How to Change Your Spending Habits for Good

8 min read
5 proven ways to spring clean your spending

Your spending habits play a big role in your overall financial well-being. How you spend (or don’t) can influence how much debt you carry, what your emergency fund looks like, and even play a part in how you feel emotionally about your financial picture.  

The way you spend has also been a part of who you are for longer than you may realize. According to the Consumer Financial Protection Bureau, most of us start building our basic values and attitudes around money between three and five-years-old. And we keep developing those habits until we’re young adults. 

But while how we spend and save is often based on unconscious beliefs we picked up as kids, that doesn’t mean you can’t develop better spending habits now. These manageable steps can help you change your attitude around spending so you can reach your financial goals.  

5 Steps to Change Your Spending Habits  

Change won’t happen overnight, but with time and effort, you can overhaul the way you spend and save.  

 1. Follow the money  

Knowing where your money is going is a critical step in understanding your current spending habits.  

A spending audit is simply a review of your recent purchases to help you spot trends. You can do this manually by reviewing your bank and credit card statements or use budgeting software that syncs with your online accounts. You don’t have to create or follow a budget to get the benefits at this stage. For now, focus on categorizing your past purchases so you can see where your money is going.  

To get a real picture of your day-to-day spending, look at several months of bank and credit card statements. Group purchases into categories like “clothing expenses,” “entertainment,” or “dining out.” As you start to flesh out your categories, look for trends, not just dollar amounts. For example, do you spend more on take-out during busy, stressful weeknights? Knowing not just where the money goes, by why you spent it in the first place, can help you make meaningful change.  

2. Review your debt  

Next, add up all your debts, including credit cards, loans, and any payment plans, to get an accurate picture of what you owe overall.   

Seeing your debts laid out will help you decide if you can tackle your debt by modifying your spending habits. For example, if you owe a manageable amount of debt, you may be able to hit balance $0 in creative ways like having a garage sale or cutting out a pricey cable subscription for a few months.  

But if your debt feels overwhelming, or you’re paying more in interest than you're putting toward your principal balance, you may want to consider a debt consolidation loan. These personal loans allow you to roll several debts into a new loan, paying off your creditors in the process. Debt consolidation loans may also offer a lower interest rate than you’re paying now and a more manageable, flat monthly payment. You can check your rate for a debt consolidation loan from LendingClub Bank today without impacting your credit score.  

3. Align your spending with your financial goals

Once you have an overview of where you’ve been spending money and how much you owe, consider how it compares with your goals and values. You won’t be able to afford everything, so what do you want to prioritize? 

Spend some time creating financial goals for yourself. Maybe you want to pay off your credit cards in a year, or help your kids go to college in ten years. There is no right way to develop your goals. Just the action of putting pen to paper can help you start to reprioritize how you spend and save.  

 4. Make changes, one category at a time  

Now that you have everything laid out, it is time to really dive into why you’re buying what you’re buying and where you can make changes.  

This doesn’t have to be overwhelming. Take it slow by evaluating and changing one category at a time. For example, if you want to cut back on dining out (or getting delivery), start by looking for trends. If you find you’re always ordering takeout toward the end of the workweek as the stress builds and time feels short, look into meal delivery kits or make ahead meal ideas that will help you save time and cut out the takeout.  

Keep in mind, you don’t have to stop spending entirely to change your habits. The key is to find patterns you want to change and focus on those. If you cut out everything that makes you genuinely happy, you’ll have a hard time sticking to your plan.  

 5. Create a manageable budget  

Creating a budget can help you stick to your goals and develop lifelong habits, but most people give it up because budgeting feels boring at best and complicated at worst.  

Thankfully, it doesn’t have to be either. Once you have your spending goals in mind, consider creating a simple budget with a few broad categories to help you keep track of your progress. For example, you could set a limit for variable purchases like clothing, entertainment, and food. Just budgeting for your bigger spending categories may be all you need to keep on track.  

Want a bigger overall financial picture without all the leg work? Consider using an app. Many popular budgeting apps now connect with your bank and credit cards so you can keep track of your budget and spending practically automatically.  

Spending Habits That Can Help You Save Money 

In addition to your spending, consider other financial habits that can help support your financial goals.  

Monitor your credit.  

Regularly checking your credit reports and scores can be important for your overall financial wellness.  

Unusual activity could mean that someone has compromised one of your accounts or is fraudulently using your identity to take out credit in your name. Staying on top of your credit allows you to respond quickly and can help limit the damage. 

