One way to start saving money is to simply stop spending as much, whether or not you live on a fixed income or a strict budget. The average American spends roughly $18,000 annually on nonessential items, according to a report from USA Today. Yikes! We could all do better, so turn over a new leaf today to spend less and save more. You got this!
Where You’re Overspending Your Money
You might feel you can’t afford to keep up with bills because you spend money on things you don’t need — think clothes, extra furniture, and more. Spending less money allows you to get ahead of stressful bills and helps you to achieve financial wellness.
Here are the top five monthly unnecessary expenses.
|Expense||Average Monthly Cost|
|Eating out at restaurants (includes lunch, drinks, etc.)||$750|
|Ridesharing (for non-essential trips)||$100|
|Online shopping (for non-essential items)||$90|
Ways to Spend Less Money Day to Day
Spending less is a commitment and requires some effort to adjust your lifestyle. But it’s totally worth it. You’ll no longer miss your daily drive-through trips when you realize that cutting them out has put hundreds of extra dollars in your checking account!
Deciding to spend less is the first step. Here are 10 tips that will help you spend less and save more.
Tip 1: Use a Budgeting App
First, you’ll need to understand your spending habits to know where you need to cut back. A budgeting app can help you do that. MoneyLion’s built-in Financial Heartbeat feature keeps track of every important aspect of your financial health, including spending habits.
The Financial Heartbeat offers smart tips that break down your spending habits based on income. From there, recommendations are made based on where you can cut spending.
MoneyLion also offers a number of excellent features like credit tracking, which allows you to see how well you’re taking care of your credit score over time.
Tip 2: Track and Negotiate Bills
Do you ever notice after you cancel a subscription or product that you get a message or email asking to come back? Many subscriptions you pay for each month have prices that are not as fixed as you might think.
You might find that a discount is waiting for you if you call to negotiate a bill or mention that you’re thinking about switching to another service. Successfully lowering your bills adds up over time and helps you save more.
Another simple solution is to simply be aware of what you’re paying for. Track your spending so you have insight into the products and services you pay for but no longer need. Unused recurring bills can add up to $500 a year of wasteful spending. Cut the unused subscriptions to help you save more money.
Tip 3: Stop Eating Out
Dining out is a major unnecessary expense and can include eating at restaurants, drinks at happy hour, and grabbing lunch from your favorite food truck. Data has shown Americans could save up to $750 a month on average without this unnecessary expense. That’s $9,000 every year! Just think of all the better ways to use $9,000 instead of on the fleeting pleasure of chicken wings and fries.
Cutting back on the restaurants may not be an easy lifestyle change, but you’ll instantly save more money. An added bonus: You may be healthier without the constant grab-and-go food you consume or constant happy hour drinks.
Tip 4: Brew Your Own Coffee
You might love your morning coffee — and your afternoon coffee, too. The convenience of grabbing a coffee on the go is obvious, but the savings you give up may not be quite as readily apparent.
That $3 cup of coffee from your local coffee shop might not seem like much, but if you’re a java junkie, $3 a day adds up to $1,095 a year — and that’s only for one cup a day. What happens if you opt for two or more?
Compare that to the $0.16 per cup if you brew it on your own at home instead. Brewing your own coffee also helps reduce waste because you can also reuse your own travel coffee cup.
Tip 5: Unnecessary Uber/Lyft
We all know it’s easier to call for a ride instead of taking public transit, but if your goal is to save money always look for the cheapest option when getting around. Plan your transit with free apps you already have on your phone like Google Maps.
Google Maps will estimate of time and money it will take to get you where you need to be. Try different options like walking, public transit, and biking. You can even calculate when to leave by adding “arrive by” time.
Tip 6: Canceling Subscription Boxes
While some boxes can save you money on household essentials, others are simply “treat yo self” boxes that you need to hit the cancel button on. Do you really need 10 brand new beauty products a month? Probably not. Remember one $25 a month subscription box adds up to $300 year.
Tip 7: Online Shopping for Non-Essentials
With a steady flow of ads steadily hitting your social media you can find yourself clicking and buying some non-essential items. Can someone please talk about those Wish ads? Non-essentials can include new clothes (when you don’t need them), electronics, and more. If you are trying to save money, remember your end goal. While buying a random thing online only takes seconds, think about how many hours of work it took to buy the item.
Tip 8: Shop Generic
Your favorite brands come at a premium, and your wallet can feel the effects. One study showcased that even though brand name prescription drugs only account for 11% of the drugs dispensed, they make up 89% of the total cost.
The premium price you pay for bigger brand names has implied benefits, although that’s not always the case. Be sure to research any product before you make a decision, and if you find that the generic option is just as good as the brand name, it’ll allow you to spend less money on the items you need.
Tip 9: Always Look for Coupons
Couponing is one of the simplest methods to save money. A coupon can be used as an advertisement to help attract new customers, but many products you buy might have a discounted sale or coupon available.
Tip 10: Find Free Events
Why not look into free events that are happening in your community and attend those instead of paying for entertainment?
Sites like Eventbrite and Facebook allow you to search for free events in a number of different categories. You can find free fitness events, family outings, movies, art or even networking events. Finding free events is a great way to experience the culture and social life in your city without spending so much in the process.
Start Spending Less
Try out these simple tips that can help you start to save — and see how implementing them impacts your financial health. Essential products like life insurance or emergency savings shouldn’t be a luxury, and simply changing your spending habits could mean that they don’t have to be.