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

Image source: Getty Images.

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. 

2. Make a budget

Living on a budget may not seem like fun, but if you're having trouble getting spending under control, using a budget to set limits is a good place to start. There are a few different approaches to budgeting, so almost anyone should be able to find one that works. 

If you need a lot of help controlling where your dollars are going, one option is to give every dollar a job. That means making a detailed budget specifying how much you'll save, how much goes to each fixed expense, and how much you'll devote to optional or variable expenses such as entertainment, groceries, and dining out. 

If you don't want to go through the process of making a detailed budget accounting for every dollar, you could use a simplified approach such as the 50-30-20 rule. This budget allocates 50% to your needs, 30% to your wants, and 20% to savings. This approach works well if you chafe at the restrictions of a detailed budget, but only if you're disciplined enough to hit your 20% savings goal and to limit your expenditures in other categories to the appropriate percentage of your budget. 

3. Consider going to cash only 

You can make all the budgets you want, but if you don't stick to them, they're nothing more than a wishlist. One way to force yourself to live within your means is to switch to spending cash only -- at least for a while. 

Switching to a cash-only system has a few benefits. First, studies have shown people tend to spend less when they use cash, because they get the visceral experience of actually seeing and feeling their money being spent. Second, if you don't use debt, you can't spend above your means. 

If you decide to switch to a cash-only system, automate payments to savings and to other essential expenditures. Then restrict yourself to only spending the cash that's left over. Your money will go where it needs to, and the cash you're left with will be all you have to spend.

4. Try an envelope system approach 

An envelope system can also help you make sure you live by your budget or by spending limits you set for yourself.

When you use an envelope system, you literally put the cash you want to spend on different categories of purchases into an envelope. For example, you may have an envelope for groceries and one for children's activities. Once the envelope is empty, you don't spend on that category anymore. 

There are apps, such as Mvelopes, that allow you to use a virtual envelope system. You can try those to see if they're as effective as having a physical envelope to restrict your spending.

5. Freeze your credit cards 

Avoiding credit cards can be important when trying to get your spending under control. However, you probably don't want to get rid of your cards entirely, because you need to develop a positive payment history to build credit. Furthermore, sometimes it makes sense to put large purchases on credit cards -- as long as you pay off the balance right away -- so you can get rewards and bonuses. 

If you want to keep credit cards around but you're trying to cut spending, it's important to make sure they aren't too much of a temptation.

One good option is to freeze your card in a block of ice. If you do this, you'll have to wait for the ice to melt before you use your card. You'll be forced to take time to think about your purchase, and the waiting will make you much more conscious about what you're using your card to buy. 

6. Institute a 24-hour rule for purchases

Another good way to make sure you aren't spending mindlessly is to force yourself to delay before buying things.

A 24-hour rule is a good approach. When you institute a 24-hour rule, you stop to think for a day before you buy something you may want. 

There are different ways to approach the 24-hour rule. You can set a basic threshold and determine that you'll apply the rule to any purchase over, say $50. Or you can establish a rule that you'll take a full 24-hour period for each $100 in cost. So if you wanted to buy a $300 TV, you'd think about the purchase for at least three days before going back to buy. 

A 24-hour rule is effective not only because it makes it more likely you'll end up only buying things you really want -- but also because you can use that time to shop for the best price. 

7. Have no-spend days 

One of the best ways to cut spending is to simply decide you aren't going to buy anything at all. Of course, you can't do this forever -- but you can aim for some no-spend days each month or even have an entire no-spend month.

When you have a no-spend day, you commit to buy nothing. If you try a no-spend month, you commit not to buy anything other than absolute necessities, such as food to cook at home. You could also make it a game to see how many no-spend days you can have during each month -- and perhaps compete with your spouse to see who can get the most. 

No-spend days not only save you money on the day you keep your wallet put away, but they can also help change your mindset over the long term. You'll break your spending habits and start coming up with more creative solutions to meeting your needs, rather than just buying new things all the time. 

8. Make saving a game 

Setting a budget and limiting your spending may not seem like fun, but it can be if you make saving money a game. There are lots of ways you can do that, such as:

  • Saving every $5 bill you get in change in a savings jar. Soon, you'll be looking for ways to get $5 bills back to see how full your jar can become. 
  • Reward yourself for hitting savings milestones. When you hit 10 no-spend days in a month, do something fun and inexpensive as a treat for yourself, like having a home spa day or going out to lunch with a friend. 
  • Have a how-low-can-we-go contest. Challenge yourself to find the absolute lowest price for a particular item you buy regularly, or have a contest with a friend to see who can spend the least on groceries or entertainment for a month. 

9. Use discount codes and coupons

While cutting spending often focuses on eliminating purchases, there are still some things you have to buy. When you do make purchases, your goal should be to ensure they cost as little as possible. To do that, always try to use coupons and look for discount codes.

You can order specific coupons that come from the Sunday paper for food and toiletry items so you can use coupons for things you actually buy. Sites such as Bargain Coupon Clippers and Klip2Save make this process affordable and easy. You can also search for coupon codes for all online purchases from RetailMeNot or use the browser extension Honey to find coupon codes automatically. 

10. Avoid shopping when you're hungry

You've probably noticed that if you hit the grocery store on an empty stomach, you end up with a lot of impulse items.

But what you may not know is that you're also vulnerable to overconsumption if you shop anywhere when you're hungry. In fact, researchers found a department store shopper who was hungry spent as much as 60% more on non-food products than shoppers who weren't starving. 

