Income made smart: 7 strategies to stretch your money

According to the U.S. Bureau of Labor Statistics, average annual consumer expenditures rose 5.9% between 2023 and 2022. Food and housing were just two of the spending categories that led to that increase.

If you’ve found that you started spending more in the last few years and if you’re seeking ways to make your paychecks last longer, you may consider changing how you’re spending or adopting one or several money-saving strategies so you can do your best to stretch what you earn.

It’s easier said than done, though. Figuring out how to get started may be one of the most challenging aspects of strategizing how to make your money go further.

Utilizing a few helpful money habits — from creating a budget to taking advantage of discounts— may help pave the way.

Why does maximizing your money matter?

There are many reasons why making your money last longer may be beneficial. Just a few reasons why more mindfully spending and saving may be helpful:

• Maximizing your paycheck may allow you to set aside more for emergencies, future goals, and retirement.
• Being mindful of spending may help prevent you from living paycheck to paycheck and reduce anxiety about running out of money.
• Stretching your income may help to ensure you have available money for unforeseen expenses like medical bills, car repairs, and other emergencies.
• Building healthy spending habits may help set the foundation for a stable financial future.
• Stretching your paycheck may give you more freedom to make choices, such as reducing your work hours, pursuing education, taking career risks, and more.

Seven strategies that may help make the money you earn go further

Now that we’ve established why being mindful about spending and saving may ultimately be helpful as you start to prepare for a solid financial future, here are a few strategies you can try that can potentially help you make the most of your money. You may try one at a time or combine a few to see if any work for you.

1. Consider creating a budget

One strategy to stretch your paycheck that you may want to consider is creating a budget. According to the Federal Trade Commission, a budget is a tool by which you decide how to spend your money each month. It will allow you to create a plan for how you spend the money that you bring in, and if you want to, allot some of your income to savings.

You can start a budget by listing how much you’re earning each month. From there, you may want to list your set monthly bills like rent, electricity, and car payments. Once you subtract your set monthly bills from your monthly take-home pay, you can decide how much you want to allot each month to your discretionary spending like groceries, eating out, and shopping with the money you have left over.

Once you make an initial budget, you may try to lower some of your expenses or cut out spending that’s eating into your budget (such as ordering takeout) to have more money left over for other spending or to save more each month.

2. Comparison shop for groceries

U.S. consumers spent an average of 11.2% of their disposable personal income on food in 2023.  

If you spend a large portion of your paycheck on groceries, you may find it helpful to start comparison shopping for food. For instance, you may find that vegetables and fruit are cheaper at your local farmer’s market compared to your local grocery store, while pantry items are most affordable at wholesale stores.

With rising food prices — the U.S. Department of Agriculture predicts that in 2025, “food-at-home prices” (this includes food from grocery stores), will increase 1.6 % — making these small shopping changes to support keeping to your budget may be helpful when it comes to reaching your goals.

3. Take advantage of coupons and discounts

Another strategy to make your money count is to take advantage of coupons and discounts whenever and wherever possible.

One key to using coupons and discounts to your advantage may be to find discounts for things you would be buying anyway – like groceries, movie tickets, and so on – so you can find savings for your budget.

Everything from grocery stores to entertainment venues offer discounts online. Other places you may be able to grab coupons include store-specific mobile apps, coupon apps, and websites that list store promo codes.

If you work for a company, it may be worth checking if your employer offers discounts. Some do on everything from cars to museum tickets.

4. Consider cheaper methods of transportation

One strategy that may be worth considering when cutting down on expenses is to see if you can reduce your transportation-related spending. A recent consumer expenditures report by the U.S. Bureau of Labor Statistics found that Americans are spending more on transportation than ever, with average transportation expenditures increasing by 7.1% in 2023 from the year prior.

If you feel like you’re spending more on transportation than you’d like to, you may want to evaluate what transportation methods are genuinely the most economical for you. You may think that driving your car to work, for instance, is the best option, but when you factor in the price of gas and parking, you may find that taking a bus or train may make much more financial sense.

5. Cancel subscriptions you don’t use

A fifth strategy for making your money count is to cancel any subscriptions you aren’t using. Let’s say you’re paying $300 a year for digital magazine subscriptions that you barely read. You may want to consider canceling those subscriptions to prioritize other parts of your budget.

Check your monthly spending and compile all of your subscriptions – streaming services, digital subscriptions, recurring charges for apps, and anything else – to truly assess what you need and what you may be able to live without.

6. Make your meals at home rather than eating out

According to the U.S. Bureau of Labor Statistics, on average, Americans spent 8.1% more on eating out in 2023 than in 2022.

It gets thrown out often that meal prepping and cooking more at home can help you save money, and the numbers do paint a picture of people spending more and more of their take-home pay on eating out.

Consider experimenting with not eating out for a whole week or only eating out for special occasions, to see if you can make a dent in your budget.

7. Take advantage of free (or almost free) activities as much as possible

If you spend a lot of money on entertainment, consider taking advantage of free activities to keep to your budget.

For instance, many towns and cities offer community fitness activities at little or no charge. For example, if you spend $60 taking two fitness classes per week, ultimately that means you spend roughly $3,000 a year on those fitness classes. However, if you opt for two complimentary fitness classes a week through a community center, you may find that you can free up that money for other spending or to save.

Systematically going through your spending and asking yourself, “Could I have gotten this for free or almost free?” may be helpful to identify ways to find more low-cost options for your spending.

Final thoughts

No matter how much you bring home each month, there are always better money habits you can adopt to help you save more after paying for your core expenses. Whether this means cutting down on your entertainment spending or canceling a subscription, there’s more than one way to help your money go further.