How To Reduce Your Spending and Save Money Every Day


When it comes to saving money, reducing your spending is key. Progress comes from doing simple things well, so although you might have good intentions to reduce your spending, unless you actually implement significant changes to bring your expenses down, you will always continue to spend the money you have available. 

We may have a strong budget, savings account or intention to save money, though without actually following through on our promises to reduce spending, our savings will amount to very little. It’s a very basic formula: The less you spend, the more you have. 

Here’s a guide on how to reduce your spending and watch your savings grow.


What can you do to stop overspending?

Generally, there are two major kinds of unsustainable purchase behaviours. Either, or both, are harmful to your ability to live comfortably within your income and still save money:

  • Spending too much on necessities 
  • Spending money on things you don’t need

How to reduce your spending on necessities

  • Look at buying home brand items 
  • Reassess brand loyalty - Do you buy a more expensive toothpaste because it is better, or because it’s what you’ve always done? Rewiring our behaviours (and becoming loyal to cheaper brands) is a relatively easy way to reduce our spending on essentials 
  • Don’t pay for packaging - Resisting the marketing ploys of products is a fast way to reduce your spending on essentials

How to stop spending money on things you don’t need

Great personal finance comes down to the ability to defer gratification, something we are perhaps less adept at than older generations. 

We all know what we shouldn’t be spending our hard-earned savings on. Bringing increased consciousness into how we spend money can significantly reduce our spending. Here are some tips to reduce spending on things we don’t need:

  • Cooking at home - Sometimes, you need that delivered pizza. But most of the time, we don’t. The amount of money that can be saved by cooking from our fridge and pantry is extreme. Reconfiguring our meals around the food we’ve already bought, and avoiding the temptation of grabbing quick-and-easy takeaways, is one of the fastest and most effective ways to reduce spending. It also reduces waste! 
  • Purchase consciously - Some things are easier than others to cut out of our lives. Decide what you really enjoy and lose the rest. Perhaps you just love picking up a magazine every Friday afternoon. If you do, by all means continue doing what you love. But make the decision to cut back elsewhere. 
  • Try to cut back on smoking, drinking, and takeaway food - Despite appearances, this isn’t about being the fun police. You can love wine, beer, or the occasional late-night greasy burger - but if you want your finances to improve, it is essential to make some changes to your priorities. A report from the Australian Institute of Health and Welfare found that some households are spending the same amount on alcohol each week as they spend on electricity and gas. It’s not sustainable, for our health or our wallets.

How much is your vice costing you?


  • Smoking: If you smoke a pack a day, your smoking is costing more than $12,000 per year 
  • Drinking: The average Australian spends more than $1,650 per year on alcohol
  • Junk Food: Around 27% of our household food expenditure is spent on food outside the home

How to get motivated to stop spending money and save

This might seem blatantly obvious, but here are a couple of reasons to get your motivation up for saving money:

  • You feel good. We often underestimate the stress and anxiety in our lives that comes from not having enough money to comfortably cope with change. 
  • You feel in control. No one can run your life but you, and you can make the choice and change the behaviours that enable you to run it efficiently and sustainably. 
  • You enjoy what you have. There’s no need for a pay rise in order to feel more financially comfortable. Saving isn’t about how much you earn, but how smart you are with your money. If you want an instant pay rise, reducing your spending can give you one straight away. 
  • You choose your life. By reducing your spending, and consequently improving your savings, you get to choose the kind of life you want to lead, now and in the future. By reducing spending, you can choose to have a comfortable retirement, enough money to manage the inevitable crises of day-to-day life, and afford the things that truly matter.

5 quick tips to help reduce your spending

  • Item Track your spending - There is no way you can reduce your spending if you don’t know what you spend your money on. Try it for a month. You’ll be amazed at what comes up; the amount you spend on coffee on the way to work, or the actual cost of a night out on the town. 
  •   Cut your grocery bill in half - Just for one week, commit to spending only half of what you would usually spend. Supplement from stuff already in the fridge. You’ll be amazed at how easy it actually is to get through a week on half the cost, especially if you commit to buying cheaper products at the same time. 
  •   Plan your meals - A meal plan will reduce your spending significantly, especially if you work around groceries already in your fridge. 
  •   Have a no-spend month - Choose an item you spend a lot of money on - shoes or concert tickets - and commit to not spending any money on it for a month. You might find you don’t miss it. You might find the extra money for your savings brings you peace of mind, while the shoes just bring blisters. 
  •   Prioritise - Great, sustainable personal finance and the ability to reduce spending, comes from taking a realistic view of our lives. Personal finance is not about living like a monk. It’s not about taking all the fun out of our day. It’s about choosing the things that are important; that can include your morning coffee at the local cafe, but also choosing to sacrifice other things that aren’t as important. Once we prioritise what matters, we can save money in order to achieve those goals.

How to reduce spending even if you don’t trust yourself

Behaviours can be hard to change. If you want to make sure you reduce your spending, you can:

  • Automatically deduct your savings from your pay each week, leaving you with a finite budget to spend until the next pay day. Make it realistic, so you don’t starve for the last couple of days 
  • Spend only cash. No credit, no debit card. Our brains are wired differently when it comes to cash, as opposed to cards, so try spending only cash for a week 
  •   Increase your tax and super contributions, improving both your retirement savings and the amount you’ll get back as a tax rebate at the end of the financial year. 
  • Find a savings support buddy. Have them hold on to your credit card to help you stay motivated. Find habits to replace bad spending behaviours. Get fit. Call a friend every time you want to binge-spend. Keep a close eye on how your savings grow, and feel great about the changes you’ve made.

I’ve managed to save money, what should I do with it?

The money you’ve saved from reducing your spending can then be put to work in any way you like:

  • Consider looking at at an investment portfolio 
  • An emergency fund will buy the peace of mind 
  • Extra contributions to superannuation will work wonders with the combined power of time and compound interest 
  • Look at how you can use your savings to create a comfortable, sustainable savings and investment scheme for the long-term

First, reduce your spending. Then, the world is your oyster