20 clever ways to reduce expenses and increase savings

Are you having trouble keeping money in your pocket? The answer lies in how you choose to spend it not how much you make. There are clever ways you can use to reduce expenses and increase your savings. This article has all the money tips you can use to achieve this goal without breaking a sweat.

“IT IS NOT ABOUT HOW MUCH YOU MAKE, IT IS ABOUT HOW MUCH YOU KEEP.” Anonymous

If you are interested in reducing expenses and taking control of your finances, keep reading. This article has over 20 ways you can use to reduce your expenses by shopping the smart ways.

Table of Contents show

1. Make a list before you shop

Making a list is probably the most important thing you can do to reduce expenses. A list will remind you of what you went to the market to buy. But this is not the only thing that makes a list helpful when you want to reduce your expenses and increase your savings.

When you are making a list, you are not under the influence of emotional attachments to a particular product. In other words, you write down only what you need at that particular time. This is very important when it comes to cutting down your expenses.

You don’t sit down at home and decide to spend more money than you are supposed to. Instead, you go to the market and your thoughts get overwhelmed by good-looking products, cute toys, your kids beg for something, etc. To avoid all these temptations, make a list when you are at home and shop only what you wrote on the list.

With a list in your hand, nothing will convince you to spend more than you are supposed to. Next time you go to the market whether online or in person, make a list of your needs and only order what you wrote down. You will be surprised by how much you will save a few months later.

2. Make a budget

Just like a list, a budget will be your guide to avoid unnecessary expenses. Your budget is nothing other than a quantification of all of your incomes, expense, saving plans, etc.

Your budget should list exactly how much you will be spending on each expense such as food, water, rent, etc. As you go through your shopping and other adventures, you must consistently look at your numbers and see where you stand. Your main goal, in this case, is to spend no more than you listed on your budget for each item.

If you really want to reduce your expenses, make a budget and stick to it. Do not be like other people who make budgets and never look at them again. According to CNBC, 79% of people who make budgets fail to follow them. That is a huge fail percentage considering the importance of a budget.

In order to succeed at reducing your expenses, make a budget and stick to it. There are two stages of proper budgeting: (1) making a budget and (2) following your budget.

Most people succeed at stage (1) where they create a budget. Stage (2) turns out to be difficult. If reducing expenses seems important to you, stay disciplined and save that money.

If you want to learn more about proper budgeting strategies, the following articles will be your ultimate guide.

3. Re-evaluate your priorities

The direct effect of reducing your expenses is saving money. There is a reason you want to reduce your expenses. Maybe you want to save money for a down payment or just increase your monthly payments toward your student loans.

You need a reason that will always remind you to keep more money in your pocket. Without a reason, it will be difficult for you to stay disciplined on this journey.

Understanding what is important for you is very crucial. What do you care about the most? Find that one reason you need to save and start cutting down your expenses. It will be much easier knowing that there is a real reason you are saving money.

4. Cut down your utility bill

clever ways to reduce expenses — Photo by Robert Linder on Unsplash

One of the best ways to reduce your expenses is to pay less for what you need. A need is a need and you cannot stop it or put it on hold. The only thing you can do is to reduce how much you pay for it.

One of the things you must pay for no matter what is your utilities. The good news is that there are ways you can reduce this bill to almost nothing. The following are some of the tips you can use to lower your utility bill and reduce expenses in the process.

Use smart appliances
Unplug electronics when they are not being used and/or when they are full
Do not use your dishwasher
Use smart thermostat
Change to energy saving lights
Use your ceiling fan to lower your house temperature
Open your windows for temperature regulations
Use your appliances when energy cost is low
Do not run your water unless you are using it
Consider meal prepping for a weak to avoid cooking very often
Sun dry your clothes
Participate in energy programs

For more details on how to save money on your utilities, use the following article.

5. Reduce expenses by getting rid of most of your subscriptions

This might sound funny but it is true that you are spending a lot of money on subscriptions. If you do, I can’t blame you. There are so many streaming services, online subscriptions, and much more that are designed specifically to take the money out of your pocket.

Without strong discipline and a strong desire for success, it would be difficult to resist the temptations. If reducing expenses in order to save money for what you care about, it will not be a big problem for you to cut off some of these subscriptions.

The following are some of the most common streaming services that make you poor every day.

Hulu
NETFLIX
Amazon prime
HBO
Online video games subscriptions
Online newspaper subscription
Mobile phone applications memberships
Shopping sides memeberships
Music subscriptions such as pandora, sportify, itunes, etc.

The sad truth is that there are people out there who have all these subscriptions. On top of that, they still buy movies and songs from private parties. They are paying monthly memberships to watch those movies and still pay extra money to buy them.

You need to cut down on these subscriptions. This does mean that you need to get rid of all of them. What you can do, instead, is to have one of these subscriptions if you cannot close them all. For example, you can have Netflix and close other movie streaming subscriptions. This will help you watch movies and tv shows and save you money at the same time.

