If you want to save money for a down payment on a home, your retirement fund or just a rainy day you may be wondering how to trim your expenses. Ultimately, the best way to save money is the one that you can stick with and apply consistently. To get you started, here are our tried and true money-saving tips.
Find out now: How much do I need to save for retirement?
Money-Saving Tip 1: Cancel Unnecessary Expenses
Let’s start with the basics. If you want to save money you should stop paying for things you don’t need. That goes for the newspaper you’re not reading, the gym membership you’re not using and any other subscription service that’s not a necessity (cable television, we’re looking at you). Once you’ve eliminated some recurring expenses you can try negotiating or upgrading the rest. Could you qualify for lower health insurance premiums with a different plan? Could you negotiate your way out of banking fees or into a lower phone bill? You won’t know until you try.
Money-Saving Tip 2: Cook at Home
Eating out less frequently – or never – will save you big bucks. Already cook breakfast and dinner at home? Try bringing your own lunch. Save restaurant meals for special occasions and you’ll reap serious savings.
Already cook at home and want to save money on groceries? The oldest tips are the best. Shop store brand, stick to whole foods rather than prepared foods, buy staple foods in bulk and cut back on meat and dairy if you can. A big pot of lentil and vegetable soup (made from dried lentils bought in bulk, of course) will take you far with the addition of your favorite spices. If you’re looking over your last few grocery store receipts and want to find something to eliminate, try starting with the least healthy foods. Cutting out your regular ice cream pint or crackers will save you money and improve your diet.
Money-Saving Tip 3: Plan Ahead
Planning ahead can save you serious money in several aspects of your budget. You probably already know that you spend more at the grocery store when you don’t stick to a list. The same goes for other purchases, too. Take stock of your wardrobe and make a list of any gaps that need filling or items that need updating. Stick to that list and you won’t waste money on unnecessary clothing purchases. Planning ahead when you’re traveling – even just on a day trip – lets you find the cheapest options available.
Money-Saving Tip 4: Substitute Treats
Saving money can seem like a drag. No lunches out? No treats at the grocery store? No drugstore splurge thrown in the basket at the last minute? Not exactly. When you’re trying to save money it’s all about making smart substitutions. Go for coffee with a coworker instead of lunch if you want to stretch your legs and socialize but don’t want to spend $10+ on lunch out. Pack a picnic instead of hitting up a restaurant for weekend brunch with your friends. You get the idea. Learning how to save money doesn’t have to be about total self-denial.
Money-Saving Tip 5: Automate
Wondering how to save money over the long haul? One of the best ways you can ensure the long-term sustainability of your savings plan is to automate your savings. If your employer will allow it, ask for your paychecks to be divided between two (or more) savings accounts so you can separate the percentage of your earnings that you want to save or use to pay off debt. Automate all the bills you can so you don’t waste money on late payment penalties or credit card interest. Money you can’t see is money you can’t spend. If you want to save, automating the process will help you on the way.
Money-Saving Tip 6: Boost Your Income
Of course, all the penny pinching in the world will only go so far if your income is too low to meet your needs. That’s why so many voices in the personal finance community advocate having a “side hustle” that lets you boost your income. You can only save so much without making some serious lifestyle changes. If you want a roof over your head, clothes on your back and food in your belly you’ll have monthly expenses.
Cut back everything but the bare essentials and you’re saving money, sure, but you’re living a precarious (not to mention unpleasant) life. Some folks are already working crazy hours and multiple jobs and still don’t earn enough. But if you have time in your schedule to take on more income-earning work and you really want more room in your budget, consider boosting your earnings.
At one point or another, whether it’s to pay off student loans, save up for a home or prepare for retirement most of us will have to trim our expenses and save where we can. If you’re ready to start saving or to kick your savings up a notch, your best bet is to take stock of how much you currently make and spend. Without an accurate picture of your spending you won’t know where you can cut back. Start tracking your expenses for a week, and then a month. Chances are, when you go over the list of what you’ve spent you’ll see opportunities to save.
Photo credit: © iStock/Tabee, © iStock/LemonTreeImages, © iStock/pinstock