20 Ways to Cut Spending

 

Christy Bieber | The Motley Fool

Are you spending more money than you want? Many Americans live paycheck to paycheck and don’t have enough money to save. Sometimes, that’s because their income is too low to pay for basic necessities. But in many situations, Americans don’t save enough not because they make too little but because they spend too much.

Figuring out how to cut spending isn’t as easy as it sounds, as you may not realize where you’re overspending and it may be hard to break long-held habits. However, there are ways to reduce your outflow so you can devote more money to your goals and less to purchases that don’t improve your life or long-term financial situation.

Here are 20 ways to cut spending that could help you keep more money in your bank account, instead of spending your cash as quickly as it comes in.

Man with money flying out of open wallet

1. Track your spending

When you go on a diet, one of the things you’re often told to do is count calories. This process lets you know if you’re going overboard on eating, and the very process makes you less likely to indulge because you’re paying more careful attention to what you’re doing.

The same basic premise is true of tracking spending. If you don’t know where your money is going, you may end up spending a few hundred dollars a month on small purchases without even realizing it. But if you track your spending, you can find problem areas — and you’re more likely to consider a purchase carefully if you have to write down the expenditure.

Tracking your spending for at least 30 to 60 days is typically the first step in making a budget, because it gives you an indication of where you’ll need to cut. But it can also be a good idea to track spending on an ongoing basis if you’re trying to get a handle on your money.

By making yourself write down everything you buy in a notebook, on a spreadsheet, or in an app, you’ll give more consideration to each purchase and will spend consciously instead of mindlessly.

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