There are evolutionary reasons you have a tendency to try to acquire things when you're hungry, so make sure you avoid heading anywhere where you're likely to break out the credit cards unless your belly is full.

11. Always shop with a list

Another good way to avoid impulse buys is to make a list of items you need to purchase, and then stick to the list. You can do this at the grocery store, but also when you shop for other things.

If you're hitting the mall to buy a pair of shoes and a new belt for work, write down what you're going to purchase, and don't be swayed by other things you see along the way.

Keeping a list of big upcoming purchases can also be helpful to time your shopping strategically to buy when items go on sale. 

12. Unsubscribe from email newsletters and catalogs 

Signing up for email offers or catalogs from your favorite store may seem smart, especially if you get coupons or special offers mailed to you. But the reality is, all of the promotional offers just make you more inclined to buy something. 

You may see a must-have item in the catalog or decide a coupon is too good to pass up, and you end up spending money you otherwise wouldn't have. Eliminate this temptation from your life. 

13. Remove your credit cards from online accounts

Do you store your credit cards on your online accounts to make checking out easier? If you do, erase them.

It's inconvenient to have to re-enter your information every time you want to buy something. That inconvenience is exactly the point. You're much less likely to make a purchase if you have to get your wallet, get out your card, and type everything in than if you can just click a "buy now" button and be done in an instant. 

14. Institute a one-in/one-out rule

Chances are good you probably have most of your needs met right now. To make sure you don't buy unnecessary items, institute a one-in/one-out rule. When you put this rule in place, get rid of one old item for every new item. Want a new pair of shoes? Get rid of an old pair. If you don't have any old or worn-out shoes, do you really need new ones? 

While this won't work for everything -- you aren't going to get rid of spices just because you want a new one -- it works for most everyday purchases. You can sell or donate the items you're giving away to help defray the cost of the new items, avoid clutter, and limit what you buy with this technique. 

15. Cancel subscriptions you're not using

Chances are good you're probably spending money on at least one subscription service you aren't getting a lot of value from. Maybe that's a gym membership, a magazine you don't read, or a streaming service you no longer watch. Whatever your unnecessary subscription, cut it so you can save the money you were spending.

Go through your credit card statements carefully to look for recurring monthly expenses and make a list of services you're paying for. Ask yourself if each one is really worth it or if the money could be better used for other goals. If you don't really need the subscription service, cut it from your life. 

16. Look at total costs for any purchase

Many of the things you buy probably have ongoing costs to use and maintain. If you buy one of those single-cup coffee makers, for example, you have to buy the little cups that go in them. Or, on a larger scale, if you buy a costly car, you have to pay for expensive insurance, maintenance, and repairs. 

To make sure your purchases aren't committing you to a lifetime of big spending, consider how much they'll cost to operate or maintain when you make a decision to buy. If you'll be financing, factor in interest charges, too. Unless you're comfortable paying both the upfront cost and the ongoing expense, skip the item or buy a version that's cheaper to maintain. 

It's also essential to consider total costs for any purchase that requires taking out a loan. If you can rent to own a $500 washing machine for the "low cost" of $50 a month for 24 months, for a total of $1,200, you're getting a really bad deal. That's an extreme example, but there are many situations where salespeople prompt you to look only at how affordable the monthly payment is -- such as when you buy furniture on credit or take a car loan.

Don't fall for this trick -- find out how much you'll pay in total to buy the item, and pay attention to how long you'll be stuck making payments before you decide if it's worth it.

17. Set a per-use spending limit

Another good way to make sure you're limiting your spending to things you get value from is to set a per-use limit and figure out how much each item you're considering costs per use.

For example, you may set your per-use limit at $1.

When you look at a product you're considering, think about how many times you'll use it and divide the price by that number to see if it fits in your per-use limit. If you're thinking about buying a $500 TV that you'll use once per day for the next two years, you'd get 730 uses out of the TV. Divide the $500 price by 730 uses to see your per-use cost of $0.68 -- well under your $1 maximum.  

18. Link saving with splurging

Trying to completely cut out splurges from your life is likely to backfire and will probably make it impossible for you to stick with your budget.

Instead, allow yourself the occasional splurge -- but set a rule that you'll link the expenditure with accomplishing a savings goal. For example, your rule may be that for every $50 impulse purchase you make, you'll move $20 into your savings account. When you do that, your random spending turns into an opportunity for you to set aside money for future goals. And you can only make purchases if you also have enough cash to invest for your future. 

19. Plan free activities 

Cutting spending doesn't have to involve cutting the fun out of your life. There are plenty of free ways to enjoy yourself, from going to no-cost concerts in the park to taking a walk with a friend.

Instead of scheduling activities that prompt you to spend money, such as going to the mall with a buddy, focus on doing free things instead. The more you pack your life with entertainment that costs you nothing, the less time you'll have to waste money buying stuff you don't need. 

20. Enlist the help of an accountability buddy 

Sometimes, it can be hard to stay motivated to cut spending on your own. Make a deal with a friend or a spouse that you'll support each other in your efforts to reduce your expenditures.

That doesn't mean your buddy will chastise you if you slip up. Instead, the goal is to have someone to report to on your progress. When you know you're checking in with a friend who's rooting for you, you'll be far less likely to break your spending limits. 

Cutting spending doesn't have to be hard

Chances are good that at least some of the suggestions on this list will work for you and help you spend less money. By reducing your outflow and directing more money to financial goals, you'll be more successful in saving for big things so you can grow your net worth and build real wealth over time. It's worth the effort. 

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