To save money, or not to save money…
Saving money can be difficult for a lot of people. In fact, more than 50% of Americans have less than $1,000 in savings. If you have that little in the bank, just one unexpected expense could force you into taking out a costly personal loan or into credit card debt.
It’s very easy to spend money without noticing how much you’re spending, and once it’s gone, you can’t get it back. If you’ve tried to save but have had trouble actually putting money aside, here are some savings tips that can help.
1. Set up direct deposit to a separate account
If you aren’t already being paid by direct deposit, you should set it up. It will save you from the hassle of cashing a check every payday and give you an excellent way to start saving. Most companies will let you split your direct deposit into multiple accounts. You can take advantage of that by setting aside a portion of your take-home pay in a savings account.
While most of your pay can go to a checking account to pay bills and living expenses, even $25 or $50 sent to a savings account each pay period can add up to a lot over time.
2. Start automatic transfers to savings
If your checking account seems to stay near a $0 balance because you compulsively spend whatever money you do have, set up an automatic, monthly transfer to a savings account. Since the money won’t be in your checking account, you won’t be tempted to spend it.
3. Sign up for your work’s retirement plan
Similarly, you can sign up for your employer’s retirement plan. Each paycheck, some of your pay will be deducted and set aside in a retirement account. To sweeten the deal, many employers will match your contributions, which is just like getting free money. Another bonus is that contributions to most retirement plans are pre-tax, so if you contribute $100, your take-home pay will be reduced by less than $100.
4. Pretend you didn’t get a raise
If your budget is set up in a way that you spend your full paycheck and you cannot find a way to reduce spending, this saving tip can help you get started. If you get a raise at work, pretend that you didn’t and send the extra cash to a savings account each paycheck. Over time you’ll build up a nice savings buffer.
5. Make saving a game
One creative way to save money (that works well as a New Year’s resolution) is to turn it into a game. In the first week of the year, put $1 in a savings account. In the second week, put in $2. In the third week, put in $3, and so on until you’re saving $52 in the last week of the year.
If you keep at it, you’ll have saved $1,378. You can also alter the rules so you start by saving $52 in the first week.
6. Find a saving buddy
Find a friend who has similar money-saving goals and recruit them to be your saving buddy. Keep each other accountable and work towards your goals together. Let it turn into a friendly competition if that helps drive you to save more.
With someone making sure you’re following through on your promise to save, you’ll be more likely to actually do it.
7. Take advantage of a “Keep the Change” program
Bank of America's Keep the Change program will round your debit card transactions up to the nearest dollar. The difference between the price and the rounded-up amount is automatically deposited into a savings account. If you use your debit card on a daily basis, the pennies can add up quickly.
8. Invest your spare change
If you don’t use Bank of America, you can use a service like Acorns to invest your spare change. Like Keep the Change, Acorns rounds your transactions to the nearest dollar but invests the money in a mutual fund of stocks and bonds. This is a great way to save and grow your money.
One way to save money at home is to start using coupons. Stores often send out fliers with coupons attached, and manufacturers offer coupons on their website. If you’re going to buy something anyway, try to find a coupon for it, then transfer the money you saved into a savings account.
10. Buy discount gift cards
One creative way to save money is to buy retailer gift cards at a discount. Resellers offer big discounts on gift cards from other people who want to turn their gift cards into cash. You can save to 2 to 25% or more by using your cash to buy a gift card at a discount, then using the gift card to make the purchase.
11. Get a cash back credit card
One way to save money fast is to get a cash back credit card. These cards will pay you between 1 and 5% of your total purchases, just for using the card.
Excluding housing, the average 25 – 34-year-old spends about $40,000 per year. If you can get an average 2% cash back on your purchases, you’ll save $800. Just make sure you always pay your bill in full to avoid interest charges.
12. Go all cash
If you have trouble controlling how much you spend using a card, go all cash instead. Each month, set aside cash in envelopes that are marked with your budget categories. When you run out of cash in the envelope, you can’t spend any more money in that category. This will give you a tangible way to track how much you’re spending, which will help you save.
13. Find a better bank
Lots of banks charge fees these days, but there are plenty that don’t. Online banks especially tend to have low fees and great interest rates. If you’re seeing money disappear to bank fees, close your account and open a new one at a bank that won’t charge you.
14. Find an inexpensive hobby
Entertainment can be expensive. A night at the movies can cost almost $9 on average per person for tickets alone. Instead of going out, find an inexpensive hobby, like reading books from the library, free-to-play games, or board games that you can play over and over. The savings over going out to eat or for drinks will add up quickly.
