I Cut Claude API Costs by 50% Using a Self-Modifying Agentic System My Claude API bill hit $340 in a single month. The system I was running was doing what it was supposed to do—processing thousands of tasks per day, generating content, classifying inputs, drafting responses—but the cost curve was pointing straight up and I had no clear way to bend it without sacrificing quality. So I built something that fights back: a self-modifying agentic loop that analyzes each incoming task, routes it to the cheapest model capable of handling it, compresses the context window before every call, and caches repeated prompt structures using Anthropic’s native caching API. The result was a 50% reduction in monthly API spend with zero degradation in output quality on the tasks that mattered. ...