How I Cut My Spending in Half

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In a fit of procrastination, I recently took a deep look at my spending all the way back to 2016. I was shocked to find that for a brief period, I was spending about $800 every single month, not including my set bills.

Luckily I have since cut spending! I had never spent that much before, and I haven’t come close since then. At that point in my life, I was in my second year of university, and was working 40 hours/week as well as maintaining a 4.0 GPA with a full course load. I usually slept about 4 hours a night. It was not only a baffling commentary on the reality of capitalism, but it was unhealthy.

I’m sure that part of my over-spending was an attempt at retail therapy. I had extra cash to spend, but ultimately was killing my mental health as well as my finances with a temporary (and not very effective) fix.

My budget is twice as tight now, and I’ve had to take some steps to cut my spending accordingly. Although a major lifestyle change, I’m not sure if I would be able to survive now spending that much money! Knowing how to cut spending is one of the best changes you can make if you’re looking to shrink your budget.

Face the facts

 You’ve heard it before: the first step to cut spending is accepting that you honestly do not need all the things you’ll want to buy. Contrary to popular belief, this doesn’t have to be in a way that deprives you per se. It’s simply recognizing what items are necessities, and what are not.

Enforcing this mindset, you’ll be less tempted to buy things that you see while you’re out. During my spout of overspending a couple of years ago, I would often stop and buy clothing that was on sale, well aware that I did not need it. Not to mention my slightly worrying obsession with household items such as herbal-scented candles and fancy hand soaps. If you can set pride aside, the dollar store is almost always equally effective!

The tricky thing when it comes to switching your perspective like this is verifying that you aren’t falling into the scarcity mindset. Just because you may now have less than you’re used to doesn’t mean that you don’t have enough! Thinking this way can prove to be harmful to your finances, and to your health.

Take a hard look at your bank statements 

Although my most recent review of my bank statements was in order to put off the more important things that I should have been doing, there really is nothing that motivates me to save more than a detailed read of my credit card statement. How the hell did I spend $40 on beer in one night last month? I don’t drink beer?

Existing in a state of denial, hoping your credit card balances out, and continuously telling yourself that you’ll deal with it later will not lead to any progress! I know this is shocking, but your spending will not change unless you’re actually taking the time to track it.

I find that to be most effective, it’s best to go beyond summaries and totals. Breaking it down just a little bit further makes it seem more tangible – more than just numbers on a screen – and that way you’ll actually think of financial consequences next time you’re at a bar.

How I cut spending in half

Take an evening and a bottle of wine and go through a month’s worth of statements, not including bills. If you reach the end of that and feel as though you spent more than you should have, subtract 10% from your total amount spent. This should be your spending goal for the following month.

How this worked for me was I started with $800/month, so my goal for the following month was $720. I continued this pattern, successfully cutting my spending by 10% each month until I reached $400/month, at which point I felt I couldn’t cut down anymore.

Do not keep cutting down if you’re already stretched to your limits! Remember to keep in mind that there is a limit to cutting your spending; there is only so much you can do.

Make sure you take the time to sit down and do the math at the end of every month. (Pro-tip – the bottle of wine makes it a lot less daunting). Dedication is key. It’s easy to keep spending. That’s why it can be so harmful to your financial profile.

Rethink your purchases 

I managed to cut spending further by asking myself one question with every transaction: could I have the same end result, or close to, without spending as much money?

If the answer is yes, then you’ve missed a money-saving opportunity! The Dollar Store is an incredible place. I know I keep saying that, but I would be nothing without the dollar store. The easiest things to buy from here are things like dishes, utensils, school supplies, and household items, as opposed to buying somewhere like Wal-Mart. These rarely have a significant drop in quality, and they can actually be found for quite a bit cheaper. Hand soap at the dollar store is one dollar; hand soap at Bath and Body Works is seven. Simple things like these really cut down your expenses!

For things beyond the dollar store (hard to believe such things exist), try to look at prices at multiple stores before making a purchase, especially if your favourite stores offer price matches. It’s a little bit more effort before you go shopping, but it ensures you can buy what you need for the cheapest amount possible. When cutting spending, that just seems like an obvious choice!

Make adjustments

Whoever said money can’t buy happiness was obviously rich. The unfortunate fact of the matter is that in order to cut spending, you may have to make some sacrifices in terms of lifestyle choices. It’s hard to accept a drop in quality of life, but I promise you it’s for the best. It’ll pay off in the long run when you have no consumer debt!

Most of these lifestyle switches are super simple! I suggest having friends over for wine instead of going for drinks at a bar or drinking instant coffee every morning instead of stopping at Starbucks on the way to work. Not a lot of people can endure cheap coffee the way I can, but I can’t tell you how much this alone has cut spending!

If you’re really strapped for cash, you have to accept that some things simply no longer have a place in your budget. For example, I haven’t bought new clothes in at least a year. Unless some wardrobe tragedy occurs, I don’t plan to until I’m at least graduated. That’s another two years without new clothes, which to be honest is a little bit sad, but doable. And in my eyes, worth it!

Spending more won’t make you feel better

Let me tell you from grueling experience – retail therapy is not super effective. Looking back at when I was spending 800$/month, I can’t think of a single purchase that made a difference enough to be worth it. Quite frankly, I would much rather have that extra 400$/month saved. My student debt would be a lot less scary if past-Meagan cut spending earlier on.

If you, like me, are tightening your budget to your absolute limit, I want you to remember that it’s temporary. Money is tight, but discipline now will result in a better financial future. Future you will thank you!


About Author

A professional writing student at York University, Toronto. A newbie in the world of personal finance, but writing with MAG I've got the perfect teacher! Literary nerd, writer, and coffee enthusiast.

1 Comment

  1. The dollar store advice is the most sound advice anyone can give for budgeting. While stores take quite a bit, I know people who go out for food and are surprised that the spend hundreds if not thousands each month. Try to cut on restaurants and coffee shops.