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Saving & Spending Budgeting & Expenses

12 Clever Ways to Save Money and Spend Less Every Month

You can save money, reduce debt, and achieve financial stability with a budget, money challenges, and smart spending habits.

Someone holding a piggy bank
Danielle Letenyei
By Danielle Letenyei
Ashley Donohoe
Edited by Ashley Donohoe
Updated Dec. 17, 2024
Fact checked

Saving money can sometimes feel overwhelming, especially if you live paycheck to paycheck, and you’re not alone. According to a survey by YouGov, around half of Americans have less than $5,000 in savings.

Besides making it harder to reach big goals, this can create serious financial troubles if you face an emergency like a major illness or an expensive repair bill. But with the right strategies and tools, you can make meaningful progress to save for your future and become more financially resilient.

Let’s explore 12 clever ways to save money, including creating a budget, canceling unnecessary subscriptions, shopping at secondhand stores, and following saving challenges.

Key takeaways

  • The 50/30/20 model is a popular way of budgeting that separates your needs, wants, and savings or debts.
  • You may be able to negotiate some bills.
  • Secondhand shopping can save money and is a sustainable practice.
  • Apps like Capital One Shopping, Rakuten, and Ibotta can get you discounts or cash back on purchases.
  • High-yield savings accounts can help you grow your savings.

Get a good start with a budget

The first crucial step for saving money is creating a budget, which can help you understand what you spend your money on and where you can cut back. There are several budgeting methods available that can help you manage your money better.

With the popular 50/30/20 budget model, you allocate your after-tax income so that 50% goes toward needs like your rent or mortgage, utilities, and groceries; 30% goes toward wants like entertainment, dining out, vacations, and clothes; and 20% goes toward building your savings or paying off debt.

Another popular method is the envelope system, also called “cash stuffing” or “bucket budgeting.” With this method, you cash out your paycheck and separate that cash into envelopes labeled for your different expenses. Some people use this method only for variable spending like groceries, gas, and entertainment, while others may also include essential expenditures such as housing and utilities.

I prefer to use the 50/30/20 rule or a tweaked version of the model. For example, when I want to focus more on paying off debt and savings while cutting down on discretionary spending (the wants), I’ll allocate 30% to debt and savings and 20% to wants.

You can use a spreadsheet to create your budget or use one of the best budgeting apps available like Rocket Money, YNAB (You Need A Budget), or Simplifi.

I use both a spreadsheet and Simplifi by Quicken. On the spreadsheet, I lay out my recurring monthly expenses and my monthly credit card payments and subscriptions (like Netflix and SiriusXM Radio) – as well as a 50/20/30 breakdown of how much I should allocate to my needs, wants, debts, and savings. I then use these numbers in Simplifi to keep track of my monthly spending.

Be smart at the store

Before you head to the grocery store, it’s a good idea to plan out your meals for the week and make a list of what you need for those meals. This can help you save by focusing only on what you need rather than being tempted to buy a bunch of food you may end up throwing away because it goes bad before you have a chance to use it. I just threw away some formerly fresh broccoli I bought on a whim a couple of weeks ago and never used.

To save even more money, plan your meals around the weekly sales at your local grocery store. I started doing this when my kids were little and I was feeding a family of four. If the store had pork chops and ground chicken on sale, I planned our dinner menu for the week to include those items.

Using coupons, selecting off-brand products, and buying in bulk are also things you can do to save on groceries.

Practice the 30-day rule

All of us are guilty of impulse spending now and again. I have a friend who has an Amazon package delivered almost every day — usually something she bought on impulse.

These impulse buys can add up quickly and take from the money you should be saving. If this is an issue for you, consider using the 30-day rule on discretionary purchases. This rule is simple to follow: If something you want catches your eye, hold off for 30 days before you purchase it. Thinking about it for some time may help you realize you don’t want or need it.

Cut back on subscriptions and plans

There are so many subscription services available today for television, music, fitness, and more. Subscribing to too many of them could cost you a small fortune.

Subscription-based businesses rely on customers like you forgetting about your subscriptions and allowing them to automatically withdraw money from your account each month. Budgeting apps like Rocket Money and YNAB can help you more easily track subscriptions and cancel the ones you don’t use.

You can also cut how much you spend on streaming plans and subscriptions by limiting how many you pay for at a time. I currently limit my television streaming subscriptions to Netflix and Apple TV+. However, if I decide to reactivate my Hulu subscription when there’s a new season of Only Murders in the Building, I’ll drop Apple TV+ for a while.

Practice your negotiation skills

Like many people, you might not realize you can try to negotiate and lower your bills. It never hurts to ask the company for a better deal.

For example, I’ve had SiriusXM Radio in my car since I bought the car. At first, it was free, but after the trial period ended, the cost increased to about $20 per month. When I called to cancel, Sirius offered to drop the price to just $5 per month, which I happily accepted. I’ve been paying this lower amount for the past 3 years. Every time the rate goes up, I call to cancel, and they lower the cost again. I’ve also used this strategy to reduce the cost of my mother’s plan.

You may even be able to negotiate high medical bills, depending on your financial status. When I called to complain about an unusually high medical bill, I was referred to the “hardship” department. There I was told that if I earn less than $75,000 per year, I may be able to have 80% or more of the medical bill forgiven. I ended up paying nothing. Again, it never hurts to ask.

Don’t shy away from buying secondhand or borrowing

Why buy brand-name new items when you can save money by buying things used at thrift stores like Plato’s Closet or through online selling sites like Poshmark, eBay, and ThredUp? Not only can you save money, but buying things secondhand is also a sustainable living practice that helps keep stuff out of landfills.

