone is different. Some of these items may be very important to you and that’s okay. Prioritize what you value and what brings you happiness. This is meant to spark some ideas about ways you currently spend your money that may not be bringing you any happiness, or things that could be easy for you to cut.

1.      Transportation

Transportation is one of the largest expenses in a monthly budget. Between car loans, repairs/maintenance, and fuel, it can quickly add up.

First, make sure you can actually afford your vehicle. It is best to only purchase vehicles in cash, but I understand this can be difficult if you are just starting out in your financial journey. How much you can afford definitely depends on your income, but I would aim to spend around 5% or 6% of your pre-tax income on a vehicle loan. That doesn’t sound like much, but that allows for a $200-$250 payment on a $50k salary. 

Other ways to cut spending on transportation: carpool, live closer to work (as long as the housing cost does not go up dramatically), or purchase a more efficient vehicle.

2.      Housing

Housing is usually people’s largest monthly expense. If you can do anything to lower your housing expense, this will make a HUGE impact on your spending and ability to save.

A general rule of thumb is that you should not spend more than 30% of your income (before taxes) on housing, but I would take this a step further. If possible, try to get this amount to 20% or lower. This may seem difficult or even impossible, but consider how much you are paying for comfort.

Could you downsize? Could you live in a cheaper area of town? Could you get a roommate (or another)?

This may require sacrifice, but it will make the single biggest difference in your monthly expenses.

3.      Food

Food is one of the major over-spending areas. However, it also is typically is one of the best opportunities to cut spending most quickly. Unlike housing & transportation (where it may take months to change those situations), food spending can be cut as soon as you make the decision.

Eating Out

The major reason people spend a lot on food is because we dine out excessively. I think the reason for this is one of two things: either we are using food as a social activity, or we do it for convenience. I don’t think either of these reasons are inherently bad, but once we identify the reason behind the spending, it typically makes it easier to cut it.

If you are using it as a social activity with friends, try having a conversation with your friends about it. Try committing to eating out only once a week, and find other free activities to do (such as going for a walk or hanging out at someone’s house). Even if no one wants to be the first to say it, I’m betting most of your friends would welcome the opportunity to save money.

If you are eating out for convenience, there are a couple of alternative strategies you can use to save money while also keeping the hassle to a minimum. You could try meal prepping all of your meals in one day, or you could use a meal kit delivery service. I have found that using a meal kit delivery service encourages me to eat in: it’s way more convenient than finding recipes and going grocery shopping, the meals are delicious, and it cuts down on food storage or waste. I will say that some meal kit delivery services are expensive, but there are many lesser-known options that are cheaper. I use Home Chef and spend about $70 per week for 6 servings. That provides all of my dinners. I eat sandwiches for lunch, and I dine out for dinner about once a week. I estimate that I save around $70 on dinners alone by using this. If I cooked at home and did not use a meal kit service, I could save even more, but I personally choose to pay for the convenience in order to stay motivated to eat in.

Alcohol

If I have learned one thing, it is to make sure I budget for alcohol. I have found that alcohol spending is one of those budget categories that I tend to forget about, yet my purchases definitely add up each month. It can get excessive if you don’t pay attention to it, especially if you are buying alcohol when you dine out.

To cut spending here, I generally try to avoid purchasing alcohol at restaurants (cooking my own meals more often has helped with that). I also try to buy my entire month’s alcohol at once, because that makes me more conscious about how much I’m really spending on it. I budget a certain amount for it, and then I go purchase it at the beginning of the month (usually a few bottles of wine). I know that whatever I buy has to last me the month. This also encourages me to buy less expensive bottles to make my budgeted amount stretch further.

Daily Coffee

Some people swear by their daily Starbucks run, and that’s fine if you consciously budget for it. But if this is a category you don’t absolutely need, cut it. If you’re happy with a cup brewed at home (I use a Keurig and am totally happy with it), then maybe limit Starbucks runs to once a week. This can save you $100+ each month.

