If you’ve had the opportunity to earn an income and watch it slowly disappear, this was written for you. You’ve likely witnessed firsthand how unnecessary spending can result in a less than favorable financial outcome. Its time you learned how to avoid unnecessary spending:
You’ve probably tried many ways to get your expenses under control without success. You convince yourself that you’ve “tightened your belt,” when in fact there’s so much more room to trim expenses.
So what’s the next step for you? What else can you do to keep expenses at a minimum?
The first step is to know how to stop spending money on unnecessary things. If you’re honest with yourself, you’ll realize that you’re spending way more than you need to.
Here are 19 tips on how to avoid unnecessary spending:
In this Article:
1. Check To See Whether You’re Wasting Money on Unused Subscriptions and Payments
Many people have expensive memberships to gyms, magazines, bundled bank accounts, and other services, but they seldom or never use them, or even forget about them entirely due to time and relocation.
2. Be Aware of Your Spending Habits
Making and adhering to a monthly budget can assist you in getting out of debt and staying out of debt.
If this is your first time budgeting, you may be shocked at how much money you’re spending on little items like coffee, lunches, or that secret snack store at work that your spouse isn’t aware of.
When creating your initial budget, ensure sure your fundamental requirements (often known as your Four Walls) are met. These are the following:
- Food
- Utilities
- Shelter
- Transportation
These are your requirements, and if you know what you need, you won’t be able to cut corners in these areas. Anything that does not fall inside one of these Four Walls, on the other hand, is fair game. No, you don’t have to go out to eat every night. Netflix, as much as I like it, isn’t really a utility.
3. Cut Down on Your Restaurant Expenditures
One of the simplest ways to save money is to change how you spend your money on meals. And we all know how quickly eating out can get costly. If you spend $15 on lunch four times a week, you’ll be spending $60 a week (or $240 per month)! Consider how fast you could pay off your debts if you had that sort of cash!
Consider this: Instead of going to the grocery store and roaming the aisles, plan your meals for the week, prepare a shopping list ahead of time, and stick to it. If you need to save even more money, don’t hesitate to leave the kids (or your spouse) at home. By planning your meals ahead of time, you may save money on food overall. I’m not saying you shouldn’t treat yourself to a good meal on a particular occasion, but you should cut down and make sure it’s in the budget.
4. Make Sure Your Credit Cards Aren’t Linked to Any Online Accounts
Do you keep your credit cards on your internet accounts to make it simpler to check out? If this is the case, remove them.
Having to re-enter your information every time you want to purchase anything is annoying. The inconvenient nature of the situation is precisely the purpose. If you have to grab your wallet, pull out your card, and enter everything in, you’re far less likely to make a purchase than if you can simply click a “buy now” button and be done in a flash.
5. Continue To Be Inspired To Cut Costs That Aren’t Required
When you’re attempting to minimize needless expenditures, having a clear financial objective in mind when you establish your spending priorities is a great source of inspiration. As an example my family is now debt-free, having paid off more than $30,000 in credit cards and vehicle loans thanks to our thrifty spending habits.
When we initially started attempting to cut costs, the reward was the pleasure of being able to sleep at night without worrying about living paycheck to paycheck. Even when we got out of the paycheck-to-paycheck cycle, we continued going because budgeting became enjoyable. It was no longer about deprivation. It was all about charting a course to achieve anything we want in life.
I believe that it’s critical to choose a goal that everyone in the family can get enthusiastic about. When cutting down needless costs becomes difficult, tell them: “We’re saying ‘no’ now so we can say ‘yes’ tomorrow”.
6. Consider the Entire Cost of Any Purchase
Many of the items you purchase will very certainly have continuing expenses to use and maintain. If you purchase one of those single-cup coffee machines, for example, you’ll need to buy the matching cups. Alternatively, if you purchase a pricey vehicle, you must pay for costly insurance, upkeep, and repairs.
Consider how much they’ll cost to run or maintain before making a purchasing choice to ensure you’re not committed to a lifetime of large expenditure. If you’re going to finance, don’t forget to account for interest. Unless you’re willing to pay both the upfront and continuing costs, avoid the item or go for a lower-maintenance alternative.
It’s also important to think about the overall expenses of any transaction that necessitates a loan. You’re getting a very poor bargain if you can rent to own a $500 washing machine for $50 a month for 24 months for a total of $1,200. That’s an extreme example, but there are numerous instances when salesmen encourage you to focus only on the monthly payment, such as when purchasing furniture on credit or taking out a vehicle loan.
Don’t be fooled by this ruse; figure out how much you’ll have to pay in total and how long you’ll be trapped paying payments before deciding whether it’s worth it.
