How to Spend Less Money: 6 Tips to Shop Smarter and Save More

It's all too easy to find yourself spending more than intended—whether it's on groceries, entertainment, or online deals that seem too good to pass up. But saving money doesn't have to mean cutting out all the fun. By adopting smarter shopping habits and making a few mindset shifts, you can enjoy the things you love while keeping more money in your pocket.

From budget hacks to mindful spending, here’s how to spend less, take control of your finances, and watch your savings grow.

How to spend less money: 6 smart shopping tips

How to cut down on spending? The answer is not as drastic as you might think. Smart shopping doesn't mean cutting corners; it means making informed choices that maximize your savings without sacrificing quality. 

These practical tips will help you spend less while still enjoying life.

1. Plan your purchases ahead of time

Impulse buying is a major budget buster. To combat this, planning your purchases ahead of time can be a game-changer. 

Make a list: It may feel old-school, but it works. Before heading to the store or shopping online, make a detailed list of the items you need—and don’t stray from it. If you see something else you need while you’re out, add it to a new list for your next shopping trip. This helps you stay focused and minimizes the chances of buying things you don’t really need.

Use your cart: For items that are not urgent but you would like to buy online in the future, add them to your shopping cart—then log off. Let the items sit for a while, and evaluate if you still want them after some time has passed (preferably, at least overnight). 

Do your research: Compare prices across different retailers, read product reviews, and check for any available coupons or discount codes. Look for this information on coupon aggregator sites, price comparison platforms, and directly on retailer websites.

2. Use cash instead of cards

Swiping a card makes spending money almost too easy. Transactions are quick and convenient, often leading to less mindfulness about how much you're actually spending. So if you’re strategizing how to spend less at the grocery store, the pharmacy, or the big-box store,  consider using cash for your everyday purchases. 

When you use cash, you physically see the money leaving your wallet. This tactile experience makes you more conscious of how much you’re spending and will encourage you to think twice before making a purchase. It’s harder to overspend when you can see your remaining cash dwindling.

Using cash also eliminates the risk of accruing interest or incurring fees associated with credit card usage. That means you’ll automatically sidestep the potential debt and interest charges that can add up over time—which will save you money.

3. Get that deal!

Take advantage of sales and clearance events. Most retailers have predictable sales around holidays or at the end of seasons. Patience can literally pay off when you're able to score deals on items you’ve been eyeing for a while.

Clearance events, where retailers clear out old or excess inventory, are great opportunities for shoppers to find deals on items that may no longer be in high demand—but it’s important to act quickly, as quantities are usually limited and the sales are often final. These can occur at the end of a season, after a holiday, or when a store is discontinuing certain products. 

Use price comparison apps, like ShopSavvy, which allows you to scan barcodes and QR codes to compare prices across multiple retailers, or CamelCamelCamel, an app that tracks the price history of products on Amazon, allowing you to set alerts for price drops. Also, there are some browser extensions that alert you to discounts. A very popular one is Honey, which automatically finds and applies coupon codes at checkout,

4. Buy in bulk—-when it makes sense

Purchasing larger quantities of a specific product in bulk is a money-saver because you’ll typically pay a discounted price per unit. This strategy is commonly used for non-perishable items, household essentials, or items you use frequently.

However, it’s important to ensure that you actually need and will use the items before they expire or become obsolete, as buying in bulk can lead to waste—and wasted money—if not managed properly.

5. Be mindful of brand loyalty

Brand loyalty refers to a consumer's preference for buying a particular brand's products or services over others, often due to positive past experiences, trust in the brand's quality, or emotional connections. 

But the flip side of that is when brand loyalty leads you to ignore options that may cost less but be just as effective, useful, or delicious.  

Generic or store-brand items often offer the same quality as name-brand products at a fraction of the cost. In fact, a report by Consumer Reports has shown that generic products can cost, on average, 20% to 30% less than their name-brand counterparts. By being willing to try different brands, you can save significantly without sacrificing quality.

6. Take advantage of loyalty programs and rewards

Many retailers and credit card companies offer reward or loyalty programs—which are basically just popular marketing strategies—to encourage repeat customers. These programs typically involve customers signing up for free or purchasing a membership, after which they earn points, cashback, or other benefits for each purchase they make.

When they’re free, there’s every reason to sign up for these programs and receive discounts and access special promotions. If they’re not free, calculate your potential savings vs the cost of the program, using your typical usage history over the past month or six months or whatever time frame makes sense to you. The membership savings might outweigh the cost of enrollment. 

How do I train myself to stop spending money?

We know it’s easier said than done. Consumerism is such a significant part of our society, cutting down on spending can be challenging for many. Like many habits, it requires the development of mindful spending practices.

