How can I spend less?
One things about psychology - people spend more money when its an abstract concept instead of having cold, hard cash. What does this mean? People spend more money when they use credit cards for day to day purchases. While I still use a credit card for day to day purchases, there's a big difference between bringing $200 to costco to pay for groceries and laying out 10 $20 bills vs swiping a card when you see a number flash on the screen. If you're truly looking to reduce expenses, keep this in mind. Try the Envelope Budgeting System. It is a pretty good system for managing your discretionary outflows. Also, be sure to pay yourself first. That means treat savings like an expense (mortgage, utilities, etc.) not an account you put money in when you have some left over. The problem is you NEVER seem to have anything leftover because most people's lifestyle adjusts to fit their income. The best way to do this is have the money automatically drafted each month without any action required on your part. An employer sponsored 401K is a great way to do this. Try having money automatically deducted from your paycheck and put into a retirement account or savings account.  As long as you don't have a problem with spending more than you have, the easiest way to stop spending money is to have it automatically put somewhere that you can't (or are unlikely to) touch it. "There are many tactics you can use.  If your biggest problem is regretting your larger purchases, I'd suggest giving yourself rules before making any purchases over a certain minimum dollar amount that you set for yourself.  For example, if that amount is $50 for an item, then any item starting at an average price of $51 would be subject to these rules. One of your long-term goals ought to be to become the kind of person who finds joy in saving money rather than spending it.  Make friends with frugal people - look for those who prefer games nights and potlucks to nights out at the club buying expensive drinks and dinners at the newest steak joint in town.  Learn the thrill of a deal, but even more learn the thrill of your savings growing.  You don't want to enjoy money in the bank for the purposes of becoming a miser.  Instead you want to realize that money in the bank helps you achieve your goals — buying the house you want, donating a significant amount of money to a cause you ardently support, allowing you to take a dream vacation, letting you buy with cash the car you always wanted, the possibilities are endless.  As Dave Ramsey says, ""Live like no one else, so you can live like no one else."""
The same as you would save for anything else, buget and make sure your expenses are less than your income each week. Put away a little each week for the item you want to buy, and when you have saved up enough for the item you can buy it. In the mean time whilst you are saving for it, you can shop around to see where you can buy it at the lowest price. "Many of my friends turn to me for financial advice, and here's what I always tell them because it's super effective for me... 1) I opened an online bank account with Scottrade for which I did not request a card or checks. I set up direct deposit straight to that account. It would be a complicated pain to take money out of that savings. The only time I did so was to buy my house (which was the purpose of the savings) and it involved a wire-transfer and printing of the form to fill out and faxing it in, etc. I have continued to use the account to save for my second house. I basically completely forget that the account is even there or that I am ""missing"" a large chunk of my money. 2) It is VERY important to actually budget for spending money to continue to spend on impulse items. Basically allow yourself to spend money on yourself but in a controlled way. Decide a specific amount that you want to put in a separate account that is just for you to spend to your hearts content and have it direct deposit. I find, (and Dave Ramsey also encourages this) that when I know how much money I am going to blow, I feel much more in control and it causes me to not get carried away and blow more than I realized. Take this a step further... Decide specifically what you want to buy for yourself, and label the account accordingly. For example, I decided back in March that I wanted to buy an Xbox One for when Star Wars Battlefront comes out this November. I calculated exactly how much money I would need at that time, figured how many paychecks I would receive until then, and did the math to determine exactly how much I need to direct deposit into an account JUST for saving to buy the Xbox and game. I use CapFed, and I can actually rename the account as it is displayed, so I called it ""Xbox fund"". Seeing that title, a reminder of what I really want"" encourages me to not touch it. What is your goal behind wanting to save money better? What are you saving for? Label your account accordingly so you don't just see it as money, but as progress." If it's feasible, try to get one card down to zero balance, and preferably one of your cash-back cards.  Then keep that at zero every month (pay it off in full), and use it for your purchases as you describe above. The idea would be to get it so that you are not paying interest on your month to month purchases.  This not only reduces the 20% or whatever that you're paying on that balance, but also the 20% or whatever you're paying on those purchases - remember, a card you carry a balance on charges you interest on those purchases from the current month. If this isn't feasible (if these are all very high balance cards), then I suppose the way you're currently doing it would be okay, though I think you're overthinking things to some extent - but with 80% interest, if that's a significant pile of money, you may need to as clearly that needs to be tackled first.  I think it's mostly better for you to pay your day to day stuff out of pocket and not use your cards the way you are suggesting, but with the 80% loan(s) you may need to. The reason I say it's better not to use your card the way you suggest is that it is difficult to do properly and never get it wrong (i.e., never go over a balance), and it's also leaving you in the habit of using credit.  It doesn't help you budget necessarily, either.  Instead, set up a fully developed budget that includes all of those minimum payments and pay them.  