What are some effective ways to reduce your personal spending?

Originally answered August 15, 2019

Here are 21 tips:

1. Don’t lease your car. Own it and keep it for as long as you can. Not having to make a monthly car payment is a great way to reduce your personal spending. The longer you can still use a car that is paid off, the more you save. Use GasBuddy to find the lowest price on gas. Plan to make it to those stations to fill up, rather than having to fill up at a more expensive station when you are running out.
2. Avoid expensive restaurants. Take advantage of Taco Tuesdays, happy hours, and early bird specials. Seek out ethnic food bargains such as $1.50 dumplings in New York’s Chinatown or $2.50 Banh Mi sandwiches in downtown Houston. Order tap water to drink. Take home any leftovers for your next meal.
3. Combine sales with manufacturers coupons, store coupons, loyalty program discounts, and promotional discounts. For example, at Kohl’s, scour the clearance racks to find discounts of 60–90% off, and then use a 30% scratch-off card, $10 Kohl’s cash from the last sale, $5 Yes Reward, and other promotions and coupons to get items for practically free.
4. Know what the prices are for things you buy, and recognize bargains when you see them. Stock up when items you frequently buy go on sale so you don’t have to run out and buy them at non-sale prices. Compare the prices, including unit prices, of similar items to make sure you are buying the ones on sale or that are the least expensive.
5. Avoid warehouse clubs. You shouldn’t have to pay an annual fee to save money. These stores tempt you into buying things you didn’t intend to, and buying larger quantities of items than you actually need or can use. They foster a cult-like allegiance, but you can resist.
6. Use Priceline for hotels, rental cars, and airlines. Priceline Express deals are often the best for hotel rooms and car rentals, and sometimes for air fares. Use Airbnb for a low-cost alternative to hotels.
7. For home projects, weddings, or other major expenses, get at least three bids, and solicit at least three references from each contender. If those don’t yield a clear winner, get even more bids. Don’t rush into any major purchase. List the pros and cons of each bid, and decide only when there is one that stands out above the rest.
8. Search online for bargains, coupon codes, and promotions. Use Craig’s list to find furniture and other big-ticket items, and to get free items.
9. Sign up for rewards programs at all stores that offer them, and use them whenever you shop there. Many grocery stores only apply sale prices if you present the card or use the app, so be sure to do so. Sign up for travel rewards programs and use them to book free flights and hotel rooms.
10. Compare pharmacy prescription prices with mail order, online, and Canadian sources. Take advantage of coupons and promotions at CVS, Walgreen’s, and other pharmacies. CVS prints out miles of coupons whenever you shop there, both at their coupon kiosk and when you check out, so use them, especially in combinations. Join Walgreen’s Rewards, install the app on your phone, and earn points just by walking and doing other healthy activities.
11. Take advantage of free concerts, free movies, library programs, and other local cultural events. Find all the free series in your area, know which ones are on each day of the week, and frequent them. Borrow books, DVDs, eBooks, and audiobooks from the library instead of buying them or paying to see movies.
12. Pay off all credit card debt. If you have trouble running up debt on your cards, cut them up and use cash for all purchases. If you pay off your cards in full each month, take advantage of multiple credit card rebates, seeking out the maximum rebate percentages. This includes different cards for different categories, e.g., Bank of America Cash Rewards for travel, American Express Cash Preferred for groceries and gas, Capital One Savor for dining and entertainment, and Alliant Signature for all else. Use Discover and Chase Freedom only for the 5% rebate categories that change every 3 months, up to the promotion limit (typically $1,500), and then stop. Generally, avoid paying annual fees, but do so if the payoff is worth it. For example, American Express Cash Preferred pays 6% rebates on groceries and streaming services, so the annual fee is typically worth it. Airline cards are worth the fee if you check bags several times a year. When out of the country, use cards that don’t charge international fees. Use the right charge card that matches each rebate category for all purchases, including automatic utility payments, unless there are fees for using credit cards that exceed the rebate amounts.
13. Use a bank that won’t charge you for checking or savings accounts, and pays interest on those accounts. Take advantage of programs such as Bank of America’s Preferred Rewards that waives fees for ATM use, wire transfers, stop payment orders, and new checks. Avoid ATM fees by getting enough cash from your bank’s ATM to last until you are near one again.
14. When buying a home, make a larger down payment, avoid credit life insurance, and try to get a 15-year fixed term mortgage. A larger down payment will cost more upfront, but will reduce your long-term costs. A 15-year mortgage will cost more each month, but will significantly reduce your long-term costs and will reduce your monthly payment to zero in half the time of a 30-year mortgage.
15. Avoid extended warranties for most purchases, Only buy them for high-priced items that have a high likelihood of failing and would be costly to repair or replace, such as cars and expensive TVs.
16. Don’t buy whole life insurance policies. Buy lower-cost term policies with death benefits that, when invested, will yield enough to replace the lost income.
17. If your employer offers a retirement plan, contribute the maximum amount that results in a matching contribution. If not, contribute the annual maximum allowed to an IRA. This will lower your taxes.
18. Share your media subscriptions with other family members. Netflix Premium allows four different simultaneous users, Spotify Family Plan allows six, and some cable TV subscriptions allow all family members to login to use all services of the main subscription, including premium channels. Don’t pay separately for networks such as HBO if they are included in your AT&T mobile phone plan, your family cable plan, or Amazon Prime. You can use your login from any of these to access premium services such as HBO Max.
19. Instead of taking Uber, Lyft, or a cab, walk, bike, or take public transit. Instead of paying for expensive parking lots or valet parking, look for free parking spots, or low-cost meter spots, and walk a bit farther. Note the times parking meters are in effect, and pay only for the time required, or not at all if after the posted times.
20. Don’t allow yourself to be sold to, pressured into buying, or pitched something that you don’t need. If you aren’t in the market for something that is being promoted to you, just say no, hang up, or walk away. When you are in the market, choose to buy by seeking out the best alternatives, comparing them objectively, and selecting the best choice only when you are actually ready to buy. Most people who are pressured into buying a vacation timeshare, an extended warranty, or an expensive life insurance policy later regret it. Don’t allow yourself to become a victim. Stand up for yourself and resist. Be wary of any unsolicited call, email, or knock on the door. Spam, scams, and phishing are rampant, so be very skeptical of everything, even if it looks or sounds official or legitimate. And if something sounds too good to be true, e.g., Microsoft is giving away gift cards, then it is most likely a scam.
21. Avoid buying things you don’t really need, based on an impulse, to keep up with others, to impress people by owning prestigious brands, because you are sad or bored, as a pastime or compulsion, or simply because you are flush with cash or credit cards. Buy mostly things you actually need, with moderate spending on other things to help you enjoy life. Keep purchases of items that can be unhealthy, harmful, or addictive (such as alcohol, drugs, sweets, lottery tickets, and gambling) to a reasonable level that is under control. Instead of buying a daily latte at Starbucks, brew Starbucks coffee at home and take a cup along. Instead of buying a name brand, try the store brand. Instead of buying a status symbol, choose a solid product that performs as desired. For example, a reliable, inexpensive watch can tell time just as well as a designer watch. A good used car, or modest new car, that starts, keeps running, and is inexpensive to maintain will get you to where you need to go just as well as an exorbitant one. Don’t worry about what others think of the brands of your clothes, accessories, and possessions. Please yourself, and take pride in the fact that you are financially more responsible than the average person.

See also:

• What is the best way to create a budget?
• What are the best ways to invest money?
• What do you prefer, saving or investing?
• What personal finance mistakes should everyone avoid?