Image Credit : systenics.ai

Most people don’t realize that every word you send to or receive from an AI comes at a cost and it measured in tokens. Whether you’re using Copilot, ChatGPT, Claude, or integrating via API, token usage directly affects speed, quality, and even your monthly bill. A bloated prompt or rambling response can lead to truncation, loss of context, or higher latency. If you’re building apps on top of AI or just using it daily for work, understanding how to optimize for token efficiency is essential. It’s not just about saving money, it’s about making the model think faster and stay on track.                                  

So, how do you improve token efficiency? Start by trimming unnecessary instructions, using clear task language, and leveraging formatting tricks like bullet points instead of long paragraphs. Ask for outputs in structured formats (e.g. any file format, table, bullets), and when possible, reuse context instead of repeating it. If you’re chaining prompts (like CoT setups), smart summarization between steps helps avoid token bloat. And always remember: fewer tokens doesn’t mean dumber prompts, it means smarter ones 🙂