7. Make a Stipend for Yourself
Create a separate bill-paying account and utilize it to ensure that all of your bills are paid. You may use the money left over to pay yourself a predetermined amount that you can spend anyway you choose.
8. Place a Credit Card Freeze
Credit card debt is a significant impediment to cost-cutting. When you don’t have the cash on hand, it’s convenient to use a credit card, but charges may quickly accumulate, especially if the interest rate is high.
If you have credit card debt, freezing your cards may help you save money each month.
You could actually freeze your cards by placing them in a jar of water and placing them in the freezer, according to some financial experts. You’ll need to thaw it out before you can use it.
If you wish to do so more formally, you may temporarily disable credit cards by freezing them on your issuer’s website or app, which prevents purchases. No additional charges will be authorized by the issuer. Your recurring payments will continue to be processed, you will still be required to make monthly installments, and interest will continue to accumulate.
There are no penalties, and you may “thaw out” the cards whenever you want.
9. Leave Your Credit/Debit Cards at Home
Only bring the cash you really need, and don’t bring a cash card with you to withdraw more funds from the hole in the wall. That way, no matter how tempted you are, you must ultimately walk away.
10. Budget For “Fun Money”
Make room in your budget for “fun money” (sometimes known as “personal money”). You feel restricted when you don’t have any personal spending money.
This may result in you exceeding your budget because you are upset or irritated and go on a spending binge.
Just do yourself a favor and set aside some money for pleasure for you and your partner.
You have complete control over the quantity. I often see people’s fun money budgets range from $20 to $100 per person, depending on their income and financial objectives. Most individuals spend between $20 and $50 per person on average.
11. Reduce Monthly Expenditures That Aren’t Required
When it comes to budgeting, it’s not only our everyday purchases that may throw us off. Surprising energy bills and late payment penalties are only two examples of hidden monthly costs that may be avoided if we pay attention.
We are all aware that our heating bills are greater during the winter (or at least it will for those of us in the Northern states). What you may not realize is that staying warm does not have to be prohibitively costly. There are many things you can do to winterize your house and keep your energy bills from skyrocketing. Getting a home energy assessment is one of the things we recommend. This will allow you to determine where your house wastes the most energy and what you can do to avoid it. If you can’t afford to have your house weatherized, you may be eligible for weatherization help.
Find out how to apply for this help by contacting your state’s weatherization organization.
When it comes to not being able to make payments…
Are you experiencing trouble making timely payments on your bills? Late payment penalties may exacerbate an already tough financial position. Payment grace periods are common, but it’s critical to understand the duration and conditions of each grace period so you can avoid late penalties as much as possible. Installment loans, such as those for a home, vehicle, or education, usually have a certain number of days after the due date before being deemed past due.
Grace periods for credit card payments are different from grace periods for loans. It’s critical to pay your credit card bills in full before the due date to prevent incurring interest. You may prevent accumulating interest if you regularly pay your account off in full by the due date. You’ll be deemed past due if your payment isn’t made in full by 5 p.m. (in the creditor’s time zone) on the due date. However, since the payment must be a full 30 days past late, or complete cycle past due, it may not have an impact on your credit score or report. To prevent incurring late penalties, we recommend paying attention to all due dates and payment cycles.
12. Buy Nonperishables in Bulk and Save Money Using Coupons
Many individuals seldom look at the bigger packages of nonperishable goods because they believe they are just too much. Examine the cost per unit of each size and choose the one that offers the greatest value. Check for discounts and promo codes for products you purchase often, and if a nice deal comes up, buy in quantity.
This may build up to a lot of reduced fat if spread out across months and a variety of products (think about all the nonperishables in your household, from salt and sugar to soap and shampoo — food is only the beginning).
13. Reduce Your Housing Costs
Housing is certainly one of your largest expenditures; individuals earning less than $50,000 per year spend 36.6 percent or more of their income on housing. This is more than the 30% rule of thumb suggested by financial experts. When it comes to mortgage applications, lenders want to see someone spend around 28% of their pre-tax income on housing.
Reduced housing costs may seem to be a nuclear option, but it is something worth exploring, and downsizing may be simpler than you think.
Renters have a variety of alternatives for saving money on their rent. Here are a few:
- Make an effort to find a roommate.
- Give away a parking spot that was already paid for.
- For a rent cut, offer to perform the repairs yourself.
- Change to a less expensive apartment, or even a less expensive section of your region or nation.
- Those who own a house have the following options:
- Refinancing to reduce your monthly mortgage payment and obtain a cheaper interest rate.
