How to Cut Your Spending and Start Saving

How to Cut Your Spending and Start Saving
Written by Irina Vasilescu

If you’re unfamiliar with scenarios which can be considered a vicious cycle, how about this? You’re comfortable with your lifestyle and quite contented with your salary. However, buying one stuff too many caused you to spend more than what you actually earn. In order to fill the gap, you borrow money.

When your next paycheck comes in, the majority goes towards repaying debts. To keep up with the lifestyle that you are used to, you keep on borrowing, then earning, then using what you earned to pay debts. A bad result of this scenario is all your income goes towards repaying debt until you have nothing left. The worst scenario is that your constant borrowing leads you to be neck-deep in debt or even bankrupt.

There is absolutely no reason for you to have debts of any amount, as long as you know how to live within your means. This goes hand in hand with cutting back your spending and starting to save.

What if you don’t have the self-discipline to do just that? If you are serious about putting your finances in order, you do need to implement ways to cut your spending and start saving. That is exactly what we will learn more about here.

Ways to Cut Your Spending

Again, cutting back on your spending is all about practicing self-discipline. Here are the individual ways that you can cut back on your spending and be on your way towards saving money for future emergencies:

Learn how to prioritize your spending

You’re seriously considering going through a lifestyle change just so that you can start saving money. There’s actually no need for you to live like a pauper to set aside funds for emergencies and future expenses.

By simply learning how to work out your priorities, you can slowly but surely get your finances in order.

How should you go about prioritizing your spending? First comes the necessary expenses, then comes the luxury or non-priority items. For the necessary expenses, list down all your monthly bills. This can include rent or mortgage, car expenses, food, clothing, schooling for the kids, insurance premiums and all the other must-pay-for items in your budget.

Next, set aside funds for your other important expenses including your retirement fund and the kids’ college savings funds. If you are planning for a family vacation, you can set aside funds for that as well. Make sure to include as a must-pay-for-item in your budget some funds for your future emergency expenses.

If there’s still enough money left, you can allot the funds on nights out, eating out, small luxury items, gifts, etc. Before using any of your hard-earned bucks for these, ask yourself a few questions:

  • Do I really need it?
  • Is it something that I can afford?
  • Are there cheaper alternatives?
  • Should I buy it now, or when it’s cheaper?

By prioritizing your spending, you would know which items are a must to include in your budget, and which ones deserve a second place in your list.

Think twice before you buy, or at least go comparison shopping

Use the questions in the previous bullet to assess whether you really need to buy an item or not.

Let’s say that you saw a tablet computer on sale, but you already have one that’s in perfect working condition. The answer to the question “Do I really need it?” is a big no.

If your spending instinct still exists, ask yourself another question which is “Is it something that I can afford?” You can supplement this with asking yourself if there is another, more important item that you can use the money for.

More often than not, contemplating or thinking twice before buying will make you go to a full stop – and prevent you from buying the item altogether.

If you do find that you must buy an item, at least go comparison shopping. There are plenty of websites which you can visit to check on the rates of different products.

Do a quick search on discount codes or vouchers that you can use to purchase the item with the least possible price. If there’s more than one brand available, browse through the online reviews so that you can at least check if you are getting the best quality for your money.

Cut back on the luxury items

Another way to cut your spending is to remove the luxury items from your budget. Take a look at the items which you are paying monthly subscription fees for.

If you already have Internet access at home, why should you pay additional fees for cable or satellite TV when you can simply watch premium cable shows via streaming services? The fees for these are a fraction lower than what you would pay for your cable or satellite TV bills. If you already have Skype, Viber and other instant messaging or video calling services, there’s probably no need for you to pay for landline service anymore.

You can also check on your monthly data and calling plans. If you have unlimited data but you are only using a minimal bandwidth for browsing sites using your mobile phone, look for a cheaper mobile phone plan.

What about your car? If you are driving a gas guzzling SUV, consider trading it for a more modest hybrid vehicle to save money on gas and car maintenance. Even if you are a gadget aficionado, don’t constantly buy the latest models released in the market if the one you’re using is still in perfect working condition.

Cut back on your entertainment expenses

There’s nothing wrong in trying out a fancy new restaurant, but do you have to do it every week?

If you would like to save some serious money, cut back on your entertainment expenses. If you must go out for drinks with friends, do it during happy hour so that you can save money.

