5 ways to cut back your spending
16:30 Share

This message comes from Capital One. Say hello to stress-free subscription management. Easily track, block, or cancel recurring charges right from the Capital One mobile app. Simple as that. Learn more at CapitalOne.com slash subscriptions. Terms and conditions apply.

This message comes from NPR sponsor, Land's End Outfitters. Your brand is important and they create apparel your team will want to wear. Go to business.landsend.com slash pod 20 and use code pod 20 for 20% off your first product. You're listening to Life Kit from NPR. Hey everybody, it's Marielle.

This is a spendy time of year, isn't it? On average, respondents to a recent Gallup poll said they expect to spend more than $1,000 personally on Christmas and holiday gifts this year. You might also be dropping money on flights or trains or gas to get to family gatherings.

And yeah, it adds up. So this felt like a good moment for some counter-programming. On this episode of Life Kit, we bring you five tips on how to save money in December and throughout the year. And this is not an exhaustive list, of course, but it's a start because most of us don't have unlimited funds. And when we find ways to save money, we give ourselves the freedom to spend intentionally on the things we really want.

This message comes from Capital One. Say hello to stress-free subscription management. Easily track, block, or cancel recurring charges right from the Capital One mobile app. Simple as that. Learn more at CapitalOne.com slash subscriptions. Terms and conditions apply.

This message comes from Capital One, offering commercial solutions you can bank on. Now more than ever, your business faces unique challenges and opportunities. That's why Capital One offers a comprehensive suite of financial services

all tailored to your short and long-term goals. Backed by the strength and stability of a top 10 commercial bank, their dedicated experts work with you to build lasting success. Explore the possibilities at CapitalOne.com slash commercial. A member FDIC.

This message comes from NPR sponsor ServiceNow, the AI platform for business transformation. AI is only as powerful as the platform it's built into. Enter ServiceNow. It puts AI to work for people across your business, providing intelligent tools to help remove frustration and supercharge productivity. And all of that is built into a single platform you can use right now. That's why the world works with ServiceNow. Learn more at servicenow.com slash AI for people.

Support for NPR and the following message come from Indeed. You're driven by the search for better. But when it comes to hiring, the best way to search for a candidate isn't to search at all. Don't search, match with Indeed. Join more than 3.5 million businesses worldwide that use Indeed to hire great talent fast. Get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash LifeKit. Terms and conditions apply.

Before we get back to the show, I want to take a moment and talk about what makes Life Kit and everything you hear from NPR possible. It's you.

NPR is public media, which means we're here to serve you. And we've had a bold vision from the start to create a more informed public. Think of our work as part of the civic infrastructure. It's freely available to everyone. We cover communities that haven't always had their voices heard. And we serve places big, small, rural and urban all across the country, many of which have seen their other news sources shrink or disappear. We can do all this thanks to your support.

So on behalf of the team at LifeKit, I want to say how grateful we are for listeners like you. We appreciate you navigating all of your life moments, big and small, with us. And a huge thank you if you already support our work through NPR Plus or by donating to your local station. Your generosity fuels one of the most trusted news sources in America today.

If you haven't made that leap to contributing yet, Giving Tuesday is today, so it's the perfect time to support what you love. Sign up for perks across more than 25 podcasts with the NPR Plus bundle today. It's a tax-deductible donation that helps make the world a more curious place. So you can feel good about that while you enjoy sponsor-free episodes of Life Kit and exclusive access to our specially curated themed playlists on Apple Podcasts.

Join us at plus.npr.org. Or you can always make a gift at donate.npr.org. And thank you. All right. One of the biggest expenses in any household is food. That's why I'm going to start here. Takeaway one, look for ways to cut costs at the grocery store.

One tip is to buy filling and flexible foods. Beth Monsell is the founder of Budget Bites, a cooking blog, and she likes to use inexpensive filling ingredients to bulk up her recipes. One of those is cabbage. Okay.