Certainly once you have the > 50% debt handled, I would switch to this method (not using credit cards at all). "Honestly just keep track of your income and spending on a piece of paper. Write down every single thing.  Also set goals like ""ok I will make $1000 this month, and my goal is to pay bills of $200 and only spend $500 therefore I should easily be able to save $300"" or something like that.   Just do it there's no magic trick despite what some million stupid articles and forum posts will lead you to believe.   Saving money is like being in good shape... or keeping yourself clean... it's an every day, every hour kinda thing" The best thing to do right now is track your spending. You know you're saving 1k a month, and you know you're spending 1k a month on rent. That's 24k so far. I presume you'll have some income tax taken out, let's assume it's another 6k to round us neatly up to 30k. Since you earn 80k and you've spent 30k so far, you have another 50k unaccounted for. If you're in the USA I'd recommend using mint.com or a similar service to automatically track your transactions, or even just a spreadsheet if you don't like handing out your bank details (and you shouldn't). After that, I agree with SoulsOpenSource's answer. Write a budget and try to figure out where the fat can be trimmed. When I started tracking I saw I was spending almost a hundred bucks every week on fast food, due to poor planning and laziness. I decided to cook more and plan better and now I'm spending less than half that - in the last year I've saved almost three thousand dollars! If you want to save up for your future (and good on you if you do!) then there'll be some choices to make ahead. If you're spending a few hundred bucks on going out drinking every weekend, or you grab two coffees every day, or you buy fifty blurays a month (do people still buy blurays?), you'll have to ask yourself: Will I be happier spending money here than saving for my future? "Realize that some friends are a bad influence, and maybe aren't really ""friends"". Don't be afraid to say ""sorry, I can't make it tonight"".  Don't be afraid to go out shopping and not buy anything.  Make sure they know why (Too much Credit Card Debit, saving for a house, etc).  If your habits suddenly change with no explanation, they may think you are dissing them.  But if you explain your reasons, they will probably support you (if they are real friends).  In fact, they probably have the same money issues.   Suggest lower-cost alternatives to hanging out.  Instead of going out, suggest they come over to your place and watch a movie, play board games, Wii, etc.  You can have snacks at your place.  Alcohol is a lot cheaper when you pour it yourself!" "First, you must prioritize what a ""need"" and what a ""want"" is.  This is different for everyone but generally, I think most people will agree that impulse items are ""want"" items.  Look at the item, hold it, put it back and wait 30 days.  Put the money that the item costs $x into your savings account (transfer from checking, straight deposit, etc) Come back to the store and hold the item again and as ""did I miss the fact that I didnt get it 30 days ago?"".  95% of the time, the answer is no.  You saved $x for 30-days, and received what is a tiny bit of interest for it. This is cause for celebration!  If you repeat this for every item you THINK you ""need"" or ""want"" then you'll be amazed at what you saved.  Dont waste this money on a vacation to the islands either!  Keep saving.   There will be plenty of rainy days when you'll have wanted to trade that island vacation (or the impulse items you bought that you used once or twice and are lost in your garage somewhere) to pay for some unexpected emergency.  Trust me on this!" "I've found at various times we've spent a lot less when we've been absorbed by ""cheap pastimes"" or passions, such as: It's incredible how fast some things can burn through your money:" "Spend less.   As @jldugger said, shop around for textbooks.  Make sure to look for used books: you can sometimes save a lot of money there. Be smart about food money.  I could go to our on-campus grill and get a sandwich and a salad for lunch.  If I packed both with toppings, the salad could be a 2nd meal for the same day.  If you have the option, get a meal plan that is just 1 meal a day, and eat a lot that meal. Don't do the starbucks ""pay several dollars for a coffee each day"" thing.  Small-ish regular expenses add up quickly.   Quit smoking (if applicable). Ditch your car if possible.  Some colleges are in cities with good public transportation or are small enough that a bike will do.  Cars are very expensive.  Try to find free activities to do in your free time.  Usually college towns are great places to find free fun.  Pick-up sports, student concerts/art shows, playing board/card/video games. Make sure to track how you're spending money to look for areas where you could be spending less.  There are plenty of tools available to help with this.   Some on-campus jobs involve sitting around and occasionally doing something: IE working the checkout desk at the library.  A job like this (if you can find one) can effectively pay you for doing our homework. One other very important college-related financial tip is to not take out more loans than you can afford.  I've heard a good rule of thumb is not take our more loans than you expect to earn your first year after graduating.  Look up average starting salaries for the career you realistically expect to have after you graduate.  If you would need to borrow much more than that to get your degree, rethink your plans.  Being a slave to a bank for years is a crappy way to spend your life." Apart from what others have contributed.  Look at all your usual spendings. Can they be cheaper? (Telephone, Electricity, Gas, Car, Mortgage, Loans, Insurance...) Whenever you are tempted to buy anything, ask yourself: Do I need this? If the answer is 'Yes' go ahead and buy (food, basically). Otherwise, restrain yourself. Most things in life can be bought cheaper. Most things in shops are useless. For example, how many pairs of shoes do you need? You can drink water from the tab. You don't have to go to restaurants or bars, and if you do, you could budget yourself to some amount. If the restaurant is more expensive, walk. My 0,02€ "First of all, I have to recognize up front that my ""spending personality"" is frugal. I don't recreational shop, and I save a lot of my total income. Building a budget and sticking to it is difficult, especially for people who are closer to living paycheck to paycheck than I. Theoretically, it should be easy to stick to a budget by overestimating expenses, but for many people planning to spend more than necessary isn't a luxury available. That said, I have a system that works for me, maybe it can work for you. This system lets me see how much I have to spend, and close to optimally arranges assets. As you can see, this system relies on some pretty strong upfront planning and adherence to the plan. And what you might not realize is that you can deviate from the plan in two ways: by spending variations and by timing variations. Credit should really help with a lot of the timing variations; it takes a series of expenses and translates them into one lump payment every month.  