About Half of Americans Plan to Spend Less in 2023. Here Are 4 Ways to Save

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Cutting back on spending isn’t easy — but it can be done. 

The start of a new year is a great time to commit to some financial goals, whether it’s paying off your credit cards or finally opening that IRA you’ve been talking about for years. Cutting back on spending is another good goal to aim for, and if you put it on your list, you’ll be in good company.

In a recent survey by Principal, 46% of respondents pledged to spend less money in 2023. If you have a similar goal, here are some ways to achieve it.

1. Follow a budget

It can be difficult to cut back on spending when you’re not really sure how much you’re spending on different bills in the first place. That’s why following a budget is essential to reducing your spending. Only when you have your various expenses listed in front of you, along with their costs, will you be in the strongest position to make changes that help you preserve more of your paycheck month after month.

If you’re not sure how to get started with budgeting, simply list your expenses in a notebook or on a spreadsheet and comb through previous bank and credit card statements to see what they generally cost you. There are also different apps you can use to make budgeting a snap. And best of all, these apps will commonly link to your checking account and credit card accounts to help categorize your spending.

2. Prioritize your non-essential bills

You most likely pay for expenses that aren’t needs, but rather, wants. That’s perfectly okay. But if you want to cut your spending, you’ll need to order those non-essential items by priority and then spend less on the things that aren’t as important to you. So if, for example, you can’t bear to give up your weekly night out with your friends, you can look at canceling your yoga studio membership if you have the option to take free online yoga classes instead.

3. Cancel services you’re not getting good use out of

Maybe you pay $50 a month to use the gym but hardly go. Or maybe you pay $15 for a streaming service you rarely watch. One of the easiest ways to reduce your spending is to get rid of bills that aren’t adding a lot of value to your life.

4. Employ strategies to avoid impulse buys

Impulse purchases can be a true budget-buster. If you’ve been known to fall victim to them, take steps to try to avoid them.

For one thing, consider shopping with cash only. If you don’t have extra money to pay for unplanned buys, they’ll be off the table.

Next, make a point not to shop online as an evening activity. Instead, read a book, watch something on that streaming service you’re still paying for, or call a friend to catch up.

Finally, employ the 24-hour rule. When you’re tempted to buy something on a whim, force yourself to wait a full 24 hours to complete that transaction. Chances are, in that time frame, you’ll come to the realization more often than not that the item in question is something you can pass on.

Reducing your spending is no easy feat. But these tips could help you meet that goal in 2023 and have something to truly be proud of by the end of the year.

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