• Shift your mindset: Moving from instant gratification to long-term satisfaction can make a significant difference in your spending habits. Ask yourself whether a purchase is truly necessary or if you can wait to save up for it.

• Practice mindful spending: “Evaluate the value of your purchases by considering how often you’ll use an item and whether it’s worth the investment,” says Emma Davidson, a financial advisor and high-risk payment consultant. “Also, avoid emotional spending and stick to your budgeting goals and priorities.” 

• Embrace minimalism: Wondering how to spend the least amount of money possible? Decluttering your life can lead to clearer financial goals and reduced spending. When you prioritize quality over quantity, you’re more likely to make thoughtful purchases that truly enhance your life, rather than buying items that clutter your home or drain your wallet.

• Stick to your budget: Even when your income increases, avoid upgrading your lifestyle excessively, as it can erode your financial gains due to inflation. Instead, funnel the extra money into savings or investments. 

“Also, regularly review your budget and spending habits to identify areas for improvement and adjust financial goals based on changing priorities or unexpected expenses,” Davidson says. “Seek advice from financial advisors to optimize spending and savings strategies.”

Budgeting strategies and tools to keep you on track

There are effective budgeting tools that are essential for managing your finances and staying on track with your financial goals. By using the right tools, you can gain control over your spending, monitor your progress, and make informed decisions to achieve financial success.

Here are some resources that could help you manage to save money:

The 50/30/20 rule

What is the 50/30/20 rule? It is a simple budgeting framework where 50% of your income goes to needs (like rent and groceries), 30% goes to wants (like dining out and entertainment), and 20% goes to savings and debt repayment. This method helps you balance spending and saving without feeling deprived.

The 30-day rule

What is the 30-day rule? It is a technique where you wait 30 days before making a non-essential purchase. This waiting period helps curb impulse spending and ensures that you only buy items you truly want or need.

Use budgeting apps

If you want to know how to save money like a pro, you can use technology to make budgeting easier and more effective. Apps like Mint, YNAB (You Need A Budget), and EveryDollar help you track your spending, set savings goals, and stick to your budget. These tools offer real-time insights into your financial health, helping you make informed decisions. 

(Here are our picks for the 10 budget apps to consider in 2024.)

Set up automatic savings

Automating your savings is one of the easiest ways to ensure you’re consistently putting money aside. Set up automatic transfers from your checking account to your savings account each month, so you’re saving without even thinking about it.

“Plan for major expenses; create a sinking fund for anticipated expenses like vacations or home renovations,” Davidson says. “Start saving early and set aside funds regularly to avoid financial strain.”

“Pay yourself first”

Before you spend any of your paycheck, set aside money for savings or investments. This approach—often referred to as the 80/20 rule or Pareto Principle—ensures that you prioritize your financial goals over discretionary spending.

Additional strategies to save money

Get creative with your savings! These clever ways to save money can help you stretch your dollars further and make the most of your hard-earned money:

• Cut subscription costs: Subscriptions can add up quickly, especially when you forget about them. Regularly review your subscriptions and cancel any you no longer use. A good strategy is to share subscriptions with family or friends to split the cost.

• Cook at home more often: You want to know how to spend less money on food? Well, dining out or ordering takeout can be a significant drain on your budget. Cooking at home allows you to save money while also making healthier choices. Plan your meals in advance and shop for ingredients in bulk to maximize savings.

“Also, pack your own lunch!” says Ethan Keller, President of Dominion, a global network of legal and financial consultants. “By bringing food from home, one can save $10 daily and keep their health fit. It can even build an emergency fund or greatly contribute to saving money for a bigger purpose.”

• Negotiate bills and services: Don’t be afraid to negotiate the cost of services like cable, internet, or insurance. A simple phone call to your service provider could result in lower rates or better deals. Always compare prices with other providers to ensure you're getting the best value.

• Consider buying secondhand: Buying refurbished items can save you a lot of money without sacrificing quality. Whether it’s clothing, electronics, or furniture, shopping pre-owned is a great way to stretch your budget.

• Travel with a budget: “Avoid the peak seasons; this will not only save you money, but you will avoid all the tourist crowds as well,” says Will Hatton, founder of The Broke Backpacker. “Explore the less popular destinations, you will be surprised at how cost-effective they can be!” 

• Limit your online shopping: Try setting specific days for online purchases or use the 30-day rule to limit impulsive buys. Additionally, unsubscribe from promotional emails and notification apps to reduce temptation.

Saving money doesn’t have to be a chore. By incorporating these tips on how to actually spend less money into your daily routine, you can shop smarter, spend less, and still enjoy life’s little luxuries. Every small change adds up over time, helping you achieve your financial goals with ease.

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