Cabbage is so versatile because it can go with so many different flavors and there's a lot of different ways you can prepare it. And it's so filling. Don't forget about potatoes, onions, carrots, even broccoli sometimes can be pretty inexpensive. So take a look in your produce aisle for the ingredients that are a little bit lower price and just try adding those into your recipes and it will really increase the number of servings without increasing the cost.

Lentils and other beans and legumes are another option. You can add them to chili and soup, and you can pair these cheaper items with the more expensive ingredients, like meat.

So, like if I make a pot of chili, normally a recipe for chili will include a pound at least of ground beef. So something that I like to do is reduce that ground beef by half. So I'm still getting that beefy flavor and that satisfying mouthfeel of, you know, actually eating beef. But then I bulk up the recipe with extra beans or maybe even some extra vegetables if I have them, sometimes pasta and rice. Those are all far better.

less expensive per pound than beef is going to be. Now, Beth says before you buy groceries, make a plan and then stick to your list. Having a plan before you go in is absolutely essential. Know what recipes you're going to cook. Write down the ingredients for all of those recipes.

before you go to the grocery store, take that list to your kitchen and just double check for each one of those items because you might not realize you already have some of those things on hand. And then once you have this on paper and you go to the grocery store, you know exactly what you need. You can stay focused so I can get in and get out and get on with my day. If you are having trouble affording groceries, know that you have options.

Look into what food banks are available in your area. I think it's a really great resource that is often overlooked or people think food banks are for people who only have no food. But really, it's like a bridge to help people through these tough times. So you don't have to be getting all of your food at a food bank. Maybe you just need an extra couple of items to help get you through, you know, till your next paycheck. All right. So food is a necessity, obviously, but you can often spend less on it while still meeting your needs.

The same goes for other fixed expenses like housing and transportation. If you want to save a lot of money, maybe because you're living paycheck to paycheck right now, or you have debt to pay off, or you have a savings goal like you want to buy a house, see where you can make big changes to your fixed costs. That's takeaway two.

Kristen Wong is a journalist and author of the book Get Money. She says finding cheaper housing, for instance, can save you a lot more money than just trying to cut back on coffee and other small purchases every day. If you get a roommate or move to a cheaper place, those major decisions are going to save you so much more money. They're harder decisions to make, obviously, but they give you more bang for your buck.

Kristen did this herself once. You know, I was one of those millennials that boomeranged and moved back in with my mom when I was paying my student loan. I paid it off so much faster and I saved so much money. And I'm very lucky my mom doesn't charge me rent. We come from this culture where my mom would still have me living at home if she could. But sometimes you have to give up what you think life should look like to think about what it could look like. Because she made this choice, she was able to get out of debt and focus on her career.

Now, when it comes to transportation, maybe it's an option for you to take public transit more. Or you might decide to move somewhere closer to work so you save money on gas. And if you have a car, shop around for car insurance every year. Look online, see if you can get better rates than what you're currently paying. Okay, now we're going to talk about what you do with your discretionary income. That's what's left over after you pay for food, housing, transportation, and other needs.

There's a lot of stuff we buy because we want it, not because we need it. We often do this when we're stressed, which might be, you know, always, or when we're looking for that hit of dopamine. I do this all the time. I am not judging. Takeaway three, to stop yourself from going overboard and making a bunch of impulse purchases, make a plan and keep track of what you want.

Tiffany Aliche, also known as the Budgetnista, wrote a book called Get Good With Money. I impulse shop as well. But what I've learned is to impulse shop within parameters. So I give myself a weekly, if not monthly, budget of where I can buy things within that budget. That's what I teach people to say, well, how can we do that responsibly?

What does that look like? Is it $25 a week? Is it $50 a week? So look at your budget after fixed costs like rent and insurance and utilities and groceries. What do you have left over? How much of that needs to go toward your debt or your savings? And then how much money do you have to play with? That's your fun budget. Now you decide what you want to spend that fun money on. Tiffany offers this framework. Like it, want it, love it. So a love is long-term joy. Joy.

