What are Some Money Saving Tips ? While you may not have control over the economy, you do have control over the actions that you take. Compliments of BALANCE, here are 10 ways to manage your finances.
1. Keep track of your spending.
If you know where your money is going it will be easier to make changes if you need to. Try using BALANCE’s Fritter Finder form for a week or two to find out where your money is going.
2. Separate wants from needs.
Do you really need that 42-inch flat screen television? When money is tight it should not be spent unless absolutely necessary.
3. Avoid using credit to pay your bills.
While it may make things easier now, using credit only increases your monthly payments in the future.
4. Save regularly.
Have some of your paycheck directly deposited into your savings account or set up an automatic transfer each month from your checking to your savings account.
5. Check your insurance policies.
Review the coverage for all your plans. You may have too much and be wasting money or too little and not be adequately covered. Virginia CU Insurance Services can help you find the best coverage at the best price.
Be careful about spending a significant amount of money on periodic purchases, like gifts and vacation. While you may feel good while you are spending the money, you may wish you had the money later.
6.Cut or downgrade your services.
Can you get a cheaper cable package or have no cable at all? If you have a cell phone consider cutting your land line.
7. Try lowering your energy bill.
Turn off appliances and lights when they are not needed. Purchase energy-efficient light-bulbs. When you can, use a fan instead of air conditioning or put on a sweater instead of turning on the heat.
8. Consider signing up for online bill payment.
Not only will you save on stamps, but you can make sure your payments are received on time. VACU’s online Bill Pay is free for members.
9. Cut down on take-out ordering.
Even if the meal is not expensive, doing it frequently can really add up. A $10 pizza once a week will cost you over $500 a year!
Saving is easier when you have a plan—follow these steps to create one
Sometimes the hardest thing about saving money is just getting started. This step-by-step guide can help you develop a simple and realistic strategy, so that you can save for all your short- and long-term goals.
10. Record your expenses
The first step to start saving money is figuring out how much you spend. Keep track of all your expenses—that means every coffee, household item and cash tip as well as regular monthly bills. Record your expenses however is easiest for you—a pencil and paper, a simple spreadsheet or a free online spending tracker or app. Once you have your data, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. Use your credit card and bank statements to make sure you’ve included everything.
11. Include saving in your budget
Now that you know what you spend in a month, you can begin to create a budget. Your budget should show what your expenses are relative to your income, so that you can plan your spending and limit overspending. Be sure to factor in expenses that occur regularly but not every month, such as car maintenance. Include a savings category in your budget and aim to save an amount that initially feels comfortable to you. Plan on eventually increasing your savings by up to 15 to 20 percent of your income.
12. Find ways to cut spending
If you can’t save as much as you’d like, it might be time to cut back on expenses. Identify nonessentials, such as entertainment and dining out, that you can spend less on. Look for ways to save on your fixed monthly expenses, such as your car insurance or cell phone plan, as well. Other ideas for trimming everyday expenses include:
- Search for free activities
- Use resources, such as community event listings, to find free or low-cost entertainment.
- Review recurring charges
- Cancel subscriptions and memberships you don’t use—especially if they renew automatically.
- Examine the cost of eating out vs. cooking at home
- Plan to eat most of your meals at home, and research local restaurant deals for nights that you want to treat yourself.
- Wait before you buy
- When tempted by a nonessential purchase, wait a few days. You may realize the item was something you wanted rather than needed—and you can develop a plan to save for it.
13. Set savings goals
One of the best ways to save money is to set a goal. Start by thinking about what you might want to save for—both in the short term (one to three years) and the long term (four or more years). Then estimate how much money you’ll need and how long it might take you to save it.
Common short-term goals: Emergency fund (three to nine months of living expenses), vacation or down payment for a car
Common long-term goals: Down payment on a home or a remodeling project, your child’s education or retirement
Set a small, achievable short-term goal for something that’s fun and goes beyond your monthly budget, such as a new smartphone or holiday gifts. Reaching smaller goals—and enjoying the reward you’ve saved for—can give you a psychological boost, making the payoff of saving more immediate and reinforces the habit.