On the other hand, good credit can open up new opportunities, like access to credit cards with promotional rates and low-interest personal loans.  

Look for opportunities to refinance debt. 

Refinancing your debt at a lower interest rate can reduce your monthly payments and save you money on interest. Keep an eye on your credit score and prevailing interest rates so you can jump on potential refinance opportunities. If your credit score has improved over time, you may qualify for a low rate debt consolidation loan. This could not only save you money,1 but it could improve your credit scores by lowering your utilization rate. 2

The same goes for mortgages and auto loans. If loan rates have come down since you first took out the loan, consider refinancing to save funds. Keeping track of financial trends will help you see if and when refinancing makes sense.  

Review your accounts’ fees and features. 

Make a habit of reviewing your financial accounts’ fees—and finding lower-cost alternatives—to help lock in savings for months or years to come. For example, you can: 

  • Get new auto and home insurance quotes every six to 12 months.

  • Look for checking and savings accounts that have fewer fees and offer more interest. 

  • Compare credit card annual fees or search for no-fee alternatives.

  • Review your subscription services to see what you can cancel.

  • Try to negotiate better rates for cable or internet services.

Small changes can lead to long-term savings and help you reach your financial goals sooner.  

Build an emergency fund. 

Your emergency fund can help keep an unexpected expense from throwing you completely off course. Try to save three to six months’ worth of living expenses in a high-yield savings account and resist dipping into your savings for everyday purchases. You can even set up a monthly auto-transfer from your checking to savings to grow your emergency fund without having to think too much about it.  

Easy Ways to Spend Less  

Developing better spending habits isn’t about never buying anything, but almost everyone can benefit from being more intentional with what we do buy. Try these small moves to shift your buying mindset.  

Use cash. 

If you tend to spend more than you planned when you’re out and about, consider bringing cash instead of a debit or credit card. From an iced coffee here to a magazine at the grocery checkout there, it’s easy to rack up expenses when you’re paying with plastic. Switching to cash can help you stick to a max spending limit. 

Give yourself a day before making an impulse purchase. 

Prone to impulse purchases? Try to wait at least a day before checking out. The downtime can help you determine if you really want to spend the money—or if you just got caught up in the moment. Some online merchants even email discount codes for abandoned carts, so waiting a day could have even more financial perks.  

Consider opportunity costs. 

Before spending money, consider what you’re giving up when you make the purchase. For example, if you’re thinking about buying a new phone, you’ll probably compare models to find the best option and best price. But don’t stop there. Take time to consider how you could alternatively use that money to travel, eat out, pay down debt, or reach one of your financial goals. Even if you do end up buying the phone, getting into the habit of weighing opportunity costs can help prevent frivolous purchases.  

Resist the urge to compare. 

In the age of social media, it can seem like there’s always something new to buy and everyone is spending money on it. But new cars and vacation snapshots don’t tell the whole story. After all, people rarely post or talk about what they don’t buy—or how they had to save to afford these purchases. 

If you find yourself stuck in a loop comparing your finances to the perceived finances of others, take a moment to take inventory of what you have. A little mindfulness and gratitude can go a long way—even when it comes to spending habits.  

The Bottom Line 

Developing new spending habits can take time, but you can develop a new lifelong attitude by taking small steps every day. Once you start to look at your spending differently, you’ll be in a better place to reach your bigger financial goals.  

Spending Habits FAQs 

What are the best ways to improve your spending patterns?  

Start by understanding why you spend money the way you do, then identify the habits you want to create and the ones you want to break. Having goals in mind can help you stick with small lifestyle changes.  

Does monthly budgeting help your spending habits? 

A monthly budget can help you align your spending habits with your goals. Even if you don’t set spending limits for yourself, you can use budgeting software to track your purchases and get valuable insight into your behaviors.  

Which type of credit cards helps with your spending habits? 

The type of credit card is less important than how you use it. Tracking your purchases, knowing how much you’re spending, and not spending more than you can afford to repay can build a solid foundation for good spending habits.  

Can personal loans help you pay off debt quicker? 

You may be able to save money and pay down debt sooner with a personal loan. By rolling all your debt together and then using a personal loan to pay that off, some people find the payments easier to manage. And if the APR is lower, you might even save money. Check your rate to see if it’s an option for you. 



  1. Savings are not guaranteed and depend upon various factors, including but not limited to interest rates, fees, and loan term length.

  2. Reducing debt and maintaining low credit balances may contribute to an improvement in your credit score, but results are not guaranteed. Individual results vary based on multiple factors, including but not limited to payment history and credit utilization.

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