How To Stop Spending Money: 5 Simple Ways Save More Money Each Month
It’s impossible to go through life without spending money, but spending money on necessities isn’t a problem for most people. Overspending, however, kills most people’s chances at a bright financial future. And those people spend a lot of their lives trying to figure out how to stop spending money and start saving.
Did you know that crippling student loans and underwhelming wages have the average millennial with over $40,000 in debt? A depressing percentage think they’ll die before they’re able to pay it off, meaning their kids will be saddled with double the debt.
But there’s a way out, and it needs to start immediately. Making just a few simple moves with your money – the way you spend it and the way you save it – could put you on the road to financial freedom.
How To Stop Spending Money
Here are a few simple ways to reduce your monthly spending so that the bulk of your paycheck goes into savings and not someone else’s pockets.
Make Sure You’re Getting The Best Deal On Everything
A straightforward way to reduce your spending and save more money is to audit all your bills yearly to ensure you’re getting the best possible deals.
If you’re not, it’s time to renegotiate. If you don’t want to spend the time doing that, then outsource it to a company like Truebill. They will do all the work for you.
When people purchase anything, they try to get the best deal available. Unfortunately, the best deal doesn’t always stay the best deal. And some recurring subscriptions might sneakily go up over time (cable, Netflix, security services, etc) so stay on top of it. Your bank account will be happy that you did.
Do A Deep Dive Into Your Monthly Spending
After you’ve found the best deals, audit exactly where your money goes each month.
This is one of the biggest mistakes people make with money is turning a blind eye to the ways we spend our paycheck each month.
Are you dropping $60-$100 each month a gym membership but barely step foot in the place? How many subscriptions services show up on your monthly statements that you don’t recall ever signing up for?
Here’s a good rule of thumb on your monthly spending from personal finance expert Ramit Sethi.
He told Business Insider that “people should budget 50 percent of their income on food and shelter, put another 5 percent toward investments” and the rest, well, that’s the portion that can be used with wild-eyed gusto.
Take a good, long look at where you spend your money. Especially if you’re prone to putting things on credit cards. If you need to use a tool to do this for you, check out Personal Capital. It is a free tool to help you track not only your finances, but your investments as well.
Adopt The Envelope System (Or Any Budgeting System)
“Everyone wants to be thin, but nobody wants to diet. Everyone wants to live long, but few will exercise. Everybody wants money, yet seldom will anyone budget or control their spending.” – John C. Maxwell
The main takeaway from that Maxwell quote is this: No one is coming to save you. It’s on you to save money and to not overspend. So use whatever tools you can to stay on track.
The envelope system, which is hailed by debt-hater Dave Ramsey has helped countless people eliminate debt without feeling overwhelmed by the process.
The crucial point with the Dave Ramsey envelope system or any other you might use isn’t the way you budget but just sitting down and developing a budget and STICKING TO IT.
If you’ve never done a budget before, it’s not as painful as it sounds, and you don’t have to eliminate things you love doing.
Have no desire to use the envelope system? Fine by us. Here is another guide to budgeting that will have you on the right path by the end of the day.
Start Your Savings With Just $1
If you’re terrible at saving money, or want to save more but just forget every month, this simple savings hack starts with only a dollar and will accrue over $1,300 in just one year. It is called the 52-Week Savings Challenge.
Here’s how it works:
“This savings hack is simple – week one put $1 into a savings account. I recommend an actual account so that some interest can be accrued and to resist the temptation of taking the cash when you want to buy something dumb like a $7 coffee. If you don’t want to start another bank account, put the money into a jar. Super glue the top shut to keep your grubby hands out.
In week two, put $2 into savings. On week 3, $3, and so on for 52 straight weeks. By the halfway point of 26 weeks, you’ll have $351 in savings. After 52 weeks, you’ll be counting a cold, hard $1,378.”
If you want to up the degree of difficulty from the start, do the 52-week savings challenge in reverse. In week one, put $52 into the account and work down each week.
Don’t Fall Victim To FOMO
FOMO – fear of missing out – is going to send millions of people to the poor house.
According to Credit Karma, people of a certain age are spending absurd amounts of money and going into debt just to give off the appearance of living the baller lifestyle.
The credit score website polled over 1,045 U.S. consumers and found “nearly 40% of millennials have spent money they didn’t have and gone into debt to keep up with their peers.”
The easiest ways to avoid is to drastically reduce the time you spend on social media, don’t spend money you don’t have by putting purchases on credit cards and learning the freeing power of the word “no.”
The core issue for millennials is the inability to say no to having a good time, even if they can’t afford vacations, weeklong concerts or trips around the globe.
Over 27% of millennials polled admitted to “feeling uncomfortable saying no” to friends suggesting activities they can’t afford. An uncomfortable number of young adults, 39%, have gone into debt to keep up with their friends. And not shockingly, nearly three-quarters have kept their money issues a secret.
If you’re not good at saying no, here are some tips from some of the most successful people on the planet.
Follow these five simple steps to spending less and saving more money, and you should be able to dig yourself out of debt in less time than you think.
Need even more help than that? Then your next stop should be our guide on Frugal Living Tips. It’s bound to help you sort out your finances and get your spending under control.