14. Determine your financial priorities
After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. For example, if you know you’re going to need to replace your car in the near future, you could start putting away money for one now. But be sure to remember long-term goals—it’s important that planning for retirement doesn’t take a back seat to shorter-term needs. Learning how to prioritize your savings goals can give you a clear idea of how to allocate your savings.
15. Pick the right tools
There are many savings and investment accounts suitable for short- and long-term goals. And you don’t have to pick just one. Look carefully at all the options and consider balance minimums, fees, interest rates, risk and how soon you’ll need the money so you can choose the mix that will help you best save for your goals.
16. Make saving automatic
Almost all banks offer automated transfers between your checking and savings accounts. You can choose when, how much and where to transfer money or even split your direct deposit so that a portion of every paycheck goes directly into your savings account.
17.Watch your savings grow
Review your budget and check your progress every month. That will help you not only stick to your personal savings plan, but also identify and fix problems quickly. Understanding how to save money may even inspire you to find more ways to save and hit your goals faster.
18. An emergency fund is a must.
Chances are you’ve already been told that you need an emergency fund somewhere in the ballpark of three to six months of your income. Yikes! Overwhelming, right? At America Saves, our motto is ‘Start Small. Think Big.’ In keeping with that, we recommend starting with an emergency fund savings goal of just $500. Learn more about emergency funds here.
19. Establish your budget.
The best way to jumpstart establishing a budget is to realize your spending habits. On the first day of a new month, get a receipt for everything you purchase throughout the month. Stack the receipts into categories like restaurants, groceries, and personal care. At the end of the month you will be able to clearly see where your money is going. Additionally, your bank or credit union may have this as an online-banking feature. Seeing what you spend in total on food, shopping, etc. can be humbling!
20. Budget with cash and envelopes.
If you have trouble with overspending, try the envelope budget system where you use a set amount of cash for most spending. And once the cash is gone, it’s gone. Learn more about the envelope budget system here.
21. Don’t just save money, save for your future.
There IS a difference!. As you begin to #ThinkLikeASaver, don’t simply spend less. Save with a purpose, such as college expenses, retirement, or for emergencies. Learn more about what you should be saving for here.
If you’ve taken the America Saves pledge, you’ve already chosen a savings goal which means you’re ahead of the savings curve!
22. Save automatically.
Setting up automatic savings is the easiest and most effective way to save, and it puts extra cash out of sight and out of mind. Automatic savings means you have a process in place to save at regular intervals, whether that’s monthly, weekly, or daily.
Instruct your employer to direct a certain amount from your paycheck each pay period and transfer it to a retirement or savings account (or both). Traditionally, you can set this up using your employer’s direct deposit, ask your HR representative for more details and set this up today.
If you don’t have an employer or maybe your sources of income vary, check out our other strategies to save automatically.
23. ‘Start Small. Think Big,’ with a short- term goal.
The truth is, people save more successfully when they set a short-term goal. For instance, committing to saving $20 a week or a month for 6 months is much more attainable that setting a goal to save $500 a month for a year. Once you reach the short-term goal, you’ll have created a habit of saving you can be proud of! You’ll be able to keep going strong with a new goal.
24. Start saving for your retirement as early as possible.
Few people get rich through their wages alone. It’s the miracle of compound interest, or earning interest on your interest over many years, that builds wealth. Because time is on their side, the youngest workers are in the best position to save for retirement. Learn more about different options for saving for retirement in your workplace or on your own here.
25. Take full advantage of employer matches to your retirement plan.
Often as an incentive, employers will match a certain amount of what you save in a retirement plan such as a 401(k). If you don’t take full advantage of this match, you’re leaving money on the table.
26. Save your windfalls and tax refunds.
Every time you receive a windfall, such a work bonus, inheritance, contest winnings, or tax refund, put a portion into your savings account.
27. Make a savings plan.
Those with a savings plan are twice as likely to save successfully. That’s where America Saves comes in. If you take the America Saves Pledge, we’ll help you set a goal and make a plan. And it doesn’t stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your savings goal. Think of us as your own personal support system. Take the America Saves Pledge here.
