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how to reduce spending

How to Reduce Spending: Your Ultimate Guide to Saving Money

In this article I will discuss more than 20 ideas for how to reduce spending so that you can have more money available for the things that will help you reach your financial goals and ultimately lead to your financial freedom!


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Tips for How to Reduce Spending

If you are serious about changing your financial future then one of the best things you can do to help you to accomplish that goal is to reduce spending.

That is simply because even though the best way overall to change your financial trajectory is to gain needed knowledge and skills and increase your income, you will always outspend your earnings—no matter how high they become—until you learn to control your spending to live on less than you make.

Two important factors that can help you to reduce your spending include identifying your financial why and learning to be content with who you are and what you have. Two additional essential stops on the path to financial well-being are creating a written budget or spending plan and really distinguishing between needs and wants, which will allow you to find areas where you can begin to really reduce your spending.


Reduce Spending by Eliminating Nonessential Expenses

As part of your money-saving strategy, you might want to cut some nonessential expenses and bills altogether (see ideas below), at least for a time while you’re working to get out of debt or working toward other financial goals with full intensity.

Remember, the more intense you are willing to get to reduce your spending, the faster you will see results. When I know I want to lose 20 pounds, personally I’d much rather cut out sweets and really rev up my exercise routine to lose those pounds in two to two and a half months, rather than going at the more leisurely (and admittedly easier) pace of four or five months or six months. I’d rather have the quicker results because then I can really see progress and it keeps me motivated and I know I’m only sacrificing for a relatively short amount of time (and I don’t have as high a risk of my willpower giving out on me).

And so to me it’s worth the greater level of sacrifice. So consider if going hard core in a similar way with your finances might help you to be more likely to stick with your plan and reach your financial goals.




How to Reduce Spending by Cutting Some Areas Completely (for a While)

To really reduce spending, go for a certain amount of time without spending any money at all in some areas.

This method for reducing spending is sort of a twist on a no-spend challenge, where you simply decide that for one week or one month or six months or one year you’re not going to buy a particular item or do a particular thing that costs money. Some of the areas where you could drop your spending down to zero, at least for a while, might include the following:

Eating out

One of my best tips for how to reduce spending is to spend less money eating out.

The average American family spends about $3,000 a year on eating out. Even though you’ll have to replace some of that cost with the cost of buying food to eat at home, the savings here can be amazing. (To learn how to save money on your grocery shopping, read this article with more than 50 ideas for how you can slash your grocery spending.) For more than 10 years we’ve spent less than $200 a year on eating out for our family, and I know that that has been part of the reason that we’ve been able to reach other financial goals that we’ve set. Read this article to learn how to save money eating out.


Another great way to reduce spending is to spend less on clothing.

It’s likely that you have enough clothes in your dresser and closet to last you for the next six months or year or maybe even longer. This is another area where the potential savings can be huge.

Even if you simply reduce your spending by buying essential clothing items on sale, from second-hand clothing stores such as your local Goodwill or similar thrift store, or from other budget-friendly clothing stores or online sites like eBay, you can save a significant amount. To learn how to save money on clothing, read this article.

Cable or satellite

There are a lot of free or cheaper alternatives to cable and satellite that can help you reduce spending, so try pulling the plug on these services and banking the savings. With digital TV through a standard antenna, there are many channels available just on your regular TV. If you haven’t checked them out for a long time, you should!

And if you can be a little patient, the library also carries many of the programs you regularly watch, for free. You can just check out movies and shows like you do books and other materials. (That’s what we do! We haven’t had TV since we moved to our current home almost eight years ago now.) But if neither of those options works for you, you can try Netflix, Hulu, Sling, or other similar options.

Magazine, newspaper, or online subscriptions

For those you don’t use, and even those you do, cancel them in order to help you reduce your spending. You can likely find free versions or similar free offerings online.


Gym or club memberships

Same thing applies here. Especially for those you never or rarely use, cancel them. Even if you do use them regularly, at least look into free or cheaper alternatives. For example, maybe your workplace has a gym and might even offer free fitness training, so why are you paying for a membership and personal trainer somewhere else? (And yet I have coworkers who do just that because they didn’t know that we have free fitness trainers available at our on-site gym.)                 

Auto insurance and registration on an extra or seldom-used vehicle

If you have a third or second vehicle that rarely gets used, you might cancel these services or even sell the vehicle to help reduce your spending.

If you really don’t use the car often, you’ll likely save money by looking to other options such as using a bike (or walking) or using public transportation, using a service like Uber or Lyft, or even renting a vehicle for the few days or week or whatever time period for the few times a year when you really need a second vehicle.

You could also look at earning extra money by becoming a driver for Uber or Lyft (or both!).

Read this article to learn more about how to reduce your transportation expenses.

Furniture and appliances

When you’re working to reduce your spending in order to stop living paycheck to paycheck or to get out of debt or reach other financial goals, avoid purchasing furniture or appliances unless something essential breaks that you need to replace.

