6 effective tips to help reduce your expenses and spending

It’s possible to have confidence in your budget, even when things feel tight or there’s uncertainty in the economy. These six tips can help you take charge of your financial well-being by finding ways to spend less, cut unnecessary expenses, and save more for emergencies and your future.

1. Know where your money goes.

Every budget begins with two key figures: your monthly expenses and your monthly income. Creating a budget that tracks both your income and spending can give you a clearer idea of how your money is coming in and going out, and will help you to evaluate your financial habits over time to see what kinds of patterns emerge. Keeping track of what you spend over time has been found to improve financial awareness and confidence. ^{Disclosure 1}

“I strongly recommend that you track every dollar you spend for a minimum of two months to see how accurate your estimates really are,” says Brian Ford, Head of Financial Wellness at Truist. “By keeping careful track of what you’re actually spending on, you may discover a feeling of financial control and awareness that surprises you.”

Technology may help with tracking and managing your expenses. Many banking apps, for example, offer insights on your spending. There are also apps created specifically for tracking expenses, and many budgeting apps offer features to help you track spending. Typically, you have to link all your accounts to the app for these to work. So if you decide to use an app, research it first to make sure it’s secure and trusted.

You can also review your monthly account statements and manually calculate your total expenses using a spreadsheet, document, or classic pen and paper. For some, manually entering each expense may help you fully acknowledge and be more mindful about where every dollar is going. And if you spend mostly with cash, it may make it harder for apps to accurately track your spending anyway.

2. Create spending categories.

Making a list of your needs versus your wants can help you find areas to cut back on spending. Essential items like rent or mortgage payments, groceries, and utilities will likely take priority over your wants. While you might not be able to cut these expenses out, it’s always good to price check your essentials to make sure you aren’t paying more for them than you have to.

And when you look at your non-essential spending, ask yourself, “Does it align with my personal values and goals?” Taking time to define your values can help you budget for the “wants” that bring you the most joy or fulfillment.

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. Following a budget based on your values may help you feel happier and more satisfied with your purchasing decisions. It may also help saving money for your goals feel like less of a chore.

“Money is only a means to a much deeper end—and it is not the only means in most cases. I value money as far as it can serve what really matters in my life and empower the people and causes I care about.”
–Brian Ford, Head of Financial Wellness, Truist

3. Review regularly recurring costs.

Recurring monthly costs can go unnoticed, but it can be easy for them to add up. Search your emails for recurring receipts or subscriptions, and check for recurring payments and auto-drafts in your bank statements. Remember to check for quarterly and annual charges, not just monthly. Make a list of those recurring monthly expenses and decide if there’s anything you’re willing to let go of or put on hold.

These are some options for reducing your recurring expenses:

• Gym membership: Consider temporarily suspending your gym membership in favor of at-home, outdoor, or free group workouts.
• Commuting costs: Talk with a coworker about commuting together to save on gas and vehicle maintenance.
• Food delivery subscription: Opt for grocery shopping over takeout or delivery services, which can be more expensive.
• Streaming services: If you’re paying for multiple streaming services, maybe you could start keeping just one of them active at a time.

4. Eliminate impulse buys.

Almost three-quarters of Americans have regrets about their spending.^{Disclosure 2} 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, whether it’s those 50% off emails from your favorite clothing store or that trendy influencer you follow on social media. Set an email filter so you don’t see them unless you’re actively shopping.

When an urge does strike, pause to think about your values. If that purchase doesn’t align with your goals, click “Remove from cart” and stay focused on the bigger picture.

5. Save on interest where you can.

If you have a mortgage or a car loan, you know interest is a big part of your monthly payment. If money is tight, you could see if refinancing could help you lower your interest rate or payments.

The rate you can get when you refinance a loan depends on many factors, including your credit score and the current interest rate environment. If you have high-interest credit card debt, you may also be able to save money on interest by doing a balance transfer to a new card or consolidating with a personal loan. If you do a balance transfer, be sure to have a plan for paying off the balance before the intro APR period ends. And if you consolidate with a personal loan, be sure you can manage the payments.

If the fees would add up to be too much or you’re already locked into a lower rate than you can get by refinancing, consider budgeting for additional payments on your loans. This may not free up more cash for you now, but in the long run, it can help you reduce the life of the loan, minimize interest paid, and potentially even build equity in the case of a mortgage.

6. Check in regularly.

Consistent financial check-ins can help you spot more opportunities to reduce spending and expenses over time. You don’t need one every week, but hosting a more formal review with yourself once a month, quarter, or every six months may help you stay motivated as you work toward your long-term goals. Measure your net worth—which should grow as you reduce expenses—as a way to gauge your progress during these check-ins.