How to save money and control your spending?

Saving money and keeping spending under control are key skills that everyone should master in order to reach financial stability and meet their goals in life. They matter all the more in our civilisation, which rests on an economic model whose side effect is the constant erosion of the value of money. When unexpected expenses can crop up at the least convenient moment, knowing how to save money is essential.

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Table of contents of the Financial Primer

• Financial Goals
• What Is Personal Finance?
• Why Does Money Lose Value?
• Investing Basics
• How to Save Money and Control Your Spending
• How Loans Work
• What Could Go Wrong? The Basics of Risk Management
• Planning Basics: How to Create Effective Plans
• How to Invest Without Taking on Risk? Hedging Strategies
• Insurance Explained from A to Z: How It Works and Why You Need It
• How to prepare a household budget? A guide from scratch
• The PSOT Express Plan: How to Plan Effectively and Reach Your Goals
• Creditworthiness and credit history: how to build them
• Personal finance planning: how to get started?

Saving regularly lets you build financial security, opens the door to investing and to making your dreams come true, and helps you avoid debt. Not everyone, however, knows how to save money on a low income, especially when the falling value of money (the rising cost of living) outpaces wage growth.

That is why I have gathered practical tips and tried-and-tested ways to save money and plan your spending. You will learn how to plan your expenses, how to spend less, and that saving without sacrifice is possible. Reading this article takes just a few minutes, but the changes you make can prove to be a turning point. So, shall we begin?

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Saving – a definition

Before you learn how to save money, let me give you a definition of saving. The PWN Dictionary of the Polish Language gives five definitions of saving, three of which interest us here:

1. “to spend little money so that you can set part of it aside for some goal”

2. “not to use something up at once, keeping part of it for later”

3. “to try to use as little of something as possible”

The science of finance understands saving in a similar way. The definition of saving is the process of setting aside part of your income for future needs instead of spending all of it on current consumption.

In plainer terms: saving is not spending everything. You spend less than you earn, and what is left can be stored somewhere or invested. Saving is therefore the first step towards investing.

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Planning your spending with a cool head

Planning your spending with a cool head starts with setting clear financial goals. From the chapter on framing financial goals you already know that they have to be SMARRT and grounded in your values rather than in social norms. They can include saving up to buy a new car, building an emergency fund, or getting ready for retirement. These goals have to be reflected in your monthly household budget. Once you have defined your goals, write them down and come back to them regularly. That will help you stay motivated. Stick to your goals even when temptations to spend the money on something else show up. Remember that pursuing financial goals takes discipline, but it brings long-term rewards.

Remember that a budget is a plan, a tool that will be with you all month long. While creating it, you had to think coolly about what matters to you and what you want to put your money towards. You need to keep this in mind in moments when temptation comes over you. Trust yourself! When you built the budget, you thought your month through carefully. Don’t let a fleeting impulse ruin your plans. A brief moment of pleasure can leave you regretting that purchase for many months.

Review and update your budget regularly to make sure you are sticking to the planned amounts. Sticking to a budget takes self-discipline, but it is essential if you want to avoid needless spending and allow yourself to save and invest.

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The battle inside us between Homo Oeconomicus and Homo Emoticus

The question of how to save money is a complicated one. A battle is being waged inside us between two models of the human being. The rational, future-minded homo oeconomicus tries to fend off the attacks of homo emoticus, who thinks only about making you feel good here and now. If homo oeconomicus decided what you eat, you would follow a perfectly balanced, sweets-free diet. If homo emoticus decided your menu, it would consist of nothing but chocolate, crisps and cola. You’ll agree it’s worth finding a compromise, won’t you?

In the battle between homo oeconomicus and homo emoticus, the former ought to win. We should be guided by rationality and long-term thinking, but not in an authoritarian way. Emperor Tiberius said that a good shepherd should shear his sheep, not flay them (Suetonius, chapter 32), so, translating that into your life, you can’t forget about pleasures entirely.

Let homo oeconomicus rule, but let him remember that, in the end, homo sapiens also has a need for spontaneous pleasure. Let your voice of reason — the one that analyses every expense, plans the budget and strives for stability — foresee in advance that there are moments when you want to give in to temptation. Use creative ways to save and set aside, in advance, a budget for all the pleasures you can’t do without.

Will you die without a Starbucks coffee? Set aside 20 PLN a week when you plan your spending. Once a week isn’t enough, and three times a day would be ideal? Well then — either a daily Starbucks coffee, or a Lambo in 7 years’ time. Make the choice deliberately, while planning your budget and setting your financial goals, not while standing at the checkout.

