Table of Contents
It can be challenging to start saving money if your monthly income is less than your monthly expenses.
If you're wondering how to save money, the key is having a plan and following through. These strategies can help you get on the path toward saving more.
1. Create a Budget to See Where You Stand
It's hard to know where you stand financially if you don't see what you're making and spending each month. Creating a budget offers a complete view of your finances, helping you cut costs and increase savings. Consider the envelope budget: a cash-based system that allocates money to spending categories using physical envelopes.
2. Start an Emergency Fund
If you're on a tight budget and slowly building your savings, the last thing you want is to have to dip into what you've set aside because of an unexpected expense.
3. Pay Down Credit Card Debt
Paying the minimum on your credit card might be easier to maintain in the short term, especially when you're short on cash. But tackling credit card debt can help free up money, and you'll likely pay less interest over time.
4. Use Coupons
Clipping coupons may seem outdated and unrealistic, but now convenient digital options exist. Take advantage of digital coupons from your grocery store that apply your savings when you check out or a browser plug-in that automatically discounts your online shopping order.
5. Plan Meals Ahead
The average American household spends an average of $6,053 on food per year, which includes $3,933 on dining out.1 You might be less tempted to visit the drive-through when you have ingredients and recipes. You could use your free time on the weekends to devise dinner ideas for the week and then make a complete grocery budget.
6. Clean Out Your Closet
Decluttering will not only help you feel more organized but can also boost your income. By having a yard sale or selling clothes or other non-essential items online, you may find that your trash is someone else's treasure.
7. Cancel Recurring Subscriptions
Subscription services, meal delivery services, beauty boxes, entertainment streaming services, or wine clubs can throw off your monthly budget. A monthly cost of $10 or $20 can increase over time.
8. Visit the Library
Libraries aren't just for books. Many local libraries offer free special events and classes, discounted museum admission, and personal development workshops. If you have kids, the library can be a great source of free entertainment.
9. Make Saving Automatic
Automatic savings plans help you save on a tight budget. If offered, set up recurring deposits from a checking account or via direct deposit. Also, consider starting a retirement plan to build funds for retirement. This account is separate from an emergency fund and is crucial for your future.
10. Automate Your Bills
The next step is to look at automating your monthly bills. Most companies let you automate payments for cell phone plans, auto loans, credit cards, and student loans. This will help simplify your finances so you stay on track, ensure your bills are paid on time, and avoid late fees.
11. Negotiate Your Loans & Credit Cards
If a chunk of your paycheck always goes toward paying down debt from credit cards or other loans, you can approach those companies to negotiate better interest rates. Collect details like your lender's name, owed amount, interest rate, and minimum payment. Call to negotiate better terms.
12. Negotiate With Utility Companies
Cell phone, internet, and cable bills can be reduced. Call providers to negotiate cheaper plans or seek offers and rebates. If unsuccessful, consider switching to competitors to save money and boost your savings.
13. Add to Your Income
You can cut only so many costs when you have a set income. However, another option can help you save — bringing in more money. Consider extra hours or negotiating a pay raise. You can even explore new employment options that make more money.
14. Pick Up a Side Job
Start a side hustle to earn extra money beyond your full-time job. Use this income to save or reduce debt. Options include ride-share driving, sitting, or freelance consulting. Remember to report your earnings to the IRS and maintain good financial records.
15. Look for Help
Social support programs, offered through government sites, help those living paycheck to paycheck. Consider refinancing or income-based repayment for college loans, but note that interest might accrue. Debt counseling services can offer further assistance.
16. Check Your Insurance Policies
Review your insurance policies; you may be overpaying. Consider bundling for discounts or raising prices to lower costs, such as your auto insurance policy. Better credit scores can secure lower rates, so check them regularly.
17. Reduce Your Household Bills
Household costs can rise quickly, but you can control them. Audit bills, cancel unused subscriptions, negotiate with providers, and select cost-effective phone or internet plans. Avoid unnecessary purchases and choose store brands.
18. Identify Your Goals
Clear financial goals simplify saving. Aim for a vacation, home, or debt repayment, focusing on long- and short-term goals. Write them down into steps. Use budget apps to track progress and prioritize spending, cutting unnecessary costs.
19. Plan No-Spend Days
Try scheduling no-spend days to save money by avoiding unnecessary purchases. Cook at home, enjoy activities, and use items you already have. Skipping small expenses, like dining out or coffee runs, can significantly impact your finances. Gradually increase no-spend days to build better habits, and keep a shopping list for your next shopping trip.
20. Track Your Spending
Expense tracking helps control finances by revealing spending patterns in bank statements. Use spreadsheets or apps to categorize and identify areas to reduce costs. Monitoring daily expenses like utilities and entertainment ensures living within your means, aiding quicker achievement of financial goals.
21. Help Protect Your Finances
Helping ensure financial security involves more than saving. Check your credit scores for better loan and credit cards. Protect accounts with fraud alerts and strong passwords. Use your tax refunds by saving or investing.
22. Cut Out Unnecessary Spending
Spending on unnecessary items is tempting, but it accumulates quickly. Unsubscribe from marketing emails to avoid impulse buys. Opt for store brands over premium ones and reduce convenience purchases, such as paper towels and toilet paper.
23. Look for Spending Cuts
To save money, analyze your spending. Review bills to find cuts, like a cheaper phone plan, pooling, or restaurant spending. Small changes, such as canceling an unused gym membership or opting for free entertainment, accumulate. Mindful spending helps you save without deprivation.
24. Reduce Energy Consumption
Cut utility costs by adopting easy habits: turn off lights, unplug devices, use energy-efficient appliances, adjust thermostats, and wash with cold water. Seal windows and fix leaks to prevent energy waste.
25. Prioritize Your Savings
Treat saving as a must-pay expense with transfers. Use part of your tax refund to enhance savings. Regular saving, even small amounts, speeds up reaching long-term goals.
26. Create a Spending Plan
A spending plan assigns a purpose to each dollar, aiding effective money management. List income and expenses, allocate funds according to priorities, and use apps for tracking and adjustments. This method ensures you cover necessities and save or invest, reducing financial stress and enhancing goal achievement.
The Bottom Line
These are some of the ways to save money. Cutting costs often yields unexpected savings. Sticking to a budget plan can be motivating. Challenge yourself persistently, and monitoring your savings can significantly improve your financial situation.
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Sources
- Consumer Expenditures--2023. https://www.bls.gov/news.release/cesan.nr0.htm
