Token Optimization: Cut AI Costs by 40-60%

Why Token Optimization Matters

Every interaction with Claude Code costs tokens. Unoptimized workflows can burn through API credits fast — especially when reading large files, maintaining bloated context, or using expensive models for simple tasks. The difference between optimized and unoptimized can be 40-60 percent in cost savings.

Strategy 1: Context Pruning

Do not dump your entire codebase into context. Read only the files you need. Use selective file reading with line ranges. Keep your CLAUDE.md focused and under 100 lines. Remove stale context before it accumulates.

Strategy 2: Model Routing

Use cheaper models for simple tasks. Claude Haiku for formatting, refactoring, and boilerplate. Claude Sonnet for code review and moderate complexity. Claude Opus only for architecture decisions and complex reasoning. This alone can cut costs 30-40 percent.

Strategy 3: Measure and Monitor

Track your token spend per session. Use the /cco commands to monitor context health. Set budgets per project. Review your highest-cost sessions and identify patterns. What you measure, you can improve.