How to control your spending in 7 steps

Some will be obligations (bills), while others may be based on sound decisions (nice trainers at a nice price). Some of your spending may have even gone unnoticed. 

One of the first steps towards managing your money is understanding how you spend it. This can help you make informed decisions about your budget, any debts you need to repay, and building up your savings.

Here are 7 steps on how you can manage your spending.

One of the first steps towards managing your money is understanding how you spend it. This can help you make informed decisions about your budget, any debts you need to repay, and building up your savings.

Use tools like our budget planner to help you find where you’re spending your money, and areas where you may be overspending. 

Your spending can broadly fit into 2 categories:

Covering your needs before your wants can be a way to start cutting back on your spending. A guide to work towards is the 50-30-20 rule. It suggests you aim to spend 50% on living expenses (needs) and 30% on non-essentials (wants), such as eating out and shopping. That leaves 20% for savings or paying off debt.

If you want to reduce your spending on needs, you may find that cutting back on some things is easier than others. For example, it's easier to spend less at the supermarket than reduce your rent or mortgage or cancel your insurance policies. 

But it doesn’t mean you can’t plan to reduce some of your larger costs over time. Look at your energy, phone, and broadband bills to make sure you have a competitive deal. If you don’t, it may be worth switching to another provider. 

If you’re overspending, you may need to weigh up whether you can cut back on some of your wants.

Set yourself achievable goals and give yourself some leeway. It can help to set a range for your savings goal, such as £100 to £300. If you aim for a specific amount each month, but don’t have enough, it may discourage you from saving. 

Remember, saving something each month is better than saving nothing.

When you’re setting goals, try to budget for some ‘wants’ too. You’ll then have money set aside for guilt-free spending, so you’ll be less likely to raid your savings.

Explore: Challenges to help you save money

Setting tangible targets and keeping your financial goals front of mind can be a big motivator. Our savings goal calculator can help you see how long it would take to achieve your goal and help you work out a realistic timeframe.

Naming your savings goals may also help you stay focused. For example, ‘Savings account’ is not the most inspiring name. What’s it for? If it’s for a holiday to Spain, try labelling your savings account ‘Spain holiday’.

If your goal is to clear your debts, set yourself milestones where you can celebrate the progress you’ve made. For example, once you’ve cleared 30%, you could order a nice takeaway.

Deciding exactly when, where, and how you’ll make certain decisions can reduce the temptation to veer from the plan. 

For example, if you’ve decided to put money into a savings account or make a debt repayment each month, will you do it:

You may want to set up a standing order, so your savings or debt repayments are automatically deducted from your income.

This can help you work out how much you have ‘free’ to spend each month and help you reach your goal faster. It may also remove any guilt you feel for spending money on things you enjoy.

If you’re an HSBC customer, you can also use tools like Balance forecast on our mobile app. It accounts for your regular bills to let you know how much money you could have left over.

We have more mobile money management tools in our app to help you keep an eye on your spending and stay on top of your finances. Not only could they help you stick to your budget, but they may also help you achieve your financial goals.

A common source of regret can be realising after an event that you could have done something differently. If you’re serious about reaching your goals, think about specific temptations and how to avoid them.

For example, if you’re saving for a holiday but find yourself tempted to buy a new jacket, think about what your holiday will be like.

It also helps to be aware of your own triggers. They could be anything, including:

These triggers will differ from person to person but think about how you can avoid situations that might cause you to spend money you don’t want to spend.

To help you take control of your spending, prioritise paying off any debt you may have and if you can, avoid adding to it. 

For example, if your friends are going out and you can’t afford it, you may be tempted to use your overdraft or credit card. But doing this can eat into your income for the next month.

If you can, try and get by for the month using only the money in your current account. If that’s not possible, look at how much you’re spending on your credit card or using your overdraft and set yourself a goal to reduce that amount each month.

Explore: How to get out of your overdraft

Being aware of your spending is the first step to controlling it, and spend alerts are a great way to keep track. 

Some apps will allow you to set a limit for your spending in different areas and then send you a notification if you’re approaching or have gone over your limit. 

If things don’t go to plan, that’s okay. The more you know about your spending, the more informed decisions you’ll be able to make.

By following these 7 steps, you can take control of your spending, reduce debt, and achieve your financial goals. Start today and take the first step toward financial wellbeing. 

Explore: Steps to financial wellbeing

If these strategies aren’t working and you feel things are getting more difficult, it’s important to get assistance. There is support available to help you get back on track.

If you need help managing your finances, speaking to a trusted family member or friend can help. 

Talking about money can help you tackle any money worries you have, and help you reach your goals, such as getting out of debt or boosting your savings.

If you think your mental health could be affecting the way you manage your money, we have a range of services available to support you.

Expore: Mental health and support

Managing your spending is the first step toward achieving your financial wellbeing. By tracking your habits, setting realistic saving goals, and automating your payments, you can take control of your finances. 

Recognising triggers, prioritising debt repayment, and using tools like spend alerts can help you stay on track. 

Whether it’s building an emergency fund or reducing unnecessary expenses, these 7 steps can provide a clear path to better money management and financial confidence. 

This article was last updated: 07/07/2026, 03:44