It’s hard to build up savings, especially now when it seems like costs are constantly going up. Buying fewer nonessential items and cutting costs where you can are great pieces of advice, but they’re not very specific. Plus, if you have bad spending habits, it’s really tough to break them and replace them with positive behaviors. You may not even know where to begin.
Fortunately, we’ve compiled a list of 7 great strategies to help you save money. These tips will help you beef up your savings account and get out from under debt. Even better, they’ll help you cement these practices into habits, so you never have to worry about going into the red again.
Track your current spending. If you’re trying to cut costs, it’s best to start by figuring out what your average expenses are right now. If you don’t know where your money is going, it can be difficult to tell where you can trim the fat. Plus, you can’t shape a budget if you aren’t able to first determine what spending is essential.
That’s why it’s crucial that you go through your bank statements and make a log of where the money is flowing. Categorize charges by the type of purchase, such as ‘take out’ ‘entertainment subscriptions’ or ‘clothes shopping’. This will give you an idea of what your finances actually are, and it’s a great foundation to build upon with other money saving practices.
You should keep this up even after you’ve built your budget, too. It’s really easy to fall back into old habits and let small purchases add up over time. Therefore, you should review your finances weekly, so you can always be aware of how much money you have on hand, and where the rest has been going, so you aren’t blindsided by anything.
Set a food budget (and stick to it). For many people, a huge portion of their spending is dedicated to food. This may seem tricky to cut down on, because it’s not exactly a non-essential expense. After all, we all have to eat, right? Well, it’s true that you will need to spend some money on food, but for many people, you can probably spend less.
Any easy place to start is by eating out less. While it’s convenient and tasty, restaurant meals are expensive, and this price skyrockets if you’re paying extra for delivery. Eating simple meals at home can save a lot of money, and oftentimes it’s a good way to stay physically healthy as well. If you don’t have the time to cook every night, you can look into options like meal prepping as well!
Your grocery costs can likely be lowered too. Make sure you make a shopping list before you go to the store, and try your best to adhere to it. Impulse purchases can add up to shockingly high numbers, so you want to put down the bag of chips or the ice cream, unless you’ve already added it to the list. Other great strategies include investigating coupon options and/or start buying generic brands to help save a little bit of money.
Cancel Recurring Charges. There’s so many subscription services out there now that it’s easy to spend half your paycheck on monthly fees. For instance, you may find that one TV streaming service is only $7 a month, so it probably doesn’t seem like making an account would be particularly concerning. But then you might come across another streaming service that offers different shows, and it’s easy to justify signing up for this one, since it’s just $10 a month. However, now you’ve more than doubled what you’re paying for television every month, and it just continues to add up with every subscription you set up.
It’s not just streaming services either! Tons of apps offer premium versions for just a few dollars a month. Many e-commerce sites will also offer discounts if you sign up for a subscription for monthly deliveries of their wares. This can be a really good program if you actually need regular deliveries. But a lot of people might join to save 20% off their skincare or pet products, but still have leftovers by the time the next month’s shipment arrives. Now they have more than they need and they’ve been charged for expenses that are unnecessary.
That’s why it’s a really good idea to track your recurring payments and cancel as many as you think you can do without. You may even find that you’re getting charged for subscriptions that you forgot you ever signed up for! Since it’s such a small amount each month, if you don’t pay close attention to your finances, it can be easy for these to accumulate. Plus, if you find that you really miss the products or services and were getting use out of them, you can always sign up again.
4: Start a Savings Get ahead of debt. If you have debt weighing you down, you should start paying more than your minimum monthly payments and work hard to clear it out. Not only is your debt a regular expense that it would be nice to eradicate, the longer you take to pay it off, the more interest it accumulates. So while the minimum payments might be cheaper in the meantime, they’re more expensive in the end.
If you’re able to, start by paying off the smallest credit card balance, medical bill, or other payment that you have, in entirety. In the meantime, you’ll continue making payments on the other debts you owe, but this way you’ll be able to check one off the list for good.
And once you’ve wiped that one away, you can start saving up to pay off the next one. Work your way up by beginning with the balances that you owe the least on. Not only is this a good strategy because you’ll ultimately wind up debt-free, even if it takes some time, you’ll learn to build good habits with your money, which can help prevent the bills from piling back up.
Make a habit of saving. You never know when disaster will strike and you need to pay emergency repair or medical bills. To avoid going deep into debt because of sudden expenses, you should build a solid cushion of savings that can help you be prepared for the unexpected.
While it’s ideal to limit your recurring monthly transactions, one automatic payment that you should set up is a regular deposit from your checking account to your savings. You can set it to whatever amount you’re comfortable with and make it a weekly, biweekly, or monthly transfer. This will help you make saving a habit without needing to do anything extra. Just make sure that you always have enough money in your checking account to actually cover the payment to your savings account.
If you’re worried that you’ll be left broke because you might not remember that a savings transfer is coming up, then there are other solutions that don’t involve pulling from your checking account automatically. For instance, you can structure your paycheck deposit so that a percentage of it goes directly into savings, while the rest goes into checking, so you never are confused about how much spending money is available to you.
Alternatively, you can also just make manual transfers to your savings account once you’ve paid all your bills and feel comfortable with the balance of your checking account. However, this might not lend itself to consistent savings, so if you can make an automatic method work, it might help you build a bigger nest egg. Also, remember that this will only work if you don’t touch your savings account unless absolutely necessary!
Lower your essential bills. This one might sound hard, because there are certain services you need to pay for, and it’s not like you would choose to pay a higher price when a lower one is available. So how do you start paying less for necessary expenses? Well, there’s a few ways, depending on what bills you have.
For instance, if you pay for electricity, you can start small by turning off lights and appliances when you’re not using them. Don’t crank the AC or heat if you can help it, and instead opt to wear layers of clothing that you can take off or add onto as needed.
You should also look over your current contracts and policies. Are you paying for a landline that you don’t use any more? Perhaps you’re overcompensating with your insurance? Try eliminating parts of these bills, if you’re able to comfortably do so.
Another strategy is to re-negotiate your payments. Call your phone service, cable company, or internet provider, and see if you are able to convince them to give you a lower rate. If you explain that you’re considering switching to another company, they will often offer you a reduced bill to keep you as a customer.
If all else fails, see if you are able to switch providers. Shop around! Lots of companies will offer special promotions for new customers and incentives to get you to switch to them. Taking advantage of these deals can save you a lot of money.
Do it yourself. This can apply to almost everything that you might pay someone else to do for you! You can save a lot of money by getting rid of your landscaping service or learning to do simple repairs yourself. Of course, for bigger issues like trouble with your wiring, you should always hire a professional to be safe. However, there’s still plenty of opportunities to DIY your way to a bigger bank account.
The internet is a great resource, so even if you’re not sure how to put together furniture or do some minor plumbing, you can find thousands of videos and articles that walk you through it. If you’re trying to renovate or remodel parts of your home, then doing it yourself can save you a whole lot of money.