Try repairing it first if you can save money that way, and if you have to replace the item, buy it used from a used appliance store, Craigslist, or your local online classifieds.

Electronics and toys

I know that it’s fun to have the newest iThing or the latest video game or motorcycle or ATV or game system, but so is financial security! So is watching your debt go away and your net worth grow! And so is doing one of many, many free things that don’t involve gadgets or toys at all.

Even if it’s something for your kids, you can refrain. So to help you reduce your spending, cut down on the number of electronics and toys that you buy for yourself and for the family.


Important tip for parents: I know for some of us it’s harder saying no to our kids even than saying no to ourselves, but even fairly young children can understand why you can’t buy something if you explain that you’re working toward other important goals instead. In fact, I know of instances where parents have explained their financial situation to their kids, and the kids are sometimes the ones to keep the parents in line and remind them not to buy something because it’s not in the budget or because they’re working toward something even more important!


Reduce Your Spending in All Other Spending Areas

Once you look at what areas you can cut completely from your spending for a time, also look at spending areas where you can reduce spending.

There are many other areas where you maybe can’t (or won’t want to) eliminate the expense altogether but you can reduce your spending—in some cases, substantially. Here are some examples.


Food is one of the areas where most people can reduce spending and save a lot of money if they choose to because there are so many options involved and because the difference between what is expensive and what is cheap is so drastic sometimes.

For example, the local discount store where we buy most of our groceries regularly sells frozen boneless skinless chicken breasts for $1 a pound. And yet you can also easily spend $5 to $10 a pound or more on expensive cuts of meat or seafood.

The same goes for produce in season versus produce that is not in season. This article shares more than 50 ideas for reducing your food spending. And if you don’t want to cut eating out completely from your budget (for a time), then you can still save money eating out.


Another potentially huge way to reduce spending is by reducing your housing expenses.

If you own a home you should look at whether your house is eating too much of your monthly income. In order to meet other important financial goals, you should not have more than 25 percent of your after-tax income (and after deducting tithing or charitable giving, if you give a substantial amount) tied up in housing so that your budget won’t be too pinched.

If you have much more than that of your monthly budget tied up in housing expenses, then look into reducing your housing costs. (This may be the case if, for example, your household income has dropped since you purchased your home because of a reduction in salary or because one earner has left the workforce and you are now a one-income family.) In such cases you should look at moving if you are renting. and possibly even at selling your home if it’s unlikely that your income will increase significantly in the relatively near future.

You can take some time to make this shift, but if your house is a financial burden and the situation is unlikely to change relatively soon, then work toward selling your home and either buying or renting something less expensive within the next year or so.

Similarly, if you are renting a place that is costing more than about 25 percent or 30 percent of your income (since you won’t have the expense of home maintenance), you should see if you can find something less expensive to rent, particularly if you are also trying to save up money to purchase a home.

Read this article to learn more than 30 ways that you can reduce your housing expenses.



Saving money on transportation costs is another great way to reduce spending.

One of the best ways is to drive paid-for cars. The best make and model of car to own is the one that doesn’t have any payments. 🙂 Learn a simple method to buy cars with cash here. And also learn how to get out of an upside down car loan here.

There are also many other things you can do to reduce spending on transportation. Of course for the longer term you want a vehicle that is reasonably safe and reasonably comfortable and that you don’t have to worry too much about breaking down on you, but for the shorter term, if you have car payments on a vehicle and it’s really squeezing your budget and you can’t increase your income soon, and especially if you won’t likely be able to pay off the car in the next 18 to 24 months at the most, I would strongly encourage you to sell the vehicle.

Even if that means selling the car at a little bit of a loss (when you’re upside down on it), that is often the best way to go. Then to fix the situation, you can take out a small loan for the difference (between  what your current car is worth and what you can sell it for) if needed.

Then sell some stuff or work extra or even borrow a little extra money from your credit union or local small bank to be able to then buy a $1,000 to $3,000 car that you can get around in for a while.

This is often a good idea because having, say, $3,000 to $5,000 of debt on a personal loan and inexpensive get-around car is a better option than keeping a large debt—like $10,000, $20,000, $30,000, or more—on your current automobile. And then over time you can save up money to buy a more expensive car with cash.

You can also save a significant amount of money on gas by being intentional about your spending in this area. Download and use a free app such as GasBuddy to find the least expensive fuel in the area where you are driving.

To learn more about how to save up and buy a vehicle you can afford (with cash!) and to find more than 30 ways to save money on transportation expenses, read this article.



In order to reduce your spending you can lower your thermostat in the winter and turn it up in the summer. For example, many economists recommend setting your thermostat to 62 degrees during the winter and 78 degrees or higher during the summer. You can also look at reducing your water consumption (consider rockscaping or xeriscaping in dry climates, for example) and power consumption and so forth.

Read this article to find more than 30 ways to trim your utility bill.


