15 Habits to Save more and spend Less

This time, you’re taking control of your finances! No more impulsive purchases and other thoughtless spending. You’re going to review your habits and finally succeed in saving money. myLIFE has put together a list of tips to help you manage your budget, save, and spend less. Don’t worry, this won’t prevent you from enjoying yourself!*

First of all, to optimize your expenses, you will need to establish a budget. Don’t worry, there’s nothing complicated about it. You just need to list all your resources (salary, family benefits, pension, etc.) and your expenses. We are talking about all your expenses, so don’t forget your takeaway coffee, daily baguette, or parking ticket. Then, categorize them, but avoid adopting a too rigid approach: housing, food, transportation, insurance, health, leisure, etc., and then divide them between fixed costs (rent(s), loan repayment(s), insurance, phone/internet subscriptions, etc.) and variable costs (groceries, fuel, shopping, leisure, etc.).

This classification will allow you to clearly visualize your consumption habits, identify discrepancies to address, and areas to optimize. Once you know the exact state of your situation, it becomes possible to define a budget and anticipate upcoming expenses.

Here are 15 tips to help you manage your budget, spend less, and save.

Managing your budget effectively

 #1 Regularly monitor the activity on your bank accounts

Regularly check your bank accounts and control your income and expenses. You can use a dedicated budget management app or simply your banking app to help you track your spending. Most of them offer to categorize your payments or even set alerts in case of exceeding set limits.

#2 Use a budget management technique

To get started, you can choose a budgeting method. For example, the 50/30/20 approach involves allocating 50% of your income to essential needs, 30% to leisure and pleasures, while the remaining 20% is reserved for savings and investments. You can also try the thematic envelope technique. This involves allocating a fixed amount of cash to each of your spending categories: groceries, leisure, etc., every week or month. The goal is not to spend more than what is available in the envelopes. These methods will help you visualize your expenses and organize your budget. However, be careful not to become trapped in a system.

Every little action counts towards saving, and it starts with adopting good habits at home.

Save on a daily basis

#3 Adopt eco-friendly practices in your home

Every little action counts towards saving, and it starts with adopting good habits at home. Lower the temperature of your heating, turn off the lights when you leave a room, unplug devices on standby or not in use, take showers instead of baths, dry your clothes in the open air if possible, opt for less energy-consuming appliances, etc. Some energy providers offer the possibility to monitor your energy consumption, allowing you to adjust it and save money.

#4 Optimize your travel

Using your car comes with a cost that can heavily impact your budget. If you haven’t already, consider alternatives for your travel. By opting for carpooling, cycling, or public transportation (free in Luxembourg!), you can save money and reduce your carbon footprint! If a car is essential in your daily life, adopt smooth driving without sudden braking or acceleration, maintain it properly to avoid additional costs, and try to consolidate your trips as much as possible.

#5 Automate your savings

One way to save money without thinking about it is to set up an automatic transfer at the beginning of each month to a savings account. If you are consistent, even by depositing small amounts of money, you will succeed in building a precautionary savings that will be available in case of unforeseen events. Also consider setting aside unexpected income (gifts, bonuses, etc.). Over time, you can diversify your savings and use it to finance other projects: vacations, renovations, down payment for a home purchase, preparing for your retirement, etc. Investing in yourself first is one of the keys to achieving financial freedom one day.

Reduce your expenses

#6 Review your monthly subscriptions

Gas/electricity contracts, streaming services, phone, or even gym memberships, scrutinize your monthly expenses and adjust them to your actual consumption habits. Do you really use all the services linked to your current subscriptions? Does the competition offer more attractive rates? Check your contracts and eliminate those you no longer use. Also, verify if there are less expensive alternatives.

#7 Examine your insurance contracts

Home, car, supplemental health, etc. Insurance contracts are often costly and rates can vary from one company to another. Make it a habit to regularly review your insurance (once a year, for example): compare the different offers available on the market, check if your policy still covers your actual needs, ensure there are no duplicates among your contracts, etc.

Wait a few days before buying and take the time to ask yourself if you really need this product or service.

#8 Wait before buying

You tend to easily get tempted by the latest novelties and other enticing offers. Wait a few days before buying and take the time to ask yourself if you really need this product or service. By doing so, you will avoid impulsive and unnecessary purchases.

#9 Sort through your belongings

Review your belongings (clothes, accessories, decoration, kitchen utensils, etc.) and sort them out: which ones do you no longer use, have duplicates of, don’t like, are too worn out, or no longer work? You can sell them, give them away, repair them, or recycle them. Besides the money earned from your sales, you’ll have a clearer view, and it will prevent you from buying items you already own or that will just end up staying in your cupboards.

#10 Consider second-hand

Clothes, furniture, books, electronic devices, the second-hand market continues to grow. You’ll have no trouble treating yourself at a lower cost, and as a bonus, you’ll be making a gesture for the environment.

#11 Rent or borrow instead of buying

Do you need to do some small jobs or maintain your garden? Instead of buying all your equipment, find out if you can rent or borrow it. Drill, hedge trimmer, pressure washer, etc.: DIY stores often offer equipment rental options. A less expensive solution than investing in tools that will only be used twice a year.

The “shopping” budget is often a significant expense. While you shouldn’t deny yourself the pleasure, there are some tips to avoid excessive spending.

#12 Change the way you shop

The “shopping” budget is often a significant expense. While you shouldn’t deny yourself the pleasure, there are some tips to avoid excessive spending: plan your weekly menus in advance, stick to your shopping list, and shop on a full stomach. By choosing the “drive” option, you’ll avoid being tempted in-store. Among other good habits to adopt, you can compare prices per kilo or liter, prioritize seasonal foods, take advantage of bulk discounts and offers, etc.

#13 Plan your holidays in advance

It’s well known that vacations are expensive, but there are ways to reduce the bill. Start by planning this budget several months in advance by setting money aside. Then, to reduce costs, you can book your transportation and accommodation at the right time (in advance or “last minute”), use flight comparison tools, watch for promotions, travel outside school holidays, plan your activities in advance, buy your equipment off-season, or see if your relatives can lend you some. On-site, if you’re staying in a rental or apartment, plan to cook, take advantage of local markets, prefer public transport to taxis, etc.

#14 Take advantage of discounts and sale periods

Before buying, make it a habit to compare prices, whether in-store or online. Don’t settle for the first offers you find. Also, consider promotional codes for your online purchases or loyalty programs from retailers. Finally, try to plan your major expenses during sale or promotion periods. However, remain vigilant against scams and other marketing techniques that make you believe in false bargains.

#15 Find out about discounts and assistance you may be eligible for

Students, young professionals, large families, unemployed individuals, or seniors: several categories of people can sometimes benefit from discounts or special rates (transportation, cinemas, concerts, museums, swimming pools, etc.). Similarly, inform yourself about the assistance you may be eligible for: family allowances, study grants, service vouchers, bonuses, and tax deductions for construction or renovation work, etc. These mechanisms are assets that will help you reduce your expenses.

You now know some tips to save and spend less daily. If you want to delve deeper into the topic, feel free to check our “Budget” files and “Small gestures to save.”

* Content translated from French by the BIL GPT AI tool