Saving Money / Savings Tips
Saving money is hard, especially in these times of inflation. It seems like everyone lives paycheck to paycheck. But saving is possible, it just takes motivation, dedication and perseverance.
Think you can’t save $10,000 in a year? Follow these ten steps and you might be surprised.
- Break it down
- Review your budget
- Eliminate unnecessary monthly expenses
- Don’t pay interest on your credit cards
- Reduce discretionary spending
- Check your grocery bill
- Review your fixed expenses
- Save your deals
- Start secondary agitation
- Make your savings automatic
1. Break down
Can you save $10,000 in a year? Saving $10,000 seems like an insurmountable task. But if you break it down, it’s much more manageable. If you want to save $10,000 in one year, you will need to reduce your monthly budget by $833.33.
Still overwhelmed? This is the same as $384.61 bi-weekly, or $192.31 per week. If you really want to break it all down, it’s $27.40 a day.
2. Review your budget
To know where you can save money, you first need to know where your money is going. Look at your bank and credit card statements for the past year to determine what you spend money on.
You don’t need to account for every penny – it’s supposed to be manageable, after all – but get a rough idea of what you’re spending each month across major categories. Look at housing, transportation, food, utilities, entertainment, health care, clothing, loan repayments, etc. Have a category called “miscellaneous” – this is usually one of the first places you can narrow down.
When reviewing where you spend money, try to identify if there are any that you can cut out entirely. Then look for the ones you can narrow down. For example, you could reduce your purchases of clothes or shop at less expensive stores.
3. Eliminate unnecessary monthly expenses
Look at your budget to see what you can do without. Subscriptions are a big culprit here – you sign up for streaming services or news subscriptions that get charged monthly and then forget about them. Look carefully to see which ones you can eliminate. And don’t let the fact that they’re cheap fool you – knocking out a few subscriptions at $5 each per month can add up pretty quickly.
Projected savings: $25 per month
4. Don’t pay interest on your credit cards
If you have a balance on your credit cards, you’re paying extra every month for that tank of gas you’ve already used up and that dinner you’ve long forgotten. Pay off your credit cards, then stop using them.
When applying for a credit card, ask yourself, “Would I take out a loan from the bank for this purchase?” If the answer is “no,” which it usually is, don’t use your credit card either, because that’s what you’re doing. If you have money in your budget and in your checking account, use your debit card instead. If you don’t, seriously consider whether the purchase is necessary.
If you have credit cards that charge annual fees, consider getting rid of them. There are so many free cards that have rewards and other bells and whistles that there’s really no good reason to pay an annual fee.
Projected savings: $100 per month
5. Reduce discretionary spending
Watch how much you spend on things like entertainment and gifts. While you don’t need to completely remove these things, it’s often a good place to cut back. Instead of going out to dinner at a fancy restaurant, choose a less expensive place or go for lunch instead. Go out once a month instead of once a week. And choose fewer or less expensive gifts — it’s true, after all, that it’s the thought that counts.
When you go out, look for bargains. You might be able to catch this hit movie on a Tuesday night for $5 instead of paying $10 on Saturdays. If you’re an AAA member, you can get discounts on movies, museum admissions, hotel stays and more.
Projected savings: $150 per month
6. Check your grocery bill
People really feel the pinch at the grocery store, so it might seem like you can’t cut back here. But watch what – and how much – you buy.
If you still buy name brands, especially for products like paper products, consider switching to generics. And watch how much food you throw away because it spoils before you can eat it. Planning meals ahead of time and shopping around that plan can help you avoid over-buying and wasting.
If your weekly grocery shopping includes a trip to the warehouse club, make sure you enjoy it the right way. When comparing prices between the club and your regular grocery store, remember to factor in the annual membership fee. If you only go to the warehouse club every two months, that $60 annual fee could add another $10 to your bill each time you go. Make sure it’s still worth it.
Projected savings: $100 per month
7. Review your fixed expenses
Don’t overlook monthly expenses that you consider fixed, such as utilities. Sometimes you can cut your bills a little bit by reducing your energy usage or switching to a cheaper cable plan, if you still use cable.
Gas is taking up a bigger chunk of everyone’s budget these days, so be sure to shop around for the best price. Using a gas app can help you find the best deal wherever you are, even if it’s near you. Your regular gas station may not have the lowest price every day, so it’s worth comparing. And try grouping trips together to drive less and use less gas.
Projected savings: $25 per month
8. Save your bargains
When you get a long-awaited windfall, like your April tax return or an end-of-year bonus, it’s tempting to splurge on something you wanted. But if you put that money into savings right away – before you can spend it – you can make a big dent in your goal. And if you get a raise, split it between your savings and your monthly budget.
Projected savings: $250 per month or $3,000 per year
Here’s a pro tip for those who get paid weekly or bi-weekly: base your monthly budget on four weekly paychecks or two bi-weekly paychecks. If you get paid weekly, you will have four months during which you will receive five paychecks instead of four. If you are paid every two weeks, there will be two months where you will receive three checks instead of two. If you cover your monthly bills with the usual number of checks, you can cash these “extra” checks.
9. Start a side hustle
There are two ways to increase your savings: spend less and earn more. Doing both sets you up for success. Consider taking a second job or adding freelance work. Walking dogs, delivering errands, and carpooling can bring in a few extra bucks each week.
A caveat about a side hustle: be sure to set aside some of your extra income for taxes. If you make extra money throughout the year, you may have to pay estimated taxes each quarter so you don’t get penalized at tax time.
Projected savings: $200 per month
10. Make your savings automatic
It won’t save you more money, but it will help you stay on track to reach your savings goals. Have a portion of your paycheck directly deposited into a savings account. If you have a side hustle, have that money go directly to savings as well, making sure to take taxes into account.
And make that savings account hard to access. Use a different bank from the one you use for your checking account and don’t download the app. Put that money away and forget about it.
If you follow all of these steps and achieve the projected savings shown, you will have saved $10,200 by the end of the year. You can now invest that money in a special long-term goal or keep it in the bank as a financial cushion.
Nobody says making these changes will be easy, so be sure to commit to them. If you’re saving for a specific goal, keep a reminder handy of why you need to spend less. If you’re saving to buy a house, for example, keep a picture of the type of house you want in your wallet, next to your credit cards – you might be less likely to pull one out and be charged something. which you don’t need.