28. Save your coins – literally.
Putting aside just 50¢ a day over a year will get you almost halfway to an emergency fund. Check with your bank or credit union, and research apps that offer programs that round your purchases up to the nearest dollar and put the difference into a separate savings account.
29. Use the 24-Hour Rule.
Avoid purchasing expensive or unnecessary items on impulse with a self-imposed 24-hour rule. For any non-essential item, wait 24 hours before purchasing. It’s perfect for online shopping where your items can simply be added to your cart to purchase later.
30. Treat yourself, but use it as an opportunity to save.
Match the cost of your nonessential indulgences in savings. So, for example, if you splurge on a smoothie while out running errands, put the same amount into your savings account.
31. Calculate purchases by hours worked instead of cost.
This mental math tactic really helps you to #ThinkLikeASaver. Take the amount of the item you want to purchase and divide it by your hourly wage. For example, if you’re considering a $50 pair of shoes and you make $10 an hour, ask yourself if those shoes are worth working for five hours. Sometimes they are, sometimes they won’t be.
Avoid temptation by unsubscribing from marketing emails and texts from the stores where you spend the most money. By law, each marketing email is required to have an unsubscribe link, usually at the bottom of the email or you can reply to any text with STOP, and that should opt you out of their list.
33. Place a reminder on your card.
Remind yourself to think through every purchase by covering your card with a savings prompt such as, “Have you met your savings goal for the month?” Write the message on a piece of masking tape or colorful washi tape on your card.
34. Participate in a local Investment Development Account (or IDA) program.
If your income is low, you may be eligible to participate in an IDA program where your savings are matched. In return for attending financial education sessions and planning to save for a home, education, or business, you typically receive at least $1 for every $1 you save, and sometimes much more. That means $25 saved each month could become several hundred dollars by the end of the year. Find an IDA program near you.
35. Pay off credit cards in full each month.
The miles and cash-back are only valuable if you’re not falling into debt or paying interest. Learn more about debt and credit here.
36. Start with a goal of reducing your credit card debt by just $1,000.
That $1,000 debt reduction will probably save you $150-200 a year in interest, and much more if you’re paying penalty rates of 20-30 percent.
37. Use only the ATMs of your bank or credit union.
Using the ATM of another financial institution once a week might seem like no big deal, but if it’s costing you $3 for each withdrawal, that’s more than $150 over the course of a year.
38. Check your credit report for free once a year.
Use your annual free credit report from the three credit reporting bureaus to look for inaccuracies or opportunities to raise your score. Credit scores are used by loan providers, landlords, and others to determine what they’ll sell you, and at what price. For example, a low credit score can increase the cost of a 60-month, $20,000 auto loan by more than $5,000. Learn more about your credit score here.
39. Pay your bills on auto-pay.
This ensures they are paid on time, in full to avoid late charges. As a bonus, some loan providers offer a small interest rate deduction if you enroll in auto-pay.
40. Get free debt counseling.
The most widely available help managing your debt is with a Consumer Credit Counseling Services (CCCS) counselor. CCCS’ network of non-profit counselors can work with you confidentially and judgement-free to help you develop a budget, figure out your options, and negotiate with creditors to repay your debts. Best of all, the 45-90 minute counseling sessions are free of charge and come with no obligations. Get started here.
41. Take advantage of your library.
Libraries are gold-mines of free entertainment. They offer several entertainment options including classes, e-books, and audio-books. Some libraries even allow you to borrow things like tools and sewing machines!
42. Browse online for free or low-cost local entertainment.
Check out local events on Facebook or Eventbrite to plan some downtime. There are often events and activities listed that you probably aren’t aware are happening.
43. Volunteer at festivals.
Cultural festivals and events often offer free admission to event volunteers. Contact the organizers of your favorite event to ask about volunteer opportunities and benefits.
44. Create a family spending limit on gifts.
Discuss placing spending limits on gifts within your family and/or a system where you only purchase one gift for one person over the holidays. Not only will it relieve financial stress for your family, but it allows you to focus on what really matters during special occasions and holidays.
45. Plan gift-giving well in advance.
To go alongside spending limits, give yourself time! You’ll ensure that you’re giving the most thoughtful gifts, which usually end up being not as expensive. Besides, it will also give you the opportunity to look for sales.
