Most people think of cutting back on Starbucks or giving up a hobby when they need to reduce their spending, but this is not the best approach.

The most effective way to reduce your spending is to try to reduce your fixed expenses.

All your spending can be divided into two categories: fixed spending and discretionary spending.

Fixed spending is things that you pay every month, or every year. They are automatic. Things like rent, buying food, health insurance, mobile bills, and subscriptions.

Discretionary spending is everything else, from buying a coffee in the morning to booking flights to Europe.

If you want to reduce your spending and become more financially resilient focusing on your fixed expenses is incredibly effective.

Every reduction in your fixed expenses will reduce your future spending. It will also mean you can survive on less if you need to.

It is easy to reduce discretionary spending in an emergency, but if your fixed expenses are too high you will have less leeway.

For most people the big fixed expenses are housing, transportation, food, utilities, and insurance. Subscriptions can also be a large expense, and are easy to overlook.

Getting a cheaper home, batch cooking at home, moving to a cheaper mobile phone company, and cancelling subscriptions you aren't getting value from are a great way to reduce your monthly expenses and free up some money to save and invest.

Reducing fixed expenses is also less stressful than depriving yourself of things you enjoy (like that cappuccino in the morning or going to lunch with friends).

It's all about being mindful of what you are spending money on, and whether it is improving your life enough to justify the expense. To paraphrase Marie Kondo, 'does your spending spark joy?'

If not, you can probably use that money more effectively to buy time, or freedom.

If you need help with thinking about your spending, come to the RetireJapan site and forum. You'll find a friendly community that enjoys talking about this stuff and helping new people.