Private mortgage insurance should be eliminated. PMI is needed if you purchased your home with less than a 20% down payment. It is eliminated after you have 20 percent equity. Check the house prices in your region, even if you haven’t paid your mortgage down that much – if they’ve increased, so has the worth of your home. If the value of your home has increased to the point where you have 20% equity, you may ask your lender to remove your PMI, and they must oblige.
Instead of selling your house, try renting one. Renting a home has a number of benefits, including reduced upfront expenses such as taxes, insurance, and upkeep.
Short-term rent out your whole house or a part of it.
14. Request a Lower Credit Card Interest Rate
If you have a high credit card debt, contact your credit card provider and ask for a rate decrease. They may be ready to compromise if you pay your payment on time every month. If they refuse, request a 0% balance transfer to a card with a lower interest rate. A credit card for poor credit may help you repair your credit score and qualify for cards with higher benefits and cheaper rates in the future if you have a history of late payments.
15. Get Your Student Debts Consolidated
Determine if it makes sense to combine all or part of your student loans if they have a high interest rate. While most federal loans now have fixed rates, if you can locate a suitable loan consolidation program, you may be able to save money every month.
16. Turn Down the Heat on Your Hot Water Heater
In most houses, the hot water heater is a significant energy drain, accounting for approximately 14% of total energy expenditures. The water is often maintained hotter than most individuals need, and the heat is continuously lost to the environment, implying that you must use more energy than ever before to keep the water that hot.
Reduce the temperature to 125-130 degrees Fahrenheit (about 60 degrees Celsius) and install a water heater blanket to keep the heat in — a blanket may pay for itself in about a year, and you’ll be saving money on a monthly basis after that. Insulate any exposed hot water pipes while you’re at it for even more savings.
17. Avoid Splurging on Trips That Aren’t Essential
Some expenditures may not follow a set schedule. They are unpredictable, and because of their sporadic nature, they are difficult to avoid.
Traveling comes with its own set of needless expenses that can be avoided just as simply as the others we discussed before. Your summer trip may cost a bit more than it needs to, from checking your baggage on an aircraft to purchasing plane tickets in the incorrect month.
Baggage costs for flights inside and between the United States, the United States Virgin Islands, Puerto Rico, and Canada on carriers like American Airlines and US Airways are high enough to remove a few enjoyable activities from your trip budget.
With your first checked bag costing $25 and any additional checked baggage costing $35, $150, and $200, you may find yourself paying a large fee that you might save with some smart preparation. Invest in vacuum-sealed storage bags to save room in your suitcase and avoid carrying additional luggage.
Whether you’re not sure if you’ll have access to a vacuum at your destination, choose travel bags that don’t need a vacuum but still save you room. Do you still have a lot of baggage to check? Instead of packing many separate outfits that take up the majority of your packing space, choose clothing that can be worn more than once throughout your stay without requiring much washing.
If it’s not your luggage that’s driving up your holiday expenses, it may be your airline ticket purchasing approach. Are you aware that there are optimum and worst times to buy airline tickets? That’s correct, just by buying at the wrong moment, you may end yourself spending hundreds of dollars more.
According to a four-year study conducted by the Airline Reporting Corporation, the best domestic flight rates may be obtained six weeks before travel. The cheapest foreign tickets were discovered approximately 24 weeks before to travel. While it is possible to discover a lower price closer to the departure date if the airline chooses to put tickets on sale, the experts concluded that the safest option is to buy your ticket based on these results.
18. Reduce the Amount of Money You Spend on Entertainment
Many people think of entertainment as the first item to eliminate when attempting to save money, but they fail to consider the ongoing expenses that chip away at your financial foundation month after month. Here are a few things to think about that you may have missed before.
19. Go Shopping With a Specific Objective in Mind
We’ve all been in that situation. You’ve used up all of your shampoo and toothpaste. So you make a short trip to Target with those two things in mind. But as soon as you step in the door, you’re drawn to the dollar section and load your basket with a slew of colorful phone chargers and water toys for the kids that you swear will be utilized on a regular basis.
A simple trip to the shop for two necessities just became a lot more costly thanks to a few apparently innocuous impulsive buys.
Is anybody actually planning on being distracted when shopping for necessities? Most likely not. However, if you find yourself in this situation often, you should make it a point to avoid shops that force you to spend excessive amounts of money. Alternatively, you might send your spouse in your place.
Final Thoughts
It’s extremely simple to spend more money than you need. But, if you truly want to, it’s also extremely simple to save costs and learn how to avoid unnecessary spending. Take a look at your spending habits and see where you’re going overboard. This way, you’ll know how to cut down on wasteful expenditures. Identify areas of your budget where you may save money. You’ll appreciate having extra money to spend on the things that matter!