How to Spend Less Money and Save More

Updated December 1^st, 2023.

A few years ago, I attended a top producer meeting at one of the nicest hotels in Boston, Massachusetts. Everything about the experience, from the service to the decorations, was impeccable!

While I have been blessed to stay at some of the finest hotels worldwide, this hotel made my A+ list. And it was the last place I would expect to get a message to spend less!

After a top producer dinner, I returned to my hotel to find a piece of Godiva® chocolate with a “Life Secret” note on my pillow.

The note said, “To live a happy life, spend less.” I had to laugh.

The nightly cost for this room was more than most people’s mortgage payments!

Even though I wasn’t paying for my room, most guests were. I wondered what the reaction of other guests was when they read the “Spend Less” message.

While I agreed with the note, I was blown away that a hotel of this caliber would share such a message. I couldn’t help but wonder if the person providing the “Life Secrets” notes to their guests had read them. Had the message been “build wealth,” I wouldn’t have been so surprised.

Living a Fulfilled Life

Learning how to spend less money is essential to living a fulfilled life.

The first step to spending less money requires determining where you currently spend your money.

A few years ago, a local television station selected me as the financial expert to assist two households near financial ruin.

One household was a family, and the other was a single woman living alone. In both cases, the primary problem was that the households needed to spend less.

Both households thought the solution was to earn more income. Neither knew which expenses were necessities (needs) or desires (wants).

Necessity purchases include your mortgage, utilities, gas, food, etc.

Want expenses are fueled by desires. Examples include toys, electronics, fancy cars, exciting vacations, etc.

One helpful insight to “spending less” is remembering that we do not need to own more stuff to be happy.

A new purse or suit is not the secret to happiness. You may be saying, “What?” But most people want the “rush” when they spend money. Often, it is an emotion such as happiness or peace of mind, i.e., you would be happier if you had more income.

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Beliefs

But the fact is that this is simply a belief-not reality. The truth is that you can be happy in your current home or without that fancy purse.

While the initial dopamine rush will give you a short-term high, the long-term ramifications of overspending and not saving can be devastating.

This can show up as depression, anger, and worry (Unless your retirement goal is to be a Walmart greeter!).

Early in my career, a mentor shared, “People who shop in the malls have holes in their souls.”

She meant that when people need to buy things to be happy, they cover up a void in their lives. Because something is missing, they are trying to fill it.

For example, some people do drugs and drink excessively to fill a void. While buying a new suit may make us feel good for a brief period, the long-term effect wreaks havoc on our financial future.

Tips on How to Spend Less Money

Reduce or eliminate credit card debt

If you have any consumer debt, such as credit cards, make it a priority to pay those off. Begin paying off debt with high-interest rates. Continue to pay down consumer debt.

Create a shopping list

This is especially important when you go grocery shopping. Another helpful tip is never to go to the grocery store on an empty stomach.

Cancel services you don’t need or use

Are you still paying for that gym membership you haven’t used in six months?

Do you really need two streaming services?

Ask for discounts

Services that have competition often provide discounts if you ask for one.

Examples include cell service, cable, internet, trash collection, lawn service, etc.

Simply call and ask if you can get a discount. If they believe you may leave and use a competitor, they will often give you a deal to stay with them.

You can also ask for discounts on services you need. This may include yard work, painting, new flooring, plumbing, etc.

Use discounts available to you

Use discounts such AARP, AAA, military (including ex-military) and senior discounts for everything from travel to movie tickets. Many credit cards and retailers offer discount connections. Make sure you do not spend money with the justification you are saving because you get a discount.

Analyze your mortgage

Before you refinance your mortgage, make sure it makes sense. Also, request an amortization from your mortgage company showing one extra payment per year. Because this payment is all principal, it is typically a great idea.

Review your car insurance

Could you save money with a different company?

Do you have the right deductible?

If you have an emergency fund, could you afford a higher deductible?

Evaluate your savings account

If you have a savings account, could you switch to a higher interest-bearing account?

Would a budgeting app help you better track expenses and spend less money?

A great money-saving idea is to purchase clothes and other items at consignment or thrift stores.

Consider a spending fast

Most people have heard of a food fast, but what about a spending money fast?

Consider not using your credit card for 30 days. This often makes people aware and helps them spend less and save more.

How to Spend Less Money with the 3-Day Rule

Pay attention to where you tend to spend money. Is it online shopping or when shopping with friends? If you impulse buy, apply the 3-Day Rule.

The 3-Day Rule is a process called “How to Spend Less Money.”

When we buy spontaneously without a plan, it can wreak havoc on our budget and savings goals.

Over time, it leads to a broke, miserable retirement that is anything other than the “golden years!”

If you want more insight on the 3-Day Rule, click here.

Create a Spending Plan

The first step to creating a spending plan is to review your budget. If you need a budget template, you can access one here: Budget Template.

You need to make a list of your monthly expenses. This includes “need expenses,” such as mortgage, utilities, insurance, essential food, etc.

It also includes “want expenses.” These are expenses that you want but don’t really need. Examples include dining out, entertainment, daily coffee, travel, another pair of boots, or a designer bag. Want expenses often wreak havoc on your spending plan and cause you to save less than you want or need to.

If you tend to overindulge in behaviors such as overspending, overeating, etc., click here and listen to Money and a Dopamine Hit.

Once your list is complete, review each item individually. Are you spending more money on necessities or desires? Perhaps you need to re-evaluate your spending habits and determine where you allocate your funds.