7 effective tips for reducing your expenses


Follow these steps to identify unnecessary purchases and help lower your expenses.

It’s possible to have confidence in your budget, even in uncertain times. These seven steps can help you get a better handle on your money—and save for a brighter future.

1. Know where your money goes

Writing down what you spend for a week has been found to improve financial confidence.Disclosure 1 So to become more financially resilient, you should track your expenses. That’s where budgeting comes in. Every budget begins with two key figures: your monthly expenses and your monthly income. Create a budget that tracks both your income and spending. This gives you a clearer idea of how your money is coming in and going out, and will allow you to evaluate your financial habits over time to see what kinds of patterns emerge. 

2. Create spending categories

With your budget in place, make a list of your needs, wants, and personal values—the things that matter most to you. Defining your values can help you budget for what’s truly important, whether that’s starting a business, giving back to the community, or spending time with your family. Essential items like rent or mortgage payments, groceries, and utilities will likely take priority over “fun” purchases, depending on your budget. Look at how much you’re spending on wants—nonessential items that don’t necessarily reflect your priorities—and consider what you can live without for now. 

3. Only spend on what matters most

Even though “fun” purchases may take a backseat, they can still be good for your mental health, so you should still include them in your budget. You can still save for and spend money on things that are aligned with your personal values, like buying flights to surprise family or saving money for a class you want to take. By following a budget based on your values, you’ll feel happier and more satisfied with your purchasing decisions,Disclosure 2 and it won’t feel like a chore to save money to achieve goals.

4. Make the most of “monthlies”

Recurring monthly costs can add up, so here are some tips to lower those expenses. Consider temporarily suspending your gym membership in favor of at-home workouts, pausing public transportation accounts, or opting for groceries over takeout or delivery services, which can be more expensive. Is there an app subscription you no longer need? It’s OK to keep services you may be using even more now (for example, if streaming video is really helping you pass the time). Make a list and decide if there’s anything you’re willing to put on hold.

Tip: Know your automatic payments.

  • Search email inboxes for recurring receipts or subscriptions.
  • Check for recurring payments and auto-drafts in your bank accounts.
  • Remember to look for quarterly and annual charges—not just monthly.

5. Eliminate impulse buys

Half of Americans say that they buy things they don’t really need.Disclosure 3 If your social scrolling usually turns into “Thanks for shopping,” find ways to cut down on unplanned purchases. Spontaneous purchases can derail your money goals. Be mindful of what triggers this most for you, like those 50% off emails from your favorite clothing store. Set an email filter so you don’t see them unless actively shopping. When an urge does strike, return to your list of values—if that purchase doesn’t align with your goals, click “Remove from cart” and focus on the bigger picture. 

6. Save on interest where you can

If you have a mortgage payment or a car loan, you know interest is a big part of your monthly payment. If money is tight, see if refinancing could help you lower your interest payments over time. Alternatively, if your income hasn’t changed, consider making an additional principal payment or two while other expenses are on hold. This helps you build equity, reduces the life of the loan, and minimizes interest paid. 

7. Consider deferment

Some financial institutions have introduced forbearance options like deferment of auto loans during this time. If you need to, check with your bank to see what options they can provide you. While you will have to pay later, this can help you lower expenses for the present moment. You should avoid deferment if you’re able, however, because you’ll still accrue interest during the deferment period, which ultimately results in you paying more money.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.