You have to listen to the voice of reason, but you can’t completely ignore the need to take joy in life here and now. Knowing creative ways to save and being able to find the balance between rationality and emotion is an art that allows for conscious and satisfying money management. Later on I’ll also tell you about saving without sacrifice.

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How to spend less? Beware of impulse purchases

Managing your finances, controlling your spending — it all sounds so theoretical. It’s easy to write and to read, but harder to resist the temptation of an ice cream when a deal at the corner shop is calling. When it comes to saving, the definition is one thing and life with its everyday temptations is another. Bear in mind, though, that impulse purchases really can quickly wreck even the most carefully planned budget. You have to learn to defend yourself and to master the ways of saving money.

Drink some water, or create your own rituals

Time to present some creative ways to save. One simple yet effective way to avoid ill-considered purchases is to introduce rituals that give you time to think things over — or even to sober up. One such ritual can be… having a drink of water.

We often misread our body’s signals. We think it’s hunger or a craving for something sweet, when in fact we’re simply thirsty. Confusing thirst with hunger leads to needless eating and to spending money on snacks. When we feel thirsty, the signals our brain sends can be similar to those we feel when we’re hungry.

The human body doesn’t always clearly distinguish between thirst and hunger, because both needs are signalled by the hypothalamus, the part of the brain responsible for regulating such functions. Not having enough water in the body can lead to fatigue and increase our appetite for snacks, especially those high in sugar, which provide a quick energy boost (Zimmerman et al.).

In reality, though, what we often truly need is a few sips of water, which will help us rehydrate and feel better without unnecessary calories and expense. So the next time you feel tempted to reach for an ice cream, an energy drink, a coffee or anything else, try having some water first. You’ll quench your thirst and have a moment to cool down and rethink your decision. It is, then, a way to save money.

Even mild dehydration can affect our mood and our ability to concentrate, which in turn can increase the likelihood of making impulsive decisions. Regularly hydrating the body is therefore not only good for your health but also helps with controlling your spending by reducing impulse purchases. Drink water — it will help you not only with how to save money but also with keeping your weight in check, and it will solve plenty of health problems.

The three-day rule for thinking a purchase over

Or perhaps, through impulse purchases, you have less and less room in your wardrobe, in the attic or in the basement? The answer to the question of how to save money at home is the three-day rule. This technique helps curb impulse purchases in a very simple way: before making a purchase, you should wait three days. During that time you’ll get a sense of whether the item is really necessary and whether buying it will bring a long-term benefit. It often turns out that after three days the urge to buy passes, and we can save the money we would have spent on impulse.

Is your inner voice convincing you that it’s an amazing bargain and the deal ends tomorrow? Don’t let shops tell you how to live. Make the decisions about your own life yourself.

If you need a television, then great — think carefully about which one, compare models and buy exactly what you need. You can look up a specific TV model on Ceneo or on Google. You can also start browsing the leaflets of various chains — but only with an eye on the TV you want to buy. Remember that you’re looking for a way to save money at home, not for a way to buy more.

Are you following the shop’s prompts? The house always wins. A great deal? Wonderful, but do you really need it? If not, then in truth, by buying a laptop on sale, marked down from 3,299 PLN to 2,499, you aren’t saving 700 PLN — you’re losing 2,499. Because normally you wouldn’t have decided to make that purchase.

So whatever bargain comes your way, give yourself three days to think it over. I guarantee you’ll give up on more than half of your purchases. It’s homo emoticus, working hand in hand with the sellers, who tries to convince you that it’s a deal you simply have to take. Don’t listen to him — homo emoticus doesn’t know how to save money, especially on a low income.

A moment of pleasure and a hangover, or smart decisions that bring satisfaction?

Impulse purchases can bring a fleeting joy, but they often lead to a financial hangover — a feeling of guilt and dissatisfaction after an ill-considered expense. Instead, it’s worth making smart buying decisions that bring long-term satisfaction.

Home-grown ways to save money, together with a focus on your financial goals and priorities, let you draw greater joy from your achievements than from momentary pleasures. As a result, every financial decision becomes a step towards making your dreams come true and building a stable future.

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Saving without sacrifice

A big problem with saving is the need to make sacrifices. Many people associate saving and investing with giving up pleasures, cutting back on entertainment spending or limiting their shopping. Such an approach can be demotivating and hard to keep up in the long run, because people naturally strive to satisfy their needs and desires. The need for sacrifices can lead to a sense of frustration and discouragement.