Joy that's going to last you a year or longer. Likes are short-term joy. That means less than a year I'll have forgotten about this thing. And wants are just instant gratification where not even a day later, I'm not going to be interested in this thing. She says try to spend your money on the love it items. And if I don't have enough at the end of the month, then I really shouldn't be wasting any money on likes or wants. Another helpful technique is to make a buy list.

This tip comes from Paco de Leon, author of Finance for the People and owner of a bookkeeping agency. She keeps a list of all the items she comes across online or in stores and wants. That candle, those cute magnets, that face cream that you're sure is going to change your life.

And she puts them all on the list. And then I have these rules, right? The rule is I cannot buy anything on the buy list until it's been on the list for as little as 24 hours. Really, for me, it's like a month, right? If I still feel some kind of way about this object in one month and it's on my list, I'll buy it. There's been very few things I've bought off this buy list. It feels good enough to just put it on the list.

And I think it confuses my brain and it feels good. It feels like I'm buying it without buying it. Y'all, I've tried this and it's wild how you look back at some of the things on the list a month or two later and think, I can't believe I was going to spend my hard-earned money on that. It's like the spell has broken and now I can think clearly. Okay, so we're setting boundaries with ourselves, right? The next step is to set them with other people. It's easy to overspend because of social pressure.

Takeaway four, when you're out to dinner with friends or going on a group trip or you're just asked to contribute to a gift for somebody at the office, be clear about your financial needs, what you're able to do and what you're not. Let's say you're going to dinner with friends.

Chef and food writer Kiki Aranita recommends talking about who's going to pay the bill ahead of time. I think you need to manage expectations and be very clear, especially if you are inviting somebody out and there's any concern of financial hardship or not being on the same financial footing. You need to make it very clear who's going to pay up front. I don't think it has to be much more difficult than that.

So before you even get to the restaurant, check in with a text. Hey, are we all okay splitting the check evenly? Of course, you can also say something during the meal. You know, if you're at brunch with your friends and everybody else got the bottomless mimosas except for you, speak up. Just be like, hey, guys, I didn't drink. And usually that is enough to be like, oh, right, let's reconfigure the bill a little bit to make it more fair. It should be fine if you just speak up. Problems only arise when somebody doesn't speak up.

Opting out is an option too. Otega Uwagba is the author of a book called We Need to Talk About Money. It's why I've opted into the occasion as a whole.

Or I opt out. So like, because I think it can be really tricky to kind of navigate the bill splitting situation. So I'm either like, okay, well, I'm going out for dinner and this is going to cost me or I can't really afford this at the moment. So I'm going to skip dinner. Maybe I'll meet them afterwards for drinks and just be quite honest about it. She says talking about finances is like a muscle and we need to exercise it.

I think kind of building up the ability to say, hey, this is slightly out of my budget. Do you mind if we go somewhere cheaper? Or do you mind if maybe one of us cooks at home? You know, I can host you guys at mine. And the more you do it, the easier it gets. Now, this muscle will give you the strength to say no when you have to, because people in our lives are going to ask us for money sometimes anyway.

And it can be awkward to decline. Maybe your coworker says, hey, we're all going to go in on a gift for Timmy. You know, Bob's son, it's his kindergarten graduation. We're going to get him some coloring books and a hula hoop and a big bouncy ball. If you could Venmo me like 50 bucks, that should cover it.

I ran this example by Stacey Vanek-Smith. She's a special correspondent for Marketplace. That is so sweet. I love that I work on a team where we, like, are this thoughtful. Financially, I can't do that right now. I don't have that extra money right now. I am so sorry. I'm happy to help in other ways. I could book something or if there's something I can do that doesn't involve money, I'm more than happy to help or pitch in any way I can.

And she says if that ruffles some feathers... They have a right to their own thoughts, as wrong as those thoughts may be. Money is this, like, stand-in for so many things for people. Yeah.

