Money bag, coins stack and banknotes.

Spending less is the key to saving more, but learning how to control spending habits (and figuring out what lifestyle changes to make) isn’t always easy. If you want to improve your finances, take a good, hard look at where you spend your money and adjust your spending to achieve your short- and long-term financial goals. Of course, that’s far easier said than done.

Here’s where to start: four strategies to spend less and save more.

1. Track your spending

Tracking how much you spend is the first and most important step. Mindless spending often leads to overspending, because you likely don’t realize how much you’re actually spending in certain categories — whether it’s personal care, clothing or dining out.

To figure out how much you spend, go into your online banking account and review your credit card statements. You should be able to download your recent transactions over the last few months as a spreadsheet directly from your account. Some banks and credit unions even provide budget breakdowns for different spending categories as part of their online account features, so use this tool, a free money management app or your own analysis to figure out where your money is going.

2. Understand your spending patterns

Once you review your accounts and identify trends in your spending, you can probably pinpoint a few areas you can cut back. Some of the most commonly purchased items and services that people overspend on include:

  • Dining out
  • Clothing
  • Travel
  • Subscriptions (streaming services, magazines, etc.)
  • Memberships (gym or fitness studio)
  • Personal care (skincare, haircare, salon and spa services)

Adjusting your spending in some of these categories could save you thousands of dollars a year. For example, if you spend $20 per class at a local yoga studio and go three times a week, that’s $240 a month. Instead, maybe go twice a week and supplement with an at-home yoga video. You can take the same approach with dining out. The average person spends slightly more than $3,500 a year dining out. Slashing your restaurant spending by cooking at home more will result in major savings.

And if you use our money-saving app and website, you’ll find coupons and cash back offers that will help you spend less on some of your favorite items — like groceries and personal care products — so saving money won’t feel like a sacrifice.

3. Know your spending triggers

Learning how to control your spending habits also requires recognizing what causes you to unconsciously spend money in the first place. We all have spending triggers — whether it’s impulse-buying in response to stress, social pressure or over-rewarding ourselves when we achieve a goal.

Pay attention to how you respond the next time you’re in one of these situations: Do you often spend more when you’re shopping with friends? Did you significantly inflate your lifestyle the last time you got a raise? Did you have a bad day at work and buy $100 worth of items from Amazon that evening?

Carefully examine what events precede unintentional spending, then gradually work to change them.

4. Change your shopping behaviors

According to poll results from June 2020, about 16% of consumers reported making more impulse purchases online. This behavior leads to hundreds, if not thousands, of dollars a year in unplanned spending.

With one-click buying options, it’s easier than ever to instantly purchase a product from anywhere in the world. Unfortunately, all this convenience can contribute to bad spending habits. As you explore how to control spending habits, consider changing shopping behaviors like:

  • Remove your credit/debit card information from your computer, phone and digital wallets so these details don’t auto-populate at checkout.
  • Wait 24 hours before you check out items in your online shopping cart.
  • Use cash whenever possible.

Research shows people often spend more when they use cards. When you use a card to pay for something, it often makes the money leaving your account less tangible than physically handing over money. Shifting away from cashless transactions for some of your purchases could help you learn how to control spending habits that aren’t healthy for your finances.

Start confidently from where you are

Many of us often spend money without even thinking about it. To put yourself on the path to more mindful money habits, track your spending, identify your spending triggers, pinpoint where you can reduce your spending and change some of your spending behaviors. All of these strategies can help you save money that can then be put into an emergency fund, a retirement plan or a college savings account.

Reviewing where you’ve spent your hard-earned money might be tough. It will be clear to see whether you’ve truly spent your money wisely (and in line with what you value) or if you did not.

But no matter when you start, taking these difficult steps can empower you to better manage your finances — putting you on a path of intention in your financial journey so you can spend when it really counts.