Pet food and related items

There’s no denying that people can spend a lot of money (a ridiculous amount of money, really) on their pets. But being a pet owner doesn’t have to cost very much money, and it is pretty simple to reduce your spending in this budget category.

Beyond basic food (which in our area you can get for even a large dog for $40 a month or less and for a cat for less than $30 a month) and cat litter (less than $10 a bag) and the like, you really don’t have to spend much money on your pets. What they really want is your love and attention.


Cell phones

You can also reduce spending on your cell phone or smartphone by not paying for features and services you don’t use.

And if you really need or want to cut your monthly expenses, trade your smartphone for a cheaper smartphone service (such as Republic Wireless or Mint Mobile or especially Xfinity Mobile [where your monthly bill can be as little as $3.51 a month per line—like ours!]) or for a basic cell phone. Learn how we pay just $3 a month per smartphone line here!

Or trade your cell phone service for a very cheap pay-as-you-go cell phone service such as TracFone or even a super cheap internet home phone service such as ObiTalk.

For more information on how to reduce your cell phone bill, read this article.

To save money on your monthly landline, if you still have one, check out an internet phone service such as ObiTalk (the cheapest option and the one we have), MagicJack, or Ooma.


If you’re paying more than $40 a month, you can likely reduce your spending on your internet bill. Even though you might not get super high-speed internet for that price (at least, not without bundling with other services you don’t need), and even though super high-speed internet is really convenient (so I’ve heard—we’ve actually never had it!), so is money in your wallet.
*UPDATE*: We do have higher-speed internet now, from Xfinity, for $40 a month. That’s the introductory cost; it will be $65 a month after the first year—but you can be sure we’ll work to see if we can get that lowered!

Alarm monitoring

For a low-cost, no-contract alarm monitoring service that doesn’t require a home phone service and that has great customer service and great reviews, I highly recommend SimpliSafe. We’ve been using them for almost eight years now, and we pay just $14.99 a month total. It’s great!

Car maintenance and repairs

To reduce spending on car repairs, be sure to shop around among the mechanics in your area. Do this before you need the work done so you won’t be in a bind and needing the work done right away. Look into Craigslist and your local classifieds. We’ve saved a lot of money and had good experiences (fortunately, no bad experiences so far) by going with independent mechanics who do auto repair work on the side.

And for minor repairs and part replacement, if you are a little bit mechanically inclined, or have a family member or friend who is, try looking up how to do the repair on YouTube. And buy your parts from RockAuto! We learned about them from one of the independent mechanics we’ve used, and they are so much cheaper than even the big-box auto parts stores—like, often 50 percent cheaper or more. So check them out. I give them two thumbs way up!

Read this article for my best tips on how to save money on car maintenance and repairs!

Gift giving

You may also want to look carefully at reducing your spending on gift giving. If your budget is really tight, explain to your friends and family that you’re going to have to postpone spending money on gift giving for a time.

If you do it with the right spirit, and if they’re truly your friends or if your family relationship is a healthy one, they’ll understand and they won’t worry about it. Your participation in the special event (wedding, birthday party, or the like), not a gift, is what truly shows your love and support.

Check out this article to learn about saving money on Christmas and other gift giving.

Personal spending money

While you’re working to build more room in your budget (by decreasing your expenses and increasing your income), you might want to significantly reduce or even cut for a time your personal spending money (your fun money).


Another area where you can reduce your spending is with entertainment. To save money on entertainment, find things to do with your spouse or family that are free or cheap. There are so many fun activities that you can do for little or no money that reducing spending in this area really isn’t very hard. Check out this huge list of fun free and cheap activities that you can do with your family.

And also read this article on other ways that you can save big on entertainment.


To save money when vacationing, try going on a stay-cation, where you vacation at or near your home. No matter where you live, you can find tons of fun things to do in your own backyard! Chances are there are tons of things that travelers come to your area to do that you have never done—so check them out!

You can also save money by staying at people’s homes through Airbnb and by staying in hostels. And by camping.

When you do travel, try staying at places through Airbnb or VRBO. We’ve been staying at places through Airbnb for the last couple of years, and it’s been great. It’s how we’ve done most of our vacationing during that time—even more than camping. Sign up for an Airbnb account and receive $40 to use toward your first stay. Pretty sweet!

Read this article to find awesome fun and cheap family vacation ideas. And read this article for more than 20 fun and budget-friendly summer vacation ideas.




I know that figuring out how to reduce spending isn’t easy—believe me. If it were easy, we would all be wealthy (at least eventually) and no one would live paycheck to paycheck.

But despite the fact that it is difficult, when you have a strong motivation and the right knowledge and tools, you really can reduce your spending and change your money habits to begin saving and investing and work toward achieving your financial goals and dreams. And I want to help you do it!



What are your best tips for how to reduce spending? I would love to hear your ideas! Leave a comment and share your thoughts!




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