And it gets tied into feelings of like security, freedom, possibility, adventure, opportunity, intelligence, all this stuff. And so when people are talking about money, they're almost always talking about something else. And it's not usually what you associate with money. So if I associate money with like security and you like...

make some comment to me about how I spend my money, it's probably coming from a place of you seeing it as possibility or something else. Generosity. Yes. It's so like we're actually not speaking the same language, even though we think we are, because money is like an abstraction of value. All right. It's time for our last takeaway. Save money by avoiding unnecessary fees and interest. One way to do that is to set up auto pay for your bills and credit cards.

You can do that online or by calling the company or bank's customer service number. Neil Mahoney is an economist at Stanford. Set up auto pay so that when you've got a lot of other stuff going on, things are already in place and they'll take care of themselves and you're going to save yourself the $35 fees three times over for screwing things up. Yeah.

He points out that you should only set up auto pay if you can keep a buffer in your checking account so that you don't overdraft and get hit with overdraft fees. Another tip, look at what fees your bank is charging you. And if you can get better terms elsewhere, consider switching banks.

Here's personal finance expert Yanely Espinal.

The one major bank that I actually use, the way it works is I put my debit card into the ATM machine and say they charge me, you know, $5 fee right there in the spot. I'll say, yes, I accept the fee to get my cash. But then at the end of the month,

The major bank will deposit the $5 fee back into my account. So they'll reimburse you for ATM fees. And a lot of major banks are starting to do that now. The point here is comparison shopping is your friend. You can do it for insurance, for banks, and of course for any other purchases you make. And most of these purchases are not urgent, right? So take your time. Do a little research and find the right bank or product for you.

All right, it's time for a recap. Let's get saving. Takeaway one, cut costs at the grocery store by using inexpensive, versatile filling ingredients like cabbage, broccoli, and lentils. Also make a plan before you go shopping and stick to it. And if you find you're unable to afford groceries, look for food banks in your area, even if that's just as a supplement to what you buy at the store.

Takeaway two, if you want to save a lot of money, maybe because you're living paycheck to paycheck or you have debt to pay off or you have a savings goal like you want to buy a house, see where you can make big changes to your other fixed costs like housing and transportation. Takeaway three, to stop yourself from going overboard with impulse purchases, make a fun budget, keep track of what you want, and maybe wait a day or a month before you buy that thing.

Takeaway four, whether you're dining out with friends or going on a group trip or you're asked to contribute to a gift for somebody, be clear about your financial needs, what you're able to do and what you're not. And takeaway five, save money by avoiding unnecessary fees and interest. Set your bills to auto pay and shop around for banks with the best terms.

For more Life Kit, check out our other episodes. There's one about how to create a financial self-care routine and another on guidelines for lending money. You can find those at npr.org slash life kit. And if you love Life Kit and you just cannot get enough, subscribe to our newsletter at npr.org slash life kit newsletter. Also, we love hearing from you. So if you have episode ideas or feedback you want to share, email us at life kit at npr.org.

This episode of Life Kit was produced by Sylvie Douglas and Claire Marie Schneider. Our visuals editor is Beck Harlan, and our digital editor is Malika Garib. Megan Cain is our supervising editor, and Beth Donovan is our executive producer. Our production team also includes Andy Tegel and Margaret Cerino. Engineering support comes from Ted Meebane and Gilly Moon. I'm Mariel Seguera. Thanks for listening.

This message comes from Thuma. Thuma's furniture and home goods combine craftsmanship, simplicity, and functionality, bringing inspiration and purpose to every home. Explore Thuma's entire collection at Thuma.co or the flagship location in New York City.

This message comes from NPR sponsor, the Capital One Venture X Card. Earn unlimited 2X miles on everything you buy. Plus, get access to a $300 annual credit for bookings through Capital One Travel. What's in your wallet? Terms apply. Details at CapitalOne.com.

This message comes from NPR sponsor Shopify, the global commerce platform that helps you sell and show up exactly the way you want to. Customize your online store to your style. Sign up for a $1 per month trial period at shopify.com slash NPR.