You can save money in all sorts of ways. You can put cash in a safe. You can simply mentally categorize a certain amount of money in your checking account as “savings.” But it’s crucial to put savings in an account created specifically for that purpose. It’s safest there, it’s a good place for an emergency fund and provides you with the ability to buy something expensive. Plus it’s earning a little interest.
Why Is Saving Important?
Unless you’re fabulously wealthy, it’s likely that large expenses in your life will require planning in order to purchase. Define what you’re saving for to help keep you on track when it comes to avoiding unnecessary purchases. For example, if you remember that your goal is to save $100,000 over the next ten years in your child’s college fund, it will be a lot easier to stay out of the drive-thru line.
Consider that you may need to save up for pricey necessities like a car and a home. The average American will own a total of six cars in their lifetime, so it may be a good idea to start saving for your next vehicle now, even if you don’t currently need one.
Finally, it’s essential to save for retirement from your first job to your last. According to a recent study, most Americans near retirement have only save twelve percent of the recommended amount for retirement. That may be because getting to a place where you have extra income to save takes time, but may also be because many people don’t practice good money-saving techniques from an early age.
1. Set a budget – How To Save Money
It’s hard to know how much you’ll be able to put away in savings if you don’t know how much money you’ll… be able to put away in savings. Putting away too much too early can wreak havoc on your checking account and might require you to transfer money back into your checking and create a strain on your finances generally.
2. Automate your savings
Most financial institutions allow you to link your checking account with your savings account so that a certain amount of money will move into savings without you having to even press a button. Many employers will allow you to split your direct deposit so that part of your check goes straight into savings. Even if they don’t, try have the auto-deposit happen on payday and you’ll hardly miss the money you would have otherwise spent. Consider using a cash account which normally offers higher interest than the savings account of brick and mortar banks.
3. Build an Emergency Fund – How To Save Money
Some experts recommend setting aside six months worth of living expenses in case of emergencies. This helps you avoid going into debt if you ever lose your job or have to pay unforeseen medical expenses.
4. Use App to Track Your Spending
You may be surprised about where your money is going. Keep a record of what you spend to see how small expenses add up. You may not think that coffee every once in a while makes a dent in your savings, but seeing the sum of your purchases may change your mind.
5. Cut down on eating out and trips to the coffee shop – How To Save Money
Could you get by on two cups of coffee, not three… or eight? Or one lunch out each week rather than four or five. Starbucks is expensive and so is eating out. If you’re willing to start brewing your own coffee and channelling your inner Gordon Ramsay, you stand to make a ton of savings. When you do go out try to hold yourself back from ordering the most expensive item on the menu or ordering lots of alcoholic beverages that have a high markup.
6. Take advantage of anything that’s free
They say the best things in life are free. And you should absolutely avail of them. Look up free events in your local area. Take trips to local parks and beaches. Go and visit your museum on days it’s free. Take advantage of free subscription services like Spotify, visit your local library rather than buy books or join clubs that often hold free events.
7. Become a “cord cutter” – How To Save Money
Cord cutting refers to canceling your satellite television subscription and it’s more popular now than ever before. Many people are choosing to save money on cable T.V. and watch online video services such as YouTube, Amazon Prime Video or Netflix instead. It’s a good option for those who don’t watch T.V. If you cut out a $70 a month cable television service you’d save $840 over the course of the year.
8. Use saving money apps
In the last few years, a handful of apps have been created to automatically take small increments of money and deposit them in an investment or savings account. These services redirect funds that you would never know are gone. (This speaks to a certain rule of saving: Save small but save a lot. “Small” can mean different things. More on that in a bit.) The app rounds up purchases to a dollar and then take the difference and put it into an account. Some direct a certain percentage of your paycheck to savings. Some will even help you find subscriptions that you may have forgotten about so you can cancel them and allow the app to allocate that money toward savings.
Consider using an app like Mint that keeps track of your spending goals, expenses, and budgets. This can be an easy way to see how you’re doing and get more familiar with your finances.you save. Since this money is relatively easy to access, consider using this account to save for unexpected expenses.
You may not become rich overnight, but the key to amassing a huge savings is patience. Saving money comes down to becoming aware of your unconscious habits and making a consistent effort to change them. Anyone can be more financially responsible in a few simple steps, using the many resources available to them.
9. Use public transport
Now might be a good time to stop Ubering your potential savings away and start taking public transport. Better still walk or cycle. All those $10 trips add up to a lot over the course of a month and even more over a year, not to mention the costs involved in owning a car. There might be some occasions when taking a taxi is an absolute must but when you can — use public transport or walk to save on transport costs.