You can find clothes, shoes, books, furniture, electronics, and more at secondhand shops and websites, and the prices can be a fraction of what the things would cost new. My friend found a pair of Nike Air Max shoes on Facebook Marketplace for just $30 (the retail price is over $100).

If the item is something you just need temporarily, see if you can borrow it from a friend, family member, neighbor, or someone else. You can also try community groups on Facebook and other sites where people lend or swap items. If it’s just a book or media item, you might have luck at your local library.

Downsize your stuff to save

Another option for saving money is to downsize. This can mean anything from selling the everyday household stuff you don’t use anymore to selling that second car in your garage or even moving into a smaller, more affordable home.

After my rent increased by almost 20% this year, I’ve seriously considered moving to a smaller home in a more affordable community than where I live now.

Take advantage of money-saving apps

You’ll find many apps today that are designed specifically to help you save money. Capital One Shopping and Honey automatically help you save money by finding discounts for things you buy.1 Rakuten and Ibotta are free apps that reward you with cash back on your purchases. GasBuddy is another app everyone should have because it helps you find the cheapest gas prices wherever you may be in the country.

Be greener about your utility use

You can save money by cutting back on the water, electricity, and gas you consume. According to the U.S. Department of Energy, setting your thermostat back by 7 to 10 degrees for 8 hours each day can save you about 10% on your energy bills. Cutting your time in the shower by 4 minutes may also reduce your water bill by $100 per year as well as reduce the gas or electricity needed to keep that shower warm.

When it comes time to replace your appliances, you could benefit from purchasing efficient models with the Energy Star certification. While they might cost more upfront, the utility savings can add up over time and be worth it.

Try a money challenge

If you’re having trouble keeping to your budget and are still spending too much, challenge yourself and turn saving money into a game. One way to do this is to commit to a “no-spend” month where you don’t go to restaurants, buy clothes, or spend anything besides your monthly bills and essentials like groceries and gas.

Another popular option is the 100-envelope challenge, where you label 100 envelopes with the numbers 1 to 100 and set them either mixed up or in order. Then, on a daily, weekly, or monthly basis, you pick one of the envelopes and place the amount of money in the envelope that corresponds with the number written on it. For example, if you choose envelope #50, you’ll put $50 inside it. After you’ve used all 100 envelopes, you should have saved $5,050.

One saving challenge I’ve used is the 52-week money challenge, which works best when you start at the beginning of the year, or week 1. Each week, you put in your savings the amount of money that corresponds with that week. For example, you save $1 in week 1, $2 in week 2, $3 in week 3, and so on. After week 52, you should have $1,300 in the bank. When I do this challenge, I use a broadcast calendar to easily keep track of the weeks.

Try the DIY approach

It’s normally cheaper to do things yourself rather than paying someone else. For example, if you hire professionals to paint your living room, you could get a bill of about $900 to $1,300. However, if you paint the room yourself, your costs could be at least 70% cheaper because you won’t have to pay for labor.

Not everything is a good DIY project, so you should know when to leave the work to the pros. As for electrical issues, you should hire a trained electrician.

I learned the hard way that dog grooming is something I should leave to the professionals. My DIY attempt at grooming the dog ended with my poor dog sporting uneven patches of fur as I frantically chased him around the yard with clippers.

Strategize your savings for success

You can grow your savings and make your money work harder by putting it in a high-yield savings account. Some of the best high-yield savings accounts earn an APY that’s much higher than you would get with a traditional savings account. For example, the Wealthfront Cash Account earns 5.00%.2

Unlike CDs, the money you put into a high-yield savings account is accessible whenever you need it. I put my savings in an American Express High Yield Savings Account, which currently earns a 3.80% (as of December 17, 2024) APY and grows my savings each month.34

Most banks and credit unions will also let you set up automatic transfers so a portion of your income goes right into your savings account before you try to spend it.

FAQ

How can I save $1,000 in 30 days?

To save $1,000 in 30 days, you’ll have to drastically reduce your discretionary spending, such as dining out and shopping. You could also use the 100-envelope challenge daily, where you put the corresponding amount of money in the numbered envelope selected. You would need to target envelopes with larger numbers to meet the $1,000 goal in 30 days.

How can I kick bad spending habits?

One way to kick bad spending habits is to get a budget and stick to it. A budget can help identify what you are spending your money on and where you may be able to cut back. You must be diligent about following your spending plan and limiting buying things that you don’t need. One popular option is the 50/30/20 model, where you only spend 30% of your after-tax income on wants, with the rest going to needs (50%) and savings or debts (20%). You can also try the 30-day rule to help yourself make fewer unnecessary purchases.

How much should I save per month?

Experts generally recommend saving between 10% and 20% of your after-tax monthly income. However, this amount should be higher if you don’t have an emergency fund already. Your emergency fund should be enough to cover your expenses for 3 to 6 months. So if you have $2,500 in monthly expenses, you should save between $7,500 and $15,000.

Bottom line

Establishing good savings habits is attainable with patience, perseverance, and practice. Effectively managing your finances starts with creating a budget and making conscious decisions about your spending. Planning meals, shopping secondhand, cutting back on unnecessary subscriptions, and using savings tactics and apps are all clever ways to save money.

Plus, putting your money in a high-yield savings account can help you earn a good interest rate while you work toward your goals. Pick that account wisely and try to find one that features savings tools and minimizes the fees that can work against building your savings fast.

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