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10 ways to cut expenses by 10%

Key takeaways

  • By saving just $14 a day, you’ll have over $5,000 more in your bank account at the end of the year. Too much? Saving about $5.50 per day could add up to more than $2,000 after a year.
  • Knowing what’s coming in and out of your accounts is a crucial first step in your savings journey.
  • There are countless free and low-cost activities for you to explore.
  • You can help grow your money by regularly transferring cash into an investment or cash management account.

Want to save more but feel overwhelmed with the thought of actually doing it? You’re far from alone. The trick to saving more and spending less is to make small changes over time and build up your savings habit. While making bigger cuts could lead to bigger savings—like moving to a less expensive home, driving an older model car, or living with roommates—your quality of life now is a consideration too.

“Changes need to be comfortable to be sustainable,” says Kelly Lannan, senior vice president, Emerging Customers, at Fidelity Investments. “So be honest with yourself about the trade-offs you’re willing to make and how they’ll help you reach your goals.”

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To kick off your non-spending spree, get to know your financial situation inside and out. While a deep dive into your money can feel daunting, knowledge is power. Once you get clarity on what’s coming in and going out, you can set a realistic budget that works for your life.

Ready to get going? Here are a few ways to cut expenses.

  1. Cut energy costs. You can potentially save hundreds of dollars a year with little effort. Among the tactics to deploy: Install a programmable thermostat that adjusts temperatures automatically, switch to energy-saving LED lights, seal up window cracks with caulk, and strategically use blinds, drapes, and other window coverings. If you're considering more significant upgrades, look into any federal or state incentives for improving your home's energy efficiency.
  2. Curb impulse purchases. Pull up your last few credit card statements and scrutinize your spending for weak spots. Do you typically buy while scrolling through social media? While shopping at big box stores? Once you know your vulnerabilities, you can strengthen your defenses. Consider opting out of services that simplify buying online and removing credit card numbers saved on a retailer’s site. When shopping in a store that has tempting items, leave your credit cards at home or in your car’s glove compartment and carry cash.

    Finally, consider a cooling-off period overnight or for a few days. See if you keep thinking about the item you had your eye on. If it haunts your thoughts, make room in the budget. If you never think about it again, you made the right choice.

  3. Embrace the art of negotiation. “Call your cable or phone company and ask for a discount,” Lannan advises. “You’d be surprised at what they might be willing to offer.” Often, providers will reduce your fee if you say you’re considering a switch to their competitor. While on the phone with the service representative, ask them to review your use of their services. You could be spending extra on internet speed or cable channels you don’t need. Buoyed by your successful dealmaking, you can then contact other providers, such as your insurance company, to haggle with them.
  4. Seek out secondhand goods. “Buying things used or “pre-owned” is a great way to buy a higher-priced good at a more affordable price,” says Lannan. “There are a lot of great online resellers, but you can also check out a local thrift store, online marketplaces, or yard sales in your area.” Added incentive: You’ll also help to reduce landfill waste and aid the planet.
  5. Capitalize on free items and events. From fitness classes and concerts to furniture and exercise equipment, there’s a plethora of freebies out there. Community websites, social media groups, and event-focused sites like Eventbrite and MeetupTM are filled with free activities. You can also find or join a Buy NothingTM group in your area. Or the neighborhood app Nextdoor® can be a great source for free and low-cost items. In addition, libraries typically provide much more than books. You can often access streaming movies, video games, and online courses, as well as get free day passes to local museums, exhibits, and gardens. To get outside for fresh air and free exercise, the Alltrails® app can direct you to local trails for hiking and sightseeing.
  6. Hunt for bargains. Big-ticket items like furniture and appliances are typically marked down a few times each year, such as on Black Friday and Labor Day weekend, Lannan says. “You can also search for sales on social media platforms, like TikTok and Instagram,” she adds. “Influencers are often posting unique codes for sites that give a certain percentage off, so do a quick search to see if you can get a discount before clicking ‘purchase.’” You can take your research further with an internet search of the retailer site name and the phrases “coupon code” or “discount code.”
  7. Axe unused subscriptions. Pull up your recent credit card statements again, look for reoccurring subscriptions, and contact the providers to end services that are no longer of interest. Be ruthless and push away any guilt. It’s A-OK to terminate that fitness, dating, or meditation subscription if you’re not using it. You can always resubscribe if it interests you later. Stay on top of subscription renewals and free trial end dates by setting a calendar reminder and evaluating your use before re-upping.
  8. Unleash your inner chef. Preparing meals at home—yes, even brown bagging your lunch—can save you a bundle. Pro tip: Using a grocery shopping list can keep you from buying unneeded items.

    Want to cut food costs further? Buy in bulk and freeze what you won’t use immediately.

    You can also spend less by opting for “ugly” produce, which is perfectly fine to eat but has bumps or blemishes that make them ineligible for grocery store sales. You can find these nonconformist fruits and vegetables at local farmers markets, through community supported agriculture (CSA) subscriptions, or by searching online for ugly or imperfect produce in your area.

  9. Review your insurance. Insurance rates tend to go up regularly so it can make sense to shop around for home and auto insurance at regular intervals to make sure you're getting the best deal. Calling to tell your insurer that you plan to cancel your existing policy may turn up some unexpected deals as well.
  10. Partner with an accountability buddy. “Get your friends and family in on your money journey,” says Lannan. “By sharing your own goal of spending less, you can get those around you on board with looking for cheaper activities. It’s also helpful just to have someone to talk to about money.” If those in your inner circle don’t embrace the benefits of being thrifty, you can find fellow savers in financial-focused online community forums and social media groups.

Amplify what you saved

Beginning to cut expenses can take some time, but the more you practice, the better you'll get. Once you've freed up money to save, put it to work. Setting up a regular automatic transfer from your checking to an investment or high-yield savings account can help grow the money you saved while reducing the temptation to spend it. Your cash will be out of sight and out of mind—giving it the opportunity to potentially grow.

And one more thing: Avoid investments with high fees and commissions. It’s not just what you make that counts, but what you keep.

Saved some money? Now put it to work.

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This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

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The third parties mentioned herein and Fidelity Investments are independent entities and are not legally affiliated.

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