6. Avoid brand name products

One big mistake many people make that costs them a lot of money is to buy brand-name products. They think that using products with highly publicized names increases their happiness or makes them feel superior.

What they don’t know about, however, is that for every brand-name product they buy; they get closer into deep financial troubles.

What is wrong with brand-name products? Brand-name products are priced much higher than generic products and they don’t have extra healing power or extra nutrition. In addition, they don’t taste better than generic products.

In order to save money, you need to stop buying brand-name products. It is also important to remember that generic products achieve exactly the same functionalities. The only difference is that bran-name products are more advertised, and therefore, cost more.

7. Use credit cards with cash backs/mile points or other benefits

Reducing your expenses does not necessarily mean that you need to give up what you love to be happy. A clever way to get what you want and pay less money is to take advantage of the tools you have at hand.

The most money-saving tools you have right now could be your credit cards. Credit cards are very tricky and require discipline to properly take advantage of them. Many people have gone bankrupt and others are drawing in debts due to credit cards.

If you use credit cards wisely, however, you can save a lot of money. That is you must spend less money on them and pay off every penny before the due date of each payment period.

More reading: 9 Things to know before getting a credit card

If you choose to use your credit cards wisely, the following are ways you can reduce your expenses through them.

Cash backs on some purchses
Mile points
Discounts for some services
Referral bonus
Free access to some services when you have their credit cards

By reducing the money you spend on some purchases using credit cards’ tips, you immediately put money in your pocket. This simple trick will increase your condition of living much faster and steer you in the right direction financially.

8. Avoid high interest purchases

One way people get themselves in a lifetime of financial troubles is by purchasing high-interest products. The interest you pay on some of your purchases can make it difficult to achieve anything else in life especially when the interest is compounded.

In order to succeed at reducing expenses, you must avoid purchases with high-interest rates. For example, it is never a good idea to buy a brand new car on credit when you are trying to reduce your expenses.

This is because the interest rate on new cars is very high and this rate is directly associated with your credit score. According to US News, the average interest rate for a new car in November 2021 was 6.12% for someone with a credit score of 750 or higher. These rates go higher (up to 17.66%) as the credit score decreases.

An interest rate of 6.12% is too high for someone who wants to save money. Not only that you will end up paying almost twice the actual cost of the car, but you will also never be able to achieve anything else. On top of this interest, your insurance will be much higher and the car will be worth half or lower than what you paid for it 5 years later.

The point here is that you should avoid making decisions that cost you more money when you are trying to reduce your expenses.

9. Reduce expenses by not eating out very often

Here comes the point you probably don’t want to hear. Eating out in restaurants. What is wrong with dining out?

You are probably saying: Just $20 on my daily meal is not going to hurt anything. The thing is that the opposite is true. The money you are paying is not worth the food you are getting. This is because everyone who touched that food or contributed to the making of it must be paid.

In addition, the owner of the restaurant must make some profit after all expenses are paid. In order words, you are covering all owner’s expenses and putting money in his pocket at the same time. That is how they stay in business.

You could make that same meal at home for just $5 or less. That will leave you with $15 which could go into your savings. This is the trick right here. If you really want to reduce expenses, start with how you eat and what you eat.

10. Use coupons, discounts, and buy products on clearance

Sales are very important to businesses and that is why they do what they can to bring them in. Very often companies decide to sell their products at big discounts through coupons in order to bring in more sales and increase revenues. This happens usually on special holidays such as Christmas, new year’s eve, Black Friday, etc.

Some of the products businesses carry do not sell well. In order to get rid of products that are not selling, businesses put them on clearance. It would make sense to sell a product at a 60% discount than selling it at full price a year later.

If you want to save money, buy products that are on clearance.

Companies also offer discounts through coupons. These coupons are usually shown on their websites or sent through newspapers. Check these coupons out and shop what is on discount to reduce expenses.

11. Growing your own herbs and greens will help you reduce expenses

If you like cooking, you know by now that species and green are a little expensive. To reduce your expenses and save money, start growing your own spices. Some people may call it gardening but it is not. You don’t need a garden to grow your greens.

A few growing pots, a bag of compost, water, seeds, and the sun are all you need. Some of these greens such as herbs can be grown in the same container which will save you a lot of money.

12. Paying off your debt fast will help you reduce expenses

Borrowing money to buy things can only be a sweet deal if there is no internet. Unfortunately, this is not the case. Lenders need that interest to cover their expenses and stay in business.

What is good for business (interest businesses collect from you) is really bad for you. You see, when you buy a car for $25,000 with borrowed money, you end up paying almost twice due to interest.

Interest is your biggest enemy when it comes to borrowing. This is why you must pay off your debt as fast as you can to reduce expenses. This is the only way you can bring the total cost of your assets as close to the purchase prices as possible.

Pro Tip: The longer you keep debt, the more money it costs you. Pay it off as fast as you can.

If you need help paying off your debt, use the following articles as your guide.

