Personal Finance

5 strategies to save more and spend less

“What you make of your life is up to you; you have all the tools and resources you need. What you do with them is up to you.” – Unknown

The essence of money management isn’t hard to grasp. Know how much you make, know how much you spend and manage your money in a way that ensures the amount flowing out is less than the amount flowing in. The concept is simple, but just because something is simple doesn’t mean that it’s easy.

Related article: Building wealth is simple, not easy

The challenge with managing money effectively is that it often means making choices that delay gratification which is counter to the way that human beings are programmed to function. Good money management hinges on developing good habits and, wherever possible, in making those habits automatic. Here are five simple strategies to help you save more and spend less.

Pay yourself first

This is a cornerstone of wealth building and possibly the most important financial habit to adopt. Simply put, people who save before they spend have more money saved than those who make saving the last thing they do with their paycheque. Anyone who has the advantage of working for a company with a workplace savings plan in the place knows the power of channeling money into saving before it hits your bank account and the value of making that savings process automatic.

Related article: Pay Yourself First

If you don’t have the option of saving through payroll deposits you can easily create your own automatic savings system by setting up pre-authorized deposits to your savings and investment accounts so that your contributions are debited on the day your paycheque hits your bank account.

Pay bills on payday

The longer money hangs out in our bank accounts, the greater the risk that we’ll be tempted to “repurpose” some of it for something more enjoyable than paying bills. Some people don’t like to pay bills early because they want to keep the money in their account for as long as possible but it makes managing your money a lot simpler if you pay everything at one time and reduces the risk of being charged late fees if you happen to forget a bill’s due date.

Stay out of the stores

If you can avoid temptation then there’s a really good chance you won’t be tempted! Retailers know exactly how to highlight, showcase, promote and display goods to appeal to the impulsive, pleasure centered human brain and they do an outstanding job of presenting us with an abundance of opportunities to exchange our hard-earned money for “stuff”. Anyone with a closet full of clothes that still have tags on or a basement full of impulse buys that haven’t been used can attest to the fact that the anticipation of owning something is far more exciting than the reality of owning it. I know from personal experience that breaking the habit of wandering through the mall or my favorite stores when I had some time to kill has saved me a lot of money over the past few years (and it’s reduced the clutter too!).

Track your spending

I resisted tracking my spending for the longest time. I claimed that it was because it was tedious, boring, unnecessary and time-consuming but I think it had more to do with the fact that I just didn’t want to know what I was spending. I didn’t want to know because then I’d be forced to do something about some of the less than ideal choices I knew I was making.

Related article: Know your spending

Tracking your spending forces you to be more conscious of how much you earn and where your money is going. This awareness makes it much easier to reach your financial goals and reduces the risk that you’ll get off track.

Push your limits

One of the best pieces of advice I was given about deciding how much to save came from a financial advisor who told me to choose a dollar amount that would hurt enough that I noticed it but not so much I couldn’t move. She pointed out that if I chose an amount that hurt too much, I would call her to reduce it but if I chose an amount that I barely even noticed, it was unlikely I’d call her to increase it. I’ve applied this theory to my savings and also to attacking my debt mountain. I’ve tried to choose numbers that force me to scale back on impulsive splurges like new shoes but allow me to factor in a few indulgences (weekends away and flights home) that I can look forward to and enjoy. I’m a big believer in setting the bar high and setting goals that are challenging but achievable. You really don’t know what you’re capable of achieving until you commit to stepping outside your comfort zone and this is just as true for finances as it is for any other area in life.

Related article: Four disciplines to financial success

Building wealth boils down to a combination of hard work and discipline. The principles are simple but not always easy and they’re worth repeating, If you have strategies for boosting savings and reducing spending, I’d love to hear them.


  1. Jim Yih

    Thanks for the strategies Sarah but I would add a key strategy . . . EARN MORE. You can’t save, spend, or invest money without earning it first

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