Need to Cut Spending? Look at These 3 Expenses First

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If you want to save more money, spending less is a good place to start. Get ideas of where to cut back with a few places where people often overspend. 

Saving more money is a popular goal. Among those with financial resolutions for 2024, over one-third had a savings-related goal, according to research by The Motley Fool Ascent.

One of the easiest ways to save more is to cut back on your spending. Lots of people have areas where they overspend, often not even realizing how much certain expenses are costing them.

But it can take a long time to go over all your expenses, and there are likely many areas where it’s hard to cut back. To save time, check out how much you’re spending on the following expenses first. They’re all areas where people frequently overspend, and it’s not that difficult to spend less on them.

1. Dining and food deliveries

Dining out has always been an area where it’s easy to overspend. Going out for dinner or drinks is fun, and much more convenient than cooking at home. And if you want a meal from a restaurant without leaving your house, DoorDash, Uber Eats, and the many other food delivery apps have you covered.

There’s nothing wrong with spending money on a nice meal, as long as you don’t overdo it. But make sure to keep track of how much you’re spending. A whopping 30% of consumers were spending an average of $180 at restaurants each week in 2022, according to Popmenu. That’s $9,360 per year. Unless you make a high salary, that kind of spending can make it hard to reach your savings goals.

If you’ve been spending a lot of money on dining, swap out at least one or two restaurant visits (or deliveries) per month with home-cooked meals. It’s not a drastic change, and it could free up $100 to $200 or more.

2. Your car payment

Cars are expensive, and they’re status symbols, so it’s tempting to spend more than you can afford. If you’re not careful, you could end up with a car payment costing you 25% or more of your income, for 72 or 84 months. Some personal finance experts have even called cars the biggest wealth killer because of how often people overspend on them.

If you’re planning to buy a car soon, figure out how much car you can afford first. A couple of good rules are that your car payment should be no more than 10% to 15% of your income, and an auto loan for a new car should be no longer than 60 months.

If you have an expensive car payment, consider selling the car and getting a cheaper vehicle. This is definitely a bigger change than cutting back on dining, but it could make it much easier to add to your savings account.

3. Streaming services

There are an overwhelming number of streaming services available. The most popular is still Netflix, which costs $15.49 per month for a standard plan with no ads. If you have kids, you may want to add Disney+ ($13.99 per month for a Premium plan with no ads). Then there’s Max ($15.99 per month), Apple TV+ ($9.99), and many more, all with their own unique lineups.

Streaming services probably aren’t your largest expense, but they could be an area where you’re overspending. Some people gradually add to their streaming subscriptions, so these could go from costing you under $20 per month to $75 or more.

If you pay for several subscriptions, consider cycling your streaming services. Keep just one or two of your subscriptions active each month. Once you’re caught up on what you want to watch, cancel those memberships for the time being and activate one or two other services.

Those three expenses are a good starting point for cutting back, based on consumers’ typical spending habits. See if any of them are costing you more than you’d like, and if so, start looking for ways to lower your spending in those areas.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Netflix, and Uber Technologies. The Motley Fool has a disclosure policy.

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