How to Reduce Spending (The Right Way)

There was once in my life when I couldn't control spending, let alone reduce spending. I was fresh out of high school, young, ignorant and oblivious to the concept of personal money management.

I just spent on whatever it is that money can buy - which 'so happens' to be everything, and there was a great sense of freedom (at the time). It wasn't until 2 years later did it dawned upon me that I didn't know how to manage my spending. I just looked into my bank account one day and there sat $0.00. I had nothing, nada, zilch. It was a wake up call.

I knew immediately that I had better reduce spending or face an eternal net worth of zilch. But how do I do that? Where do I begin?

The internet, of course, provided a wealth of information on how one can reduce spending - cut this, cut that, reduce this, lower that. Some are just a complete turn off. The more I read, the more I feel like I was enrolled in some kind of how-to-be-a-miser program.

I really wanted to reduce spending, but not to the point that I'll have to forgo the things that make me happy. So I just sat down, equipped with a paper and pen, and began drafting how I was going to reduce spending - without compromising on my happiness.

Slowly, I realized that reducing spending by means of cutting expenses and not buying or not using things, is NOT SPECIFIC enough.

To reduce spending the right way, I need cut out the things that don’t matter, and keep the things that matters most. This way, I'll get to reduce spending, without giving up on my true wants.

Those ideas then manifested into this article :) If you are looking to reduce your spending without giving up on the things that you truly want (which truly makes you happy), here's how.

Just ask yourself: "What are the things I spend on that don’t matter?" and "Which ones do matter?"

When you’ve identified them, think about how you can get what you want (what truly matters), without spending on the things that don't matter.

Here are some tips to help you get started – few tips that I came up for myself personally so please don’t judge or laugh at me :)

• Eating out – I spend roughly $200 each outing (for luxury dining) and that’s not even considered that luxurious, just some really nice place that serves some really good food. On normal (non-luxury) dining, I spend an average $40-$60 per outing.

I spend money to eat out, but what was it exactly about eating-out that truly mattered? In other words, do I absolutely have to eat out in order to fulfill the happiness that I derive from eating out? That was the real question.

I quickly ruled out restaurant service because it didn't matter. Sure, having great food service would be much appreciated but the thing is, the restaurant's service is not going to matter 5 years from now (or even a year from now). It'll just be a small and irrelevant life experience.

Ambience didn’t matter as well since 90% of the time I'll be completely immersed in conversation with my dinning companions. I didn't care how my food looked like under dim lighting or if the walls of my dining area had paintings by Picasso or Michelangelo.

What I truly wanted, was the company of my family and the happiness of having delicious and wholesome food together :) Subsequently, I asked myself, is there an alternative that doesn’t require me to spend as much?

You guessed it: Great home-cooked food! :) so I decided to learn how to cook.

2 months later, I was able to share great healthy food with my family without spending on things that didn’t matter – The expensive 'service', the pricey 'ambience' and most important of all, someone else's "profit margin".

I only spent time learning to cook and spent time learning where to hunt for fresh and affordable ingredients (which was what truly mattered anyway).

These days, I would cook and whip out something nice and we would all sit in the living room with all our food and enjoy a great movie (something all my family members were happy doing), and this was how I was able to reduce spending on eating-out, while still having what I truly wanted :)

• Shopping for new clothes – my partner loves to shop. Spending for each outing can range from $200 - $1000 and the sky is the limit :) Not that there's anything wrong with that of course.

But one day, I decided to ask her anyway: “What was it about clothes or shopping that really mattered?”

She said she wants to be able to buy new clothes and fill her wardrobe because clothes are essential in staying fashionably trendy.

So I probed further, did designer brands mattered? She said yes, but even if she has designer brands she would still want many, many varieties since she would get bored (for instance: bored with having just one designer handbag).

So this tells me varieties matter too. And since the main thing that truly mattered is staying fashionably trendy, I asked her if a fashion-trendy 'look' can be pursued without going for expensive or designer clothes (& stuffs)?

WHAT WAS I THINKING...

She said ‘No’ and stared me with the ‘I don’t care, you’re going to buy me what I want’ look.

We made a pact, I know she truly wants designer clothes. WHICH 21st CENTURY WOMAN DOESN'T...

We promised to attain a financial position sufficient to give ourselves a monthly ‘luxury’ shopping allowance first, before becoming "occasional spendthrifts".

In the mean time, she understood that she'll have to remain patient (while we both worked on our personal finances) and has since been searching for an alternative to stay fashionably trendy without going for new clothes (to reduce spending).

She turned to ‘creativity’, instead of ‘buying designer’s creativity’: A different match of top and skirts, shirts and pants, a change of some accessories and a mixture of cardigans with the same clothes to keep her looking fashionable and trendy. Now that's what real fashion is all about - creativity! :)

• Socializing was one of the most expensive activities that I ever came across. I would just hang out with a bunch of friends, sipping drinks and chatting on normal weekends and certain weekdays, play a game or two at the bowling alley or go at it at a game of pool.
What I didn’t realize was, my spending on socializing averages $600 per month. Again I asked myself, ‘What really mattered?’ and the answer was simple and direct: The company of my friends and having a great time with them.

So if I can have that, everything else didn’t matter. The solution was easy.

I would invite them over for barbecue party (or somebody will volunteer to organize one), a few guys would be in charge of booze and other light-alcohol beverages, while others would bring whole varieties of BBQ food such as pastas, macaronis, salad and what not.

Result: A wacky good time with friends by having an absolutely-affordable BBQ-beer party. This of course could evolve into greater varieties of parties: Pot-Luck parties, Steamboat parties, etc. Got a better idea to reduce spending on socializing? By all means, go for it!

Coming up with a cheaper alternative does not mean you have to use this alternative all the time. Once in while, I still dine out, I still shop for expensive designer items with my partner, I still socialize in bars and clubs. Why? Because I was able to afford it by managing and reducing my spending. Ironic, isn't it? :)

Reducing your spending is easy, and to reduce spending on things that don't matter to us is even easier. Just ask yourself:

• What truly matters?

• How do I obtain what truly matters without taking up the extra baggage of the things that don't matter?

Remember, the best things in life come for free and if you really open your eyes and free your mind, you’ll begin to think of ideas and see proof that you can have what you truly want (i.e what really matters) without spending much at all.

Please share this blog post if you liked it :)