As for spending variations, like spending 20 dollars for lunch when you only budgeted 5, it turns out this technique helps a lot. Some academic work suggests that spending with plastic is more likely to blow your budget than cash, unless you make detailed plans. But it sounds like your main problem is knowing whether you can afford to splurge. And the future minimum balance of your checking account can be your splurge number." "Budgeting is a tool for planning, not for execution. It sounds like you don't have a problem BUDGETING (planning what to spend on what things) but rather with the execution of your plan. That is - living frugally. This is primarily an issue of self control and personal psychology - not an issue with the mechanics of budgeting and finance, which explains why the most popular personal finance ""gurus"" (Dave Ramsey, Suze Ormond) deal as much with your relationship to money and spending as they do with financial knowledge. There is no easy answer here, but you can learn to spend less. One helpful thought is to realize that whatever your current income is, someone in your community is currently making less than that and surviving. What would you do differently if your real, actual income was $100 or $200 less than it is currently. If your food budget is a concern, learn to cook cheaply. (Often, this is more healthy.) You mentioned schooling, so I assume you are on or near a college campus. Many colleges have all sorts of free-food opportunities. (I used to eat free vegetarian meals weekly at a Hare Krsna temple. Price of admission: listening to the monk read from the Bhagavad Gita.) Fast food is, of course, a complete no-no on low-budget living. It probably goes without saying, but just in case you haven't: cancel cable, get a cheap phone plan (Ting is excellent if available in your area), and otherwise see how you can squeeze a few dollars out of your bills. On the subject of frugality, I have found no book more enlightening than: Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing, and Saving" "In the end, this is really not a finance question. It's about changing one's habits. (One step removed, however, since you are helping a friend and not seeking advice for yourself).  I've learned a simple cause & effect question - Does someone who wants (goal here) do (this current bad habit)? For example, someone with weight to lose is about to grab the chips to sit and watch TV. They should quickly ask themselves ""Does a healthy, energetic person sit in front of the TV eating chips?""  The friend needs to make a connection between the expense he'd like to save up for and his current actions. There's a conscious decision in making the takeout purchase, he'd rather spend the money on that meal than to save .5% (or whatever percent) of the trip's cost.   If he is clueless in the kitchen, that opens another discussion, one in which I'd remark that on the short list of things parents should teach their kids, cooking is up there. My wife is clueless in the kitchen, I taught our daughter how to be comfortable enough to make her own meals when she wants or when she's off on her own. If this is truly your friend's issue, you might need to be a cooking spirit guide to be successful." Maybe minimalism is an option for you. Make your self clear what you really want You only buy what you really need and for that you spend the money. Then there is no point of saving money, i.e. I for example like to invite friends and cook them some fancy diner with expensive products, but the value I get from that exceeds any money I spend. On the other hand most present are the opposite, they have less value to recipient than what they originally have costs. "First, let me answer the question the best way I can: I don't know if there are any studies other than those that have already been mentioned. Now, let's talk about something more interesting: You don't need to base your behavior on any study, even if it is scientific. Let's pretend, for example, that we could find a scientifically valid study that shows that people spend 25% more when using a credit card than they do when spending cash.  This does not mean that if you use a credit card, you will spend 25% more.  All it means is that the average person spending with a credit card spends more than the average person paying cash.  But there are outliers.  There are plenty of people who are being frugal while using a credit card, and there are others who spend too much cash.  Everyone's situation is different.  The idea that you will automatically spend less by using cash would not be proven by such a study. When hearing any type of advice like this, you need to look at your own situation and see if it applies to your own life.  And that is what people are doing with the anecdotal comments.  Some say, ""Yep, I spend too much if I use a card."" Others say, ""Actually, I find that when I have cash in my wallet, I spend it on junk.""  And both are correct.  It doesn't matter what the study says the average person does, because you are not average. Now, let's say that you are a financial counselor who helps people work through disastrous financial messes.  Your client has $20,000 in credit card debt and is having trouble paying all his bills.  He doesn't have a budget and never uses cash.  Probably the best advice for this guy is to stop using his card and start paying cash.  It doesn't take a scientific study to see that this guy needs to change his behavior. For what it is worth, I keep a strict budget, keeping track of my spending on the computer.  The vast majority of my spending is electronic.  I find tracking my cash spending difficult, and sometimes I find that when I have cash in my wallet, it seems to disappear without a trace.  :)"