5 ways to cut back your spending

Summary

Life Kit Podcast Episode Summary: "5 Ways to Cut Back Your Spending"

Release Date: December 3, 2024

In this enlightening episode of NPR's Life Kit, host Marielle Segarra delves into practical strategies for reducing personal expenses, particularly during the high-spending holiday season. With insights from financial experts and personal finance enthusiasts, the episode offers five actionable takeaways to help listeners manage their finances more effectively throughout the year.

---

Introduction

Marielle Segarra sets the stage by acknowledging the financial strain that the holiday season often brings. Referencing a recent Gallup poll, she notes that the average person anticipates spending over $1,000 on Christmas and holiday gifts, alongside additional costs for travel and gatherings. Recognizing the cumulative effect of these expenses, Marielle introduces five tips aimed at helping listeners save money, thereby enabling more intentional and meaningful spending.

---

Takeaway 1: Cut Costs at the Grocery Store

One of the largest household expenses is food, and Marielle emphasizes the importance of minimizing grocery costs without compromising on nutrition or satisfaction.

Key Strategies:

• Use Inexpensive, Filling Ingredients: Beth Monsell, founder of Budget Bites, recommends incorporating versatile and affordable staples like cabbage, potatoes, onions, carrots, broccoli, lentils, and other beans and legumes into meals. These ingredients can bulk up recipes, making them more cost-effective.

  "Cabbage is so versatile because it can go with so many different flavors... it’s so filling."
  — Beth Monsell (05:11)

• Plan Before Shopping: Beth advises creating a detailed meal plan and shopping list to prevent impulse buys and ensure that only necessary items are purchased.

  "Know what recipes you're going to cook. Write down the ingredients… and stick to it."
  — Beth Monsell (06:19)

• Utilize Community Resources: If grocery costs become unmanageable, Beth suggests leveraging food banks as a supplementary resource.

  "Food banks are like a bridge to help people through tough times…"
  — Beth Monsell (06:50)

---

Takeaway 2: Make Big Changes to Fixed Costs

For significant savings, Marielle highlights the potential of reducing fixed expenses such as housing and transportation.

Insights from Kristin Wong:

• Cheaper Housing: Kristin Wong, journalist and author of Get Money, emphasizes the substantial savings that can come from finding more affordable housing options.

  "Finding cheaper housing can save you a lot more money than just trying to cut back on small purchases every day."
  — Kristin Wong (07:46)

• Personal Experience: Beth shares her own experience of moving back home to eliminate rent payments, which accelerated her debt repayment and career focus.

  "I was paying my student loan so much faster and I saved so much money…"
  — Beth Monsell (07:57)

• Transportation Savings: Options like using public transit or relocating closer to work to save on gas are recommended. Additionally, shopping around for car insurance annually can lead to better rates.

---

Takeaway 3: Manage Discretionary Income and Impulse Purchases

Controlling discretionary spending is crucial for avoiding unnecessary expenditures.

Advice from Tiffany Alice (The Budget Nista):

• Set a Fun Budget: Allocate a specific portion of your discretionary income for non-essential purchases.

  "I give myself a weekly, if not monthly, budget of where I can buy things within that budget."
  — Tiffany Alice (09:16)

• Categorize Purchases: Tiffany introduces the "Want, Love, Let Go" framework to prioritize spending on long-term joys over fleeting desires.

  "Spend your money on the love items… 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."
  — Tiffany Alice (10:00)

Techniques from Paco De Leon:

• Create a Buy List: Maintain a list of desired items and implement a waiting period (e.g., 24 hours to a month) before making a purchase decision.

  "If it's been on the list for a month and I still want it, I'll buy it. Otherwise, I move on."
  — Paco De Leon (09:39)

---

Takeaway 4: Set Financial Boundaries in Social Situations

Navigating social obligations without overspending requires clear communication and boundary-setting.

Recommendations from Kiki Aranita and Ortega Oagba:

• Discuss Payment Upfront: Before dining out or attending events, clarify who will cover the bill to manage expectations and prevent awkwardness.

  "Be very clear, especially if you are inviting somebody out… before you even get to the restaurant, check in with a text."
  — Kiki Aranita (12:11)

• Opting Out Respectfully: If an event is beyond your budget, it's acceptable to decline participation or suggest more affordable alternatives.

  "I can’t really afford this right now, so I’m going to skip dinner… I’m happy to help in other ways."
  — Stacy Vanek Smith via Beth Monsell (12:50)

Beth emphasizes the emotional aspects of money conversations, noting that differing associations with money can lead to misunderstandings.

