Want to be debt free? Reducing spending is one of the most challenging but financially rewarding things that you can do to tackle your money problems.

Spending more than you earn is one of the easiest ways to fall into a debt spiral where borrowing is used to fill gaps in spending and more income is consumed paying interest on that borrowing.

Even if you aren’t in debt, living within your means is a financially savvy option. It can also help you save more money for a rainy day or put more money towards your retirement.

In this blog post, we share some easy to implement tips that can help you reduce your spending.

Set a budget

A budget is a money saver’s best friend.

Start your budget by working out all of your monthly expenses and separating them into necessities (like housing costs, food and travel expenses) and non-compulsory expenses (like eating out, Starbucks coffee and impulse buys).

Once you know how much you are currently spending, you can start to identify areas where you can save money to reduce your spending relative to your income.

Use the Demotivator

Struggling to cut certain spending habits? Money Saving Expert has a great tool called The Demotivator.

The Demotivator calculates how much you spend on certain luxuries each year and also tells you how many weeks you need to work in order to pay for those luxuries.

We tried it with some of our daily expenses and the results are pretty shocking.

Think about your priorities

Reducing your monthly expenses doesn’t need to be all doom and gloom. To stay happy and fulfilled while you are saving money, it is important to work out what’s really valuable to you.

Some people value nights out with their friends, others prefer to save money and spend it on a big holiday once per year. Some people like to have a lavish Christmas party, others prefer to spend the money on big-ticket gifts for the family.

Whatever is important to you, you need to make sure your spending habits reflect this.

Be brave with cost cutting

If your debt is really getting on top of you, then you may need to be a bit braver with some of your larger monthly outgoings.

Home and car payments are two large expenses and it may seem like you have no other option but to pay them. But you always have a choice. You can save on rent or mortgage payments by moving to a cheaper area or cut your travel expenses by downsizing your car.

Making these kinds of cost savings isn’t easy, but it can make a big difference to your monthly budget.

If you are struggling with serious debt, then you should speak to a debt advisor as soon as possible. For more information about personal debt solution, speak to a member of the Umbrella Insolvency team today. Call: 0800 611 8888.