4.      Subscriptions

We live in a world of subscriptions! This is great, because it provides convenience, and I believe it can even give us opportunities to save money in some cases. But so many people have subscriptions that they no longer use, do not need, or do not even know about.

First, track your monthly spending so that you know what subscriptions you are paying for. Then ask yourself 3 questions: Do I use it? Do I get enough value to justify the price? Could I lower this cost?

Do you use it? Definitely cut subscriptions you no longer use.

Do you get enough value to justify the price? Consider cutting subscriptions you don’t use very often. If you go to the gym only a few times a month, cut your gym membership and work out at home. If you use cable only once a week, try and live without it. 

Finally, could you lower the cost? Shop around to minimize any necessary subscription costs. Comparison shop for cheaper phone plans, meal kit services, or gym memberships.

5.      Clothing

Unless you are building a brand-new professional wardrobe, chances are your clothing spending is not absolutely necessary. If you’re like me and you realize you spend money on clothes that you don’t even wear, just cut it from your budget (besides maybe a few new pieces a year). If fashion and clothes is your thing, just try cutting back. Do you need to shop as often? Could you shop cheaper brands or secondhand?

6.      Personal care

Like alcohol, this is another one of those categories you may not realize you are spending so much. But it adds up! One trip to Target for shampoo easily turns into $100 of miscellaneous items you “need.” Track your spending, plan your trips, and don’t buy things you weren’t planning to buy beforehand. One way I keep my personal care spending low is by using Amazon’s Subscribe and Save service. This way, I am avoiding stores altogether, and am not tempted to buy things that I walk by.

Other opportunities for personal care saving: haircuts (could you find a cheaper stylist, or get haircuts less often), manicures/pedicures (are they necessary or could you at least go less often), and makeup (could you find cheaper brands that are just as effective?).

7.      New Technology

Having the newest cell phone, laptop, or TV is very tempting, but do you need it? Sellers encourage you to buy the latest gadgets by offering great “discounts.” But is it a discount if you don’t really need it? Do you need the new iPhone, or do you just want the new features? Try to wait until your existing device breaks first. This is another large expense category that requires sacrifice, but can make a huge difference in your ability to save money.

8.      Insurance

We all need various forms of insurance: car insurance, home insurance, life insurance, and renter’s insurance. But you could be paying more than you need to. Like subscriptions, this is a category where you can spend a few hours comparing options to potentially save hundreds per year. And let’s be honest—no one likes spending money on insurance. So why pay more than you need to?

9.      Expensive gifts/traveling/charity

I may get some disagreement on this one: If you’re trying to find ways to save money, it may not be a great idea to spend significant amounts on gifts, travel, or charity. But Hannah, how could you be so selfish? Don’t get me wrong, I think all of these are great ways to spend money. But there’s a time for it. I want to give generously, and take others traveling, but I know if I do that now it would significantly delay my time to financial independence. Spending money now means you give up years of valuable compounding, and someday that money will be worth a lot more. I’d rather save more now, let it compound, and give even more generously later.

Of course, I think giving to charity, giving gifts, and travel are always great ways to spend your money (even early on). But be wary of how much you are spending in these areas, and maybe cut it back a little for a few years. 

10. Brand Names

Generic brands exist for almost everything—medications, personal care items, food, and home items. You pay a premium for name brand, and usually the generic brand is the same. Check out the ingredients of the medications and personal care items—usually exactly the same. Or try out the generic brand for food and home items and you’ll usually find they’re the same quality. Yet you will pay SIGNIFICANTLY more for brand names. This could add up to hundreds of dollars a year. You don’t have to give up anything to save money in this category—just buy the cheaper version. This should be one of the easiest changes to make in your financial life!

The most important thing you can do to identify ways you could cut spending is to track your spending. Tracking your spending can show you where your money is going that you may not even realize. My FREE budgeting and spending tracker spreadsheet is a helpful tool.

Are there any other categories you think people should consider cutting? Share below!

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