"Money is a stand-in for so many things… We're actually not speaking the same language, even though we think we are."
— Beth Monsell (14:55)

---

Takeaway 5: Avoid Unnecessary Fees and Interest

Minimizing fees and interest payments is essential for keeping more money in your pocket.

Expert Tips from Neil Mahoney and Yaneli Espinal:

• Set Up Autopay: Automate bill payments and credit card dues to avoid late fees, ensuring a buffer to prevent overdrafts.

  "Set up autopay so that when you've got a lot of other stuff going on, things are already in place."
  — Neil Mahoney (15:25)

• Compare Banking Options: Regularly review and compare bank fees, considering credit unions or fee-free banks to reduce costs.

  "Comparison shopping is your friend… Take your time, do a little research and find the right bank or product for you."
  — Yaneli Espinal (15:50)

Beth adds that many major banks are now reimbursing ATM fees, offering a more competitive landscape for banking services.

"A lot of major banks are starting to... reimburse you for ATM fees."
— Beth Monsell (16:08)

---

Conclusion and Recap

Marielle provides a concise recap of the five takeaways:

1. Cut Costs at the Grocery Store: Use affordable, versatile ingredients and plan your shopping.
2. Adjust Fixed Costs: Make significant changes to housing and transportation to achieve greater savings.
3. Manage Discretionary Spending: Set a fun budget and control impulse purchases.
4. Set Financial Boundaries: Communicate clearly about your financial limits in social settings.
5. Avoid Fees and Interest: Automate payments and choose banking options with minimal fees.

These strategies collectively empower listeners to take control of their finances, reduce unnecessary spending, and foster a more intentional approach to money management.

For more insights, listeners are encouraged to explore additional Life Kit episodes on financial self-care routines and lending guidelines available at npr.org/LifeKit.

---

Production Credits: This episode was produced by Sylvie Douglas and Claire Marie Schneider, with contributions from Beck Harlan (Visuals Editor), Malika Garibaldi (Digital Editor), Megan Cain (Supervising Editor), and Beth Donovan (Executive Producer). The production team also includes Andy Tagl and Margaret Serino, supported by engineers Ted Mebane and Gilly Moon.

Transcript

[Sponsor Announcer]

Support for the following Message come from LinkedIn ads. With LinkedIn ads, you can reach professionals relevant to your business, target them by job title, industry, company and more by launching your next campaign with a free $100 ad credit at LinkedIn.com results. Terms and conditions apply.

[Marielle Segarra]

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 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.

[Sponsor Announcer]

This message comes from NPR sponsor Progressive Insurance, where drivers who save by switching save nearly $750 on average.

Get your [e-mail] and see if you.

Could save Progressive Casualty Insurance Company and affiliates national average 12 month savings of $744 by new customers surveyed who saved with Progressive between June 2022 and May 2023. Potential savings will vary.

Support for the following Message come from LinkedIn ads. With LinkedIn ads, you can reach professionals relevant to your business, target them by job title, industry company and more by launching your next campaign with a free $100 ad credit at L. Terms and conditions apply. This message comes from NPR sponsor Atlassian. Atlassian makes the team collaboration software that powers enterprise businesses around the world, including over 80% of the Fortune 500. With Atlassian's AI powered software like Jira, Confluence and Loom, you'll have more time to do the work that matters. In fact, Atlassian customers experience a 25% reduction in project duration per year. Unleash the potential of your [e-mail] this message comes from NPR sponsor Merrill. Whatever your financial goals are, you want a straightforward path there. But the real world doesn't usually work that way. Merrill understands that. That's why with a dedicated Merrill advisor, you get a personalized plan and a clear path forward. Go to ML.combullish to learn more. Merrill, a Bank of America company what would you like the power to do? Investing involves risk. Merrill Lynch, Pierce, Fenner and Smith, Inc. Registered Broker Dealer, Registered Investment Advisor Member.

[Marielle Segarra]

SIPC hey, it's Anamaria Sayer, co host.

[Sponsor Announcer]

Of Alt Latino from NPR Music.

[Marielle Segarra]

Today is Giving Tuesday the perfect time to give back to NPR for all the news, music, stories and overall good vibes it brings to your life.

[Sponsor Announcer]

Please give [e-mail] thanks.

[Marielle Segarra]

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 Life Kit, 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 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 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 1 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.

[Beth Monsell]

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.

[Marielle Segarra]

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.

[Beth Monsell]

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 sometimes pop pasta and rice. Those are all far less expensive per pound than beef is going to be now.

