How to Save More Money: Financial Influences, Balance & More

What influences our spending?

Here are some key things to know about what influences your spending.

According to a Harris Poll for TD Ameritrade, nearly half of the people that responded said the way their parents handled money influenced the way they manage their own finances. Almost all others cited some sort of context in their past as the greatest influence on their financial health.

The second greatest influence was the financial state of the household growing up: if growing up your family lacks financial funds, you are likely to be motivated to change that for your own future.

This poll also demonstrates generational differences in how people perceive their parents’ thriftiness with their spending. More than half of baby boomers perceived their parents as frugal, compared to about half as many millennials.

The biggest shift was from both parents being on the same page to one parent being frugal and another parent not being frugal at all.

This Harris poll also showed that more than half of baby boomers saw themselves as frugal, the same proportion that saw their parents as frugal as well. Only a third of millennials saw themselves as frugal, showing how each new generation identifies more as overspenders.

The balance between spending and saving

In our family, we have two roles. I am the finance nerd, no surprise, and my wife is the free spirit. We both need each other, and both of our roles are essential in a healthy financial household.

I respect her ability to help me have fun and spend, and I am grateful when she participates in monitoring and optimizing our income and expenses. This is why we hold our budget meeting each month.

Saving money and spending money go hand in hand. You cannot have a healthy budget without doing both consistently. Identify what role you are in, and if you are single, consider when you are at your best in both roles in your life.

How can I save more money?

Everyone is aware of their expenses on some level. Usually, when you make a big purchase or have an unexpected emergency, you start to really pay attention to money.

For some people, it is right when their credit card declines. You can only reduce your expenses to ultimately zero, but you can virtually increase your income indefinitely.

While we focus on the expense side, there are key categories where you are likely overspending. Paying attention to your trends can help alleviate the stress you feel as you spend day to day.

What could I be saving on?

Here are ten things that you are spending too much on and how you can cut costs.

1. Food

We are either buying in bulk and throwing it out, or eating out and paying a premium for the calories. Use a meal plan that prioritizes cooking your own food, getting inexpensive ingredients, and saving up for quality meals out on special occasions.

2. Clothing

Fashion is all about seasons and styles that wear out faster than those distressed jeans you just bought. Buying quality only based on need will eliminate the constant closet rotation most Americans are engaged in. Do not even get me started on fashion subscription services.

3. New cars

New cars are the most expensive asset that loses value the moment you buy them. Couple this with the rising average car loan payment, and that new ride is breaking your budget.

4. Prescription drugs

Americans across the board pay too much for prescription drugs. Some are even paying full price when their insurance companies should be contributing. This is worth checking with your provider and shopping using different sources like Mark Cuban's costplacedrugs.com.

5. Cellphone plans

It is easy to settle into a cell phone plan and not shop around. Sometimes even your own carrier has discounts that you are not taking advantage of.

6. Vacations

You can make it a part-time job just shopping for travel deals, but sometimes you may end up overspending to rack up those rewards and bonuses.

7. Online shopping

We have all added a couple of extra items to the virtual cart to hit that $25 or $35 threshold for free shipping. That could be a waste, so avoid it by shopping around more.

8. Fancy water

This is my greatest weakness. On my desk now, I have coffee, tea, Zevia soda, and vitamin water. All of these are clever and tasty ways to get you to spend up to 100 times more for something just to keep you hydrated.

9. Coffee

This deserves its own category. I drink coffee every single morning. If you are not making it yourself, expect to pay at least 80% more per cup.

10. Subscription Services

Currently, Netflix has over 40,000 hours of content available. That is over 4.5 years of constant streaming. There is no reason to be subscribed to more than one of those; you can easily pause subscriptions and move to another service if you find you run out of stuff to watch.

How to save more money

When you have a budget that tracks your transactions, it reveals trends that you can address one at a time. Take a look at your budget, review the categories, and try to analyze what expenses you can reduce or minimize.

Remember, it is not about eliminating fun and flavoring your life. It is about focusing on your goals in a way that provides momentum toward achieving your dreams.

What is the category that you overspend on the most? What has your budget revealed to you? Feel free to leave a comment and share!