10. Plan Your Groceries – How To Save Money
Make a list of what food you’ll need for the week, keeping in mind what meals can be made from the ingredients, and don’t buy anything that isn’t on your list. It helps not to go to the grocery store hungry or with a picky eater. Meal planning is another great option that can help you save time and money while making it easier for you to eat healthily.
11. Consider Refinancing Your Mortgage
You may find that you can save money over time by changing the rate of your mortgage. Remember to talk to a financial advisor before signing onto any major financial contracts.
12. Take advantage of employer retirement contributions
If you work for a company that matches your retirement contributions — you should absolutely take them up on this offer. You’re essentially getting “free money” and in most cases doubling the amount you’re saving. If you have a couple of pension plans lying around, you could save money by transferring them to a low fee investment provider.
13. Reduce fees charged by your bank – How To Save Money
Bank fees might seem small, but they all add up. Banks have a way for slapping on fees each time you doing anything from using an ATM that’s not theirs to not keeping your savings account balance above a certain level. Be aware of the fees your bank charges and try to avoid them. Only use their ATMs and consider opening or moving your savings account or savings investment account to a provider that requires no account minimum balance or transfer fees. Your wallet will thank you for it!
14. Save your tax refund
If you have been lucky enough to get some taxes back from the government — save them rather than spend them. You can absolutely do without this money, you’ve hardly missed it over the course of the year, you won’t miss it now. This is a quick way to save a large sum of money.
15. Travel during off-peak season
We don’t blame you if you’re a fan of jet-setting. And we’re not saying don’t do it — but rather look at how you can reduce the cost of your vacation. Set up price alerts on flights, book well in advance and travel during the off-peak season. Remember, peak season in some countries might be different from that of your own. Thankfully someone’s created a handy map to let you know the peak season of every country around the world — so you can save money while you explore the planet.
16. Do house swaps or rent an apartment over a hotel – How To Save Money
When traveling, staying in hotels can rack up a pretty penny. Particularly if you are traveling with a family. Instead, consider doing a house swap. This still allows you to make the trips you always wanted to while saving money at the same time. House swap services cost as little as $150 a year, that’s a fraction of the cost of a hotel. If you’re not in a position to do a house swap consider renting an apartment or a room in a house on Airbnb or another apartment rental service.
17. Cancel subscriptions (or find cheaper versions)
Chances are, you have a few subscription services that you’ve forgotten you ever even signed up for. Now would be a good time to cancel those. Do some digging in your bank or email account to figure out how much they are costing you. Decide which to keep and which to cut or at very least try and find a cheaper alternative.
18. Do things yourself
While it will take you some extra time, doing things yourself rather than having someone else do them is a great way to save money. Using a laundry service or hiring a handyman can be costly over the course of a year. So get off the sofa, head to the store, buy some laundry detergent and maybe a hammer and start saving the money you would have otherwise given to other people.
19. Submit your expenses (if your work entitles you to) – How To Save Money
If you work at a company that allows you expenses for travel, food or other costs you incur — make sure you don’t forget to claim them. This is money you have effectively loaned your company and getting it back is as easy as submitting a few receipts. If your not an avid receipt hoarder, use your phone to take pictures of them. That way, you’ll never lose them.
20. Start investing
The sooner you start investing the sooner you start benefiting from the power of compounding. This essentially means — giving your money more time to make money. If you’re saving for something far into the future like retirement or a young child’s education, you might be better off investing apposed to saving. In the past, inflation outpaced savings account interest rates. Investing typically (but not always) provides higher returns, provided you can lock your money away for a long period of time.
21. Buy Used – How To Save Money
Local thrift stores and online auction sites like eBay offer everything from clothes to electronics at stellar discounts. You can get slightly used high quality items at a fraction of the cost of their newer counterparts.
22. Sell Your Extra Stuff
Save money on your new clothes, housewares, and electronics you purchase by selling your old ones. Check your closet for clothes you haven’t worn in months and for old electronics. There are many places to sell unwanted items online, including eBay, Craigslist, or Facebook Marketplace. You can also hold a traditional yard sale if you want to sell in bulk.
24. Use a Savings Calculator – How To Save Money
Putting money away consistently is hard enough as it is, so utilize an easy online tool that can calculate interest over years and help you determine how much your savings may grow in the years to come.
25. Purchase Discounted Gift Cards – How To Save Money
Websites like CardPool allow users to sell gift cards they’ll never use, for slightly lower than their values. Consider buying gift cards to places you frequently shop to save instantly on everything you buy there.
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