But what if saving didn’t require sacrifices? Can you save without giving up small pleasures and without feeling discomfort? There are strategies for saving without sacrifice that let you build up funds without drastically changing your lifestyle. Find out how to make saving a habit rather than an extra chore.

Automatic saving

Automatic saving is one of the easiest ways to save money. It involves setting up regular transfers from your main account to a savings account with every transaction. This happens through rounding up the odd amounts of transactions or transferring a set percentage of the expense.

In the first case, every card transaction is automatically rounded up to a whole amount, and the difference is set aside in a savings account. If you pay 19.50 PLN for your shopping, the system rounds the amount up to 20 PLN, and the 0.50 PLN goes to your savings account. In the second case, with every payment a set percentage of the amount spent is automatically transferred to the savings account. If you decide it will be 5%, then with every payment of 100 PLN, 5 PLN will be saved automatically.

This kind of saving is imperceptible, runs in the background and requires no conscious sacrifices. Over the longer term it can lead to accumulating significant savings. It’s a very good way to save money on a low income.

Saving up front

It involves setting up automatic transfers from your main account to a savings account at the moment you receive your pay. Thanks to this, the money sets itself aside before you have a chance to spend it. It’s a bit like a tax you pay to yourself.

Day to day, when you get your pay, you don’t complain that the tax office or ZUS (Poland’s social-security institution) took part of it. You probably don’t even think about it. Automatic saving works in a similar way. You can ask your employer to transfer 10% of your salary to a different account, or set up a standing order yourself. Such home-grown ways to save money remove the temptation to put those funds towards impulse purchases and help you systematically build a savings fund.

Paying yourself first is an approach that helps you build the habit of saving regularly and ensures that savings are treated not as an option but as a permanent part of the budget. As a result, saving becomes an integral part of managing your personal finances, rather than something you do only when there’s something left over.

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Controlling your spending

Planning your spending is only the beginning. Monitoring it is also a key element of effective money management. Regularly tracking what you spend your money on lets you understand your shopping habits and identify areas where you can save. You can use various tools for monitoring spending, such as mobile apps, spreadsheets or a traditional notebook. The important thing is to record every expense, no matter how big or small.

This is a key principle of controlling your spending. It doesn’t matter how you record them, what matters is that all your expenses are included. You can do it in an aggregated form, such as “sweets”, or even “groceries”, or more generally still: “living costs”. It all depends on how you framed it in your budget while planning your spending. A budget should be flexible and suited to your way of spending money, your way of life, to you. Only regular recording of expenses will let you update the budget and respond to changes in income and spending.

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How to spend less? Make the most of sales!

Shopping during sales is one of the easiest ways to save money. Shops regularly hold sales and offer discounts on various products. Keeping an eye on these opportunities and planning bigger purchases for promotional periods such as Black Friday, Cyber Monday or seasonal sales is one of the tried-and-tested home-grown ways to save money, just like buying products from outlet stores.

Remember, though, that it’s you who is supposed to decide what you buy, not the shops. So don’t make decisions in the heat of the moment, under the influence of a sale. Decide what you want to buy in the coming months and keep track of the sales that come up, waiting for the moment when the thing you plan to buy is put on offer at a bargain price. Consider whether the item is really needed and whether buying it fits within your budget.

Apps and cards

And how do you save money on food? In everyday shopping, the apps and cards issued by individual shops come in handy. You can buy cheese at 30 PLN/kg, or you can hunt for a markdown of around 15 PLN/kg. Discount stores sometimes pull off genuinely irrational deals. In 2024 I happened to buy eggs at 30 grosze apiece and gouda cheese at 8.99 PLN/kg, and at the very peak of the price war, Biedronka started giving away items from the Shakeomat for free. I remember buying 2.5 kg of tomatoes and 500 g of chocolate flakes and paying 10 PLN for it.

But even with discount stores you have to be careful. Remember that the house always wins. These are huge businesses, employing excellent marketing and sales-strategy specialists, so they certainly don’t give anything away for free. The promotional range is usually limited. The chain prepares a few dozen blocks of butter, which sell out within a few hours, so that most people buy at normal prices.

Your shopping has to be thought through. Don’t get swept up in the frenzy of low prices, buying things without a plan. When you stock up, don’t buy more than you and your family are able to use. In Poland we have nearly 10 big shop chains, each with interesting deals, so quite often similar opportunities come around again. From experience I know that by shopping mindfully you can buy most products on sale at 20 to 50% off. I can’t remember the last time I paid more than 60 grosze for eggs, or more than 6 PLN/kg for tomatoes (as of July 2024).