Invite friends over for DVD night instead of going to the movies. Rather than go out to fancy new restaurants, invite family members to go on potluck dinners so everyone can have fun without having to spend too much.

Ease up on the vices

If you’re a smoker or a drinker, you might think twice about getting a puff of smoke once you realize how much you are paying for such vices. Not only will cutting back on vices be good for your pocket, but you will also be doing your body a huge favor.

Practice self-control

Retail therapy is something that a lot of women indulge in. But if you always do this, you might find your budget drained one time too many.

Again, ask yourself the question of whether you really need an item or not before buying it. If the answer is still yes, tell yourself that you will come back for the item after a couple of days. When you go back, you might find that the urge to splurge has already gone away.

If you’re working with a really tight budget, practice as much self-control as you can so that you can resist the temptation of buying things that you want instead of the things that you actually need.

Don’t discount the prospect of buying used or second hand

There are plenty of other everyday items that you can buy used or second hand instead of new.

When you go to the public library in your area, for example, you can borrow DVDs, e-books, actual books, games and other reference materials.

If you need a costume for your kid to use on Halloween, make your own or buy from a second hand or consignment store.

For hardware or other equipment that you need when making repairs inside your home, you can borrow or rent from neighbors.

Effective Ways to Start Saving Money

Now that you already have an idea about how you can cut your spending, how can you have that concrete plan to start saving?

The number one thing to do is set a reasonable savings goal. Making a budget and keeping track of your expenses is the best way to do this. Based on the amount of income coming into the household per month, you can subtract the necessary expenses. Make room for a few miscellaneous expenses, then set a target for how much you need to set aside for your savings account.

If you don’t have the discipline to put the money there yourself, set up an automatic debit arrangement with your bank so that you can force yourself to save.

You can also combine saving with earning. If there are odd jobs or freelance projects that you can take on, do so in order to augment your income. But just because you are earing extra does not mean that you can go back to splurging and buying whatever you want.

The point of looking for extra income is to boost your savings so that you can use it during financial emergencies.

By following these tips on how to cut your spending and start saving money, you can keep your finances in good order – and not have any money-related worries anymore.

About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.


  • Now that my online business ventures seem to be failing 2015 is certainly going to be the year I have to force myself to start making cutbacks and watching what I spend. And I mean REALLY watch what I spend, because I’ve tried halfheartedly in the past and normally find that I’m not really saving anything at all because what small tiny amount I save will only go on something else I don’t REALLY need.

    I’m already starting by scaling down on my mobile phone bill and my satellite bill which are over £100 a month combined and cancelling a couple of online subscriptions that I have left renewing because the prices were very low for me to take the time to cancel. :O

  • I have a really hard time controlling spending on things like food and entertainment, otherwise I’m really frugal. I think I really need to work on the self-control part of your post. I have a hard time not buying a new game when I see it.
    I’m already trying to scale my spending down, so that I can save at least 50£ a month, but I just don’t know…
    Anyway, this is a useful post, I might bookmark it for later. Have a nice day.

    • I’m like you, with food at least. My budget is pretty strict on everything but food, and I’ll spend tons of money towards food if I’m hungry. I don’t mind eating out or buying tons of ingredients for home cooking, and I must spend far more in the food category each year than any other expense besides major bills that I can’t avoid or lessen.

  • This is a good article with practical tips. I can relate well to the cut back on luxury and entertainment part. I used to buy myself fancy coffee which costs $3 per cup, about three to four times a week, thinking it was a treat for having worked so hard. I did not realize that the said ‘treat’ was actually hurting my budget. When I computed, I found out I was spending around $12 per week! Multiplied by 52 weeks, that’s a whopping $624! This is an amount I could have otherwise used to pay my other bills! Now, I still treat myself to a cup occasionally, but not as often as before. Less calories and more savings for me.

  • Self-control is the single most important thing a person can exercise in order to curb their spending. If a person doesn’t learn self-control, then they can’t hope to succeed at cutting their expenses and turning those costs into savings instead. Too many people skip on self-control and pay the price almost immediately.

  • A few of my friends have started trying to quit smoking. In order to assist themselves, they downloaded an app which tells you how much money you save by not smoking. Surprisingly (or not, depending of your take of it) some of them discovered they can save a few hundred bucks a month! That’s a few weeks of groceries, or even a new phone. I felt like that definitely motivated them, and that we should always reconsider our vices when trying to save money.

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