[Marielle Segarra]

Beth says, before you buy groceries, make a plan and then stick to your list.

[Beth Monsell]

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.

[Marielle Segarra]

If you are having trouble affording groceries, know that you have options. Look into what food banks are available in your area.

[Beth Monsell]

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.

[Marielle Segarra]

All right, so food is an essential, 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. Kristin 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 cost and other small purchases every day.

[Beth Monsell]

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.

[Marielle Segarra]

Kristen did this herself once.

[Beth Monsell]

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.

[Marielle Segarra]

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 3 To stop yourself from going overboard and making a bunch of impulse purchases, make a plan and keep track of what you want. Tiffany Alice, also known as the Budget. Nista, wrote a book called Get Good With Money.

[Sponsor Announcer]

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?

[Marielle Segarra]

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.

[Sponsor Announcer]

So a love is long term 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.

[Marielle Segarra]

She says. Try to spend your money on the love items and if I don't have.

[Sponsor Announcer]

Enough at the end of the month, then I really shouldn't be wasting any money on likes or wants.

[Marielle Segarra]

Another helpful technique is to make a buy list. This tip comes from Paco De Leon, author of Finance for the People. An 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 4 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.

[Beth Monsell]

On the same financial footing.

[Marielle Segarra]

You need to make it very clear who's going to pay upfront. 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. Ortega Oagba is the author of a book called we need to Talk About Money.

[Sponsor Announcer]

So I either opt in to 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.

[Marielle Segarra]

She says talking about finances is like a muscle and we need to exercise it.

[Sponsor Announcer]

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.

[Marielle Segarra]

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, 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 Stacy Vanek Smith. She's a special correspondent for Marketplace. That is so sweet. I love that I work on a.

[Beth Monsell]

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 in any way I can.

[Marielle Segarra]

And she says if that ruffles some feathers, they have a right to their.

[Beth Monsell]

Own thoughts, as wrong as those thoughts may be. Money is this, like, stand in for so many things for people, 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.

[Marielle Segarra]

And it's not usually what you associate with money.

[Beth Monsell]

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.

[Marielle Segarra]

Generosity, something else.

[Beth Monsell]

Yes. So, like, we're actually not speaking the same language, even though we think we are, because money is like an abstraction of value.

[Marielle Segarra]

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 autopay 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.

[Sponsor Announcer]

And they'll take care of themselves and.

[Marielle Segarra]

You'Re going to save yourself the $35.

[Sponsor Announcer]

Fees three times over for screwing things up.

[Marielle Segarra]

He points out that you should only set up autopay 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 Yaneli Espinal.

[Sponsor Announcer]

Fees definitely going to be lower and better at credit unions in general compared to major banks. But I would say now you're starting to see key players in the major banking space completely eliminate maintenance fees on a month to month basis or offer.

[Beth Monsell]

You free ATM usage.

[Sponsor Announcer]

So 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.

[Marielle Segarra]

I'll say, yes, I accept the fee.

[Beth Monsell]

To get my cash, but then at.

[Sponsor Announcer]

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.

[Marielle Segarra]

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 urgen. 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 1 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 2 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 3 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 4 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 5 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 [e-mail] LifeKit and if you love Life Kit and you just cannot get enough, subscribe to our [e-mail] LifeKitnewsletter Also, we love hearing from you, so if you have episode ideas or feedback you want to share, email [e-mail] 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 Garibaldi. Megan Cain is our supervising editor and Beth Donovan is our executive producer. Our production team also includes Andy Tagl and Margaret Serino. Engineering support comes from Ted Mebane and Gilly Moon. I'm Marielle Segarra. Thanks for listening.

[Sponsor Announcer]

This message comes from NPR sponsor Merrill. Whatever your financial goals are, you want a straightforward path there, but the real world doesn't usually work that way. Merrill understands that that's why with a dedicated Merrill advisor, you get a personalized plan and a clear path forward. Go to ML.combullish to learn more. Merrill, a Bank of America company. What would you like the power to do? Investing Involves Risk Merrill Lynch, Pierce, Fenner and Smith Inc. Registered Broker Dealer Registered Investment Advisor Member.

SIPC this message comes from NPR sponsor Rosetta Stone, an expert in language learning for 30 years. Right now, NPR listener Rosetta Stone's lifetime membership to 25 different languages for 50% off.

Learn [e-mail] NPR this message comes from NPR sponsor Solventum. 3M Healthcare is now Solventum. They're a new company with a long legacy of creating breakthrough solutions for their customers and are ushering in a new era of care. Learn more@ solventum.com.