Ten Simple Ways to Spend Less Money

There are two ways to get ahead financially. The first is to make more money; perhaps that is the obvious one. The other is to spend less money.

Out of the two options, saving money is actually more valuable. If you make an extra $1 you will need to pay taxes, say 25%, so you would then have $0.75 left. Certainly that is more than you had before but you don’t get to keep the full dollar. However, if you save $1 you get to keep it all. So saving money is a great way to get ahead financially.

While I am sure you have heard a lot of these before, I’d bet that most people don’t practice each of these on a consistent basis. While you review the list, think of how you can make a minor adjustments to your week and then do a little math to figure out how much you’d save over the course of a year.

Here are ten simple ways to spend less money:

1. Use Cash
   By using cash instead of credit or debit people spend a lot less money. On average people will spend 28% less with cash than with a credit card, and 18% less with cash than if they use a debit card. There are several reasons why this is true: cash creates an emotional connection, such that you actually notice when you spend it. Further if you only spend cash you know that you can’t spend more when you run out and as such you are more consciously aware of how much you have left. Bonus Article: Ending Your Love Affair With Credit 

• Track Your Spending

  If you keep track of your spending, you will become aware of patterns. You will notice the types of things that you waste money on, the types of things that add up to more than you think, and you will see ways to save money. For example, you might not realize how much you spend each month on your morning coffee. By recording it and noticing at the end of the month how much you spent, you may realize that it is a lot more than you think. Bonus Article: Keep a Spending Log 

• Have a Budget

  Having a budget places restrictions on how much you will spend on different categories. You will know exactly what is coming in and what is going out. You can also work on reducing the amount you spend in different categories over time. People often make budgeting very complex. You can often be more effective with a simple budget system that places your spending into a few broad categories. Here is my Simple Budget System. 

• Cut One Monthly Expense

  Eliminating one monthly expenditure from your budget can have a huge effect on your available funds. Think through the different expenses you have that occur monthly. These might be things like your electrical bill, cell phone bill or car payment. You may also have things such as website memberships, gym memberships, or other reoccurring fees. Obviously some of these are things that you can’t change, but simply look for one of these that you can eliminate and do so. While $20 or $30 a month doesn’t seem like much it adds up quickly over the course of a year or several years. 

• Walk or Bike More

  By walking or biking more frequently you are able to eliminate several expenses. The most obvious is the gas costs but it goes much deeper. You will also save on parking fees and on wear and tear on your car. You will need fewer oil changes and have fewer problems. Bonus Article: Walking can help you “Get Fit and Have Fun” 

• Do it Yourself

  Another way to save money is by considering things you pay someone else to do that you could really do yourself. Perhaps you pay someone to cut your grass, change your oil, or clean your home. Are some of these things that you could do yourself? You can take this a step forward by doing things like making gifts for others. Homemade Christmas gifts or Birthday gifts are often more meaningful than purchased items, plus they are another way to save money. Bonus Article: 15 Awesome Tutorial Websites You Probably Don’t Know About 

• Borrow Things from Others Instead of Buying Them

  If you are looking to make a purchase for something that you will only use periodically you should consider borrowing it from a friend, neighbor or family member. For example, I have an agreement with my neighbor where he allows me to borrow his lawnmower. In exchange, I pay the gas (probably $10 a summer for both of us to use it), and I store his lawnmower in our heated garage during the winter. This has not only saved me the purchase price of a lawnmower but the maintenance hassles that come with it. Another example is DVDs. My friends and I swap DVDs of our favorite movies and television shows. Many people are able to enjoy the product instead of spending the extra money to purchase it. 

• Become a Home Economist

  Someone who is very intentional about managing the finances of a home can save a lot of money by making deliberate decisions. Being a home economist means watching for sales, collecting coupons, and looking for other ways of saving money. Saving a little here and a little there quickly adds up. Bonus Article: Turn Yourself Into a Savvy Buyer 

• Eat Out Less

  The amount of money people spend eating out is shocking. Often when people start tracking their spending this is the category that is the most surprising. You save substantially by eating out less. Look for times when you can bring a lunch with you instead of going out for food. Carry meal replacement bars with you for when your schedule changes suddenly. Even cutting out a couple of meals a week from your expenditures can go a long way. Bonus Article: How to Find The Time to Cook Healthy Meals 

• Pay off a High Interest Debt

  The interest from debt can be a significant financial burden. Many times people end up stuck in a rut, paying off interest and very little principle each month. Making a concentrated push to pay off a debt can be an important way of saving money. Focusing to pay off a debt with a high interest can free up a lot of money on a monthly basis. Bonus Article: 8 Ways to Pay off Your Mortgage Quickly

What other ideas do you have? Suggest them below in the comments!

Written on 9/01/2009 by Danny Gamanche. Danny is a business professor at a private college where he equips students for careers in business and success in all areas of life. You can catch him at his blog, Success Professor.

Photo Credit: voobie