13. Adopt frugal living mindset and habits

In order to reduce your expenses successfully, you need to adopt new habits. You need habits that let you focus on what matters to you the most.

One of the habits you should start working on is frugal habits. Frugal habits are not that easy to get used to. But once you do, it makes life much easier. With these habits in mind, you never have to worry about impulse shopping, flashy products all over the place, spending more than you are supposed to, etc.

If you are having trouble living frugally, use the following articles as your guide.

14. Reduce expenses by hanging out with the right people

If you are having trouble saving money it is probably due to the people you hang out with.

A wise man once said, “You are the average of the people you hang out with”. The questions: Who are your friends and how do they relate to you?

Do the people around you like to party, drink a lot, and shop without thinking? If yes, then you know why you are having trouble. How can you stay home and save money if all your friends are partying?

I can’t blame you. I have been there myself and It sucks to be in your shoes. Hanging out with the wrong people is a one-way ticket to a lifetime of misery and eternal financial troubles.

The only way to turn your life around is to first change the people you hang out with. Your inner circle will determine the size of your pocket. Surround yourself with people who share the same vision and goals as you.

It is not easy to reduce your expenses and save money. Your journey will be rough and full of doubts. That is why you need the right people who will comfort you and give you support when things are not looking good.

15. Start shopping at garage sales/thrift stores, salvation army, etc

You probably heard that shopping at garage sales will save you money and that is true. Garage sales are one of the best places to shop and save money. What makes garage sales a good place to shop when you want to save money is that people are willing to get rid of their stuff.

People have the motivation to sell and their time is limited. What is not sold is given away for free.

How do you know where garage sales are?

A good place to start is to drive around in your neighborhood or its vicinities. People put signs on the roads about their garage sales. Follow those signs and you will reach their homes.

Another place to check is through social media such as Facebook or other shopping websites like craigslist. If you cannot find what you want at garage sales, look at thrift stores.

Not everything is worth buying at garage sales. The following are some of the things you should always buy at garage sales. Read the following article for more details.

16. Reduce expenses by Shopping at cheap stores

Stores do not price their products the same way. By default, there are two ways companies set themselves apart from their competitors: (1) premium prices and (2) low prices.

For example, when it comes to grocery stores, Walmart is cheaper than Target and Walgreens. At the same time, Dollar Tree is cheaper on some products compared to Walmart. You can dig deeper and realized that thrift stores and GoodWill could be much cheaper than clothing stores simply because these stores sell second-hand products.

The point I am making here is that you need to be careful where you shop. Shop at places where you save money and consider thrift stores if you have to.

17. Stay in-netowork for your medical expenses

When it comes to medical bills, you should be careful of where you get your medications and other medical services. That is you should always use in-network providers.

Insurance companies team up with hospitals and other medical services providers to give discounts to clients. That is the hospital will accept rates provided by the insurance company, according to Blue Cross Blue Shield. What you gain as a customer is reduced medical services for going to providers accepted by your insurance.

This is one way to reduce your medical expenses and save a ton of money in the process.

One mistake many people make is to get medical services from out-of-network providers. This mistake makes them pay full prices for services they receive and lose those discounts.

18. Reduce expenses by Buying in bulks

Let’s assume that you are selling products for $10 each and make a profit of $3 for each product you sell. At the same time, it takes you 3 days to sell 100 products. Then someone comes and wants to buy 100 products at once but for only $9.50 each.

Will you agree to take the deal? Let’s see, in three days, you would have made a sale of $1,000 with a $300 profit. With this new deal, you will get rid of 100 products and only make $950 in sales with a profit of $250.

If you take the deal, your inventory will go down by 100 products but you will lose $50 in profits.

Flipping inventory fast is very important when it comes to business survival and long-term success. Although this deal loses you $50, you still have two more days to sell more products. Which means more sales. That is why this is a good deal.

Businesses give discounts to people who buy in bulks because it helps them drive in more sales and increase revenues in a short amount of time. So, if you want to reduce expenses, start buying products in bulks. This will save you money in the long run.

Of course products you buy in bulks must be something you really need. Otherwise, it would not make sense to buy 10 products when you only need 3 of them.

19. Reduce expenses by avoiding late payments

I am sure you have some bills to pay every month. Having bills is not a problem. Not paying them on time is a big problem. This is because most of the businesses you deal with apply late payment fees to your bills whenever you don’t pay them on time.

Every dollar you pay in late payments becomes free money for the business. In case you did not know, this is one way they stay in business. Without being careful, late payments can lead you into a financial crisis. Every dollar counts. So, make it count.

In order to reduce expenses, you must stop giving money away to businesses that will cut you lose once you stop paying.

20. Reduce expenses by Verifing your bills

The last tip you must always use to reduce expenses is to check your invoices. People make mistakes and it is your responsibility to make sure that you are paying exactly what you agreed for. If you don’t check for errors in your invoice, you could end up handing over free money to businesses you deal with. This will make it difficult for you to reduce expenses and save money.