If you don’t have the time, energy or inclination to keep up with the leaflets of ten chains, you can use deal comparison sites such as Blix. You type in what you need, and you immediately get tips on where to find it at a favourable price. Searching for deals across different chains is a good way to save money on food.

Other loyalty programmes

Loyalty programmes are an excellent tool for saving money. Joining a loyalty programme is usually free and lets you collect points for your purchases, which you can later exchange for discounts or free products. If you happen to visit the same chain often, it’s worth joining its loyalty programme. Perhaps, while shopping, you’ll manage to get an extra discount or some kind of gift.

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Practical tips on how to save money

Planning your shopping

Planning your shopping is a key element of effective saving. How do you plan your spending? Before any bigger purchases, it’s worth preparing a list of the things that are really needed. This way you’ll avoid impulse spending and focus on your actual needs. A shopping list also allows for better budget management, because you can foresee how much money you’ll spend and which products are a priority. With your shopping planning, the chapter on the basics of planning may also help you — it’s always worth getting to know them.

It’s worth doing your grocery shopping as often as possible, based on a weekly menu or even daily. This will help reduce food waste and make better use of the products you’ve bought. The more often you shop, the less you’ll spend, because you’ll buy only what you need. Remember to take your shopping list with you to the shop and stick to it, while avoiding the temptation to buy things that aren’t on the list.

Cooking for yourself instead of eating out

Eating out can be convenient, but it’s usually also far more expensive than cooking at home. Preparing your own meals lets you save a fair amount of money while also giving you control over what you eat. Cooking at home is not only cheaper but also healthier, because you can choose high-quality ingredients and avoid the unhealthy additives often found in takeaway food.

It’s worth planning meals in advance and cooking larger portions that you can freeze or eat the next day. Do you remember what saving is? The definition speaks of using as little of something as possible, but not wasting is important too. When you cook a lot, you can divide it into portions that you’ll use optimally, instead of stuffing yourself by force. That way you’ll also prepare food for work or school, cutting down on buying ready-made meals on the spot, which will also contribute to considerable savings.

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Summary

Saving money and controlling your spending are processes that require discipline and consistency. The key things are how to plan your spending, avoiding impulse purchases, and using creative ways to save. Regularly monitoring your spending and sticking to a budget allows for better money management and helps you avoid needless costs. With these methods you can achieve financial stability, start investing and pursue your goals.

Staying motivated to save can be a challenge, but it’s worth keeping the long-term benefits in mind. Regularly reviewing your financial goals and tracking your progress will help you stay engaged. Celebrate small wins, such as reaching the next stage of saving, to keep your enthusiasm up. Remember that every smart financial decision brings you closer to making your dreams come true and building a stable future.

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In brief

Saving money and controlling your spending are key skills that everyone should master in order to reach financial stability and meet their goals in life. Saving regularly lets you build financial security, opens the door to investing and to making your dreams come true, and helps you avoid debt. Planning your spending, avoiding impulse purchases and making the most of sales will help you save money. It’s worth using your creativity to come up with saving methods that won’t force you into drastic sacrifices.

Sacrifices can lead to frustration and discouragement, but saving doesn’t have to mean giving up pleasures. There are strategies such as automatic saving, where regular transfers to a savings account are set up with every payment, or the odd amounts of transactions are rounded up, which lets you build up savings in a way that’s almost imperceptible in everyday life.

Controlling your spending through monitoring and regularly reviewing your budget is extremely important. Conscious shopping planning and the use of mobile apps and loyalty cards can help you save. It’s important to make smart financial decisions that bring long-term satisfaction rather than momentary pleasures. Ultimately, a balance between rationality and emotion in managing your finances allows you to achieve financial stability and make your dreams come true.

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Key concepts

Saving regularly, saving, homo oeconomicus, homo emoticus, impulse spending, the water-drinking rule, the three-day rule, the financial hangover, rounding up the odd amounts of transactions, automatic transfers, pay yourself first, the house always wins, deal comparison sites, loyalty programmes, store apps, the shopping list,

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Bibliography

1. Suetonius, Gaius. Żywoty cezarów. Translated, with an introduction and commentary by Janina Niemirska-Pliszczyńska. Państwowy Instytut Wydawniczy, 1987.
2. PWN Dictionary of the Polish Language. Available online: https://sjp.pwn.pl/
3. Zimmerman, C. A., Leib, D. E., & Knight, Z. A. (2017). Neural circuits underlying thirst and fluid homeostasis. Nature Reviews Neuroscience, 18(8), 459-469