15. Create a budget, and make savings a line item
If you don’t have a budget, make one. If you do, make savings a line item in the budget and reduce your spending elsewhere. If you budget for savings rather than just trying to save what you don’t spend, you’ll find it much easier to actually set money aside.
16. Curb online shopping by deleting saved payment info
Online shopping is incredibly convenient, but that makes it easy to spend a lot of money on things you didn’t really need.
One way to curb this habit is to delete your payment info from shopping sites. If you have to go through the hassle of finding your credit card and typing in the details every time you want to make a purchase, you’ll have more time to consider whether the purchase is really worth it.
17. Save while you spend
Sign up for a rebate website like Ebates, which pays back a percentage of your purchases on participating sites. When you get your rebate check, send it to a savings account.
18. Don’t go grocery shopping without a list
Have you ever gone to the grocery store and found that by the time you get home, you have a bunch of junk food and instant meals that you don't really need? Instead, create a meal plan for the week and write down just the ingredients that you need. When you get to the store, don’t deviate from the list. If you cook your own meals, you’ll save money and be eating healthier food.
19. Buy and cook food in bulk
If you don’t have much time to cook, plan ahead and cook bulk meals. If you invest in some Tupperware, you can easily cook large servings of meals like lasagna, soup, or burritos, and freeze them. When it's dinner time, and you aren’t able to cook, put a serving in the microwave and enjoy. Buying in bulk will save you money in the long run, and you’ll cut down on expensive takeout meals.
20. Go vegetarian, at least sometimes
Meat is expensive, but beans and other proteins favored by vegetarians are quite cheap. There are a lot of fun vegetarian recipes out there that cost much less than a meal that features meat as the primary protein. You’ll save money while discovering an entirely new type of food.
21. Buy generic and pocket the difference
If you regularly buy name brand food or clothing, consider trying to the generic product. Quite often, they're made by the same company, and there is little difference between the two besides the marketing and price. Put the money you save aside for a rainy day.
22. Cut down on how often you go out to eat at work
Going out for lunch with co-workers is a good team-building opportunity, but try to avoid going out for lunch more than once a week. Bring a sandwich or some leftovers to work on the other days of the week. You’ll save a lot in the long run.
23. Host nights in rather than nights out
Going out with friends can be expensive. Instead, invite your friends over for the evening to share a meal, games, and conversation. Cooking at home is a significant saving over going out, and you can ask your friends to share in the cost by making it a potluck event.
24. Find free events to go to
People in cities have the advantage here, but even smaller towns have all sorts of free activities and events for people of all ages. Check out your local library or town hall to see if there's any festivals, movie nights, or similar events that you can attend instead of paying for entertainment somewhere else.
25. Cut out unnecessary subscription services
People have all sorts of subscription services these days, but how many are truly necessary? If you subscribe to multiple streaming packages, like Netflix and Hulu, figure out which you use more and cut the other one out. This is a great way to save because cutting out a recurring cost is like saving over and over.
26. Learn a hobby that’s useful around the house
Find a hobby that can help you get better at DIY repairs. If you like computers, learn more about how they work so you can troubleshoot your PCs problems without bringing it to the store. If cars are more your thing, learn how to do basic maintenance and repairs on your vehicle. Online resources can be a huge help when it comes to learning these kinds of topics.
27. Slow your commute down
Nobody likes commuting, which is why people try to get from point A to point B as quickly as possible. Speeding, however, reduces your gas mileage. Even if you don’t get an expensive speeding ticket, you’re wasting money by paying for gas that you could have saved by driving a little.
28. Get into exercising
This has a twofold benefit when it comes to saving. First, the time you spend working out is time you don’t spend thinking about ways to spend money. Plus, if your healthy, you're less likely to get sick and need to visit a doctor, saving on medical bills.
29. Work out at home instead of the gym
If you already exercise, consider working out at home and saving your gym fees. Not only will you avoid the crowds, but you'll also get to try fun new workouts, like bodyweight fitness routines.
30. Get excited about paying off debt
Americans are more debt-ridden than ever, but it is possible to escape from the burden of debt. Try to get excited about paying your debt off by using the debt snowball method. Focus on sending extra cash towards your smallest debts first. When they’re paid off, use that money to pay off the next biggest debt.
This results in a series of smaller victories that will leave you excited and push you forward on the path to being debt free. Saving money by paying off debt will feel fun.