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And you don't have to live under a bridge.

That headline sounds impossible, right? To save money, you have to keep more of it and, by definition, that means you’re spending less. So, yes, you’re going to spend less, but you’re not going to stop spending on the things you enjoy now.

The key to this kind of painless saving is to think as little as possible. Instead, you want to automate the process of saving and reducing spending as much as possible. Behavioral finance has shown that willpower is a limited resource, which is why going on a “crash budget” where you squeeze every dollar until the eagle screams doesn’t work any better than a crash diet. You get a couple of days of success, but you can’t keep it up.

Here are two ways you can automate the process of spending less and saving more.

Cut junk spending

First, let’s take a tour through your credit card and bank statements and your recurring monthly bills. Starting with your bank and card accounts, look carefully at every recurring monthly charge that you find and weed out the things you don’t use. These can be gym memberships when you no longer work out, subscriptions you never read and services you haven’t touched in years. What they all have in common is that they renew every month, quarter or year without your approval and, often, without you noticing. But let’s face it: You’re not going to miss paying for Cat Fancy magazine when Mr. Whiskers went to that big litter box in the sky two years ago.

Cancel those automated charges and you’ve just given yourself permanent, ongoing savings every month for the rest of your life – without having to think about any of it ever again. That $49 gym membership won’t come back, and you’ll save a total of nearly $600 over the course of a year with just one phone call. Not a bad return on your investment. Then go through your utility, cable and phone statements, looking for features you don’t use. It could be a ringtone subscription, unneeded life insurance on your credit card bill or a cable feature you never use. Cancel those and save.

Spend less, save more

When I looked at this kind of junk spending for my book, “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese,” I found $132.89 in this kind of recurring but useless spending, including $25 a month for an email account I hadn’t opened in two years.

That takes care of the stuff that’s documented on paper, but what about all your discretionary purchases, from buying lunch at work to picking up a six-pack on the way home? All of these types of small, casual purchases happen without much thought, especially if you’re using a debit card so – unconscious spending. The way to get around this is to give yourself a set amount of cash every payday to cover all your casual spending.

This works for two reasons: First, it is physically more uncomfortable to spend cash than to pay for things in any other way; second, having a hard limit on your spending cash will automatically put the brake on small purchases as you try to stretch your cash until the next paycheck arrives. You’ll automatically start prioritizing your purchases. Instead of $3.50 for fancy coffee to go, you’ll wait and drink the free stuff at the office and save the cash. Or you’ll get the coffee but skip buying the apricot Danish, too. Either way, you’re still getting your coffee but also spending less.

There’s one last step, and that also involves automation: Set up a savings plan for your new-found cash. It does no good at all to cut your spending if that money gets frittered away on other expenses. Add up your spending cuts and have that amount of money automatically deposited into a savings account, where you can watch it pile up. Then, you can use that money to invest, fund an emergency account or take a vacation. Either way, your total spending will be unchanged. You’ll just be buying the things that are more important to you.

Brian J. O’Connor is the author of the award-winning budget book, “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese.”

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Meet the Author

Brian O'Connor

Brian O'Connor


Brian O'Connor is a contributing writer for O'Connor is a journalist, writer and consultant. He's a syndicated personal finance columnist and author of "The $1,000 Challenge."


money management

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