46. It’s never too soon to start saving for college.
The last thing kids need is more “stuff.” Consider asking for donations to the college fund if you have enough clothes, toys, and other needs for your little ones.
47. Don’t buy cheap clothes for cheap’s sake.
There are times where it makes most sense to prioritize quality over price when purchasing clothes for the family. An inexpensive shirt or coat is a poor bargain for older family members if it wears out in less than a year, but could make sense for quickly growing children.
48.Organize a neighborhood swap meet. Here’s how it works:
gather your friends and neighbors with kids around the same age and everyone brings gently used clothing, books, and school supplies, toys, etc., and receives a ticket for each item they bring. Each ticket entitles you to one item from the swap meet. If you contribute six books, you can leave with up to six new-to-you books. If you contribute seven items of clothing, you can leave with up to seven new-to-you items of clothing. All leftover items are donated.
49. Designate one day a week a “no spend day.”
Reserve one night a week for free family and friends fun. Cook at home, and plan out free activities such as game night, watching a movie, or going to the park.
50. Brown bag your lunch.
The reason you hear this tip so much is that it works! If buying lunch at work costs $5, but making lunch at home costs only $2.50, then in a year, you could afford to create a $500 emergency fund and still have money left over.
51. Commit to eating out one fewer time each month.
Save money without sacrificing your lifestyle. Take small steps to reduce your dining budget. Start off with reducing the amount you eat out by just once per month.
52. Plan your meals in advance and stick to a list while grocery shopping.
People who do food shopping with a list, and buy little else, spend much less money than those who decide what to buy when they get to the food market. The annual savings could easily be hundreds of dollars.
53. ‘I’ll take a water, thank you.’
It’s standard in the restaurant industry to mark up the cost of alcohol by three to five times. An easy way to cut down on your restaurant spending without changing your habits too drastically is to skip the beverages, alcoholic and non-alcoholic.
54. Save time and money by doubling the recipe.
Next time you make a family favorite, double the recipe and freeze the leftovers for another day. That way you can get two meals out of one and use the ingredients more efficiently with less waste.
55. Don’t skimp on preventive healthcare.
Routine dental checkups, for example, help prevent fillings, root canals, and dental crowns – all of which are expensive and no fun.
56. Go generic.
Ask your physician if generic prescription drugs are a good option for you. Generic drugs can cost several hundred dollars less to purchase annually than brand-name drugs. And since physicians often don’t know the costs you incur for a particular drug, you often have to ask.
57. Comparison shop for prescription drugs.
Don’t just rely on the closest drugstore because the cost to you can vary significantly from pharmacy to pharmacy. Make sure to check out your local pharmacist, supermarkets, wholesale clubs, and mail-order pharmacies.
58. Purchase store brand over-the-counter medications.
Store brand medications often cost 20-40 percent less than nationally advertised brands, but are the exact same formula.
59. Comparison shop for homeowners insurance.
Before renewing your existing homeowners insurance policy each year, check out the rates of competing companies.
60. Refinance your mortgage.
Explore if you have the option to refinance your mortgage to a lower interest rate. On a 15-year $100,000 fixed-rate mortgage, lowering the rate from 7 percent to 6.5 percent can save you more than $5,000 in interest charges over the life of the loan. And, you will accumulate home equity more rapidly, thus increasing your ability to cover those pesky unexpected home repairs.
61. Audit your home energy use.
Ask your local electric or gas utility for a free or low-cost home energy audit. The audit may reveal inexpensive ways to reduce home heating and cooling costs by hundreds of dollars a year. Keep in mind that a payback period of less than three years, or even five years, usually will save you lots of money in the long-term. For more home energy savings tips, check out this blog post.
62. Weatherproof your home.
Caulk holes and cracks that let warm air escape in the winter and cold air escape in the summer. Your local hardware store has materials, and quite possibly useful advice, about inexpensively stopping unwanted heat or cooling loss.
63. Cut laundry detergent use in half.
Many laundry detergents on the market sold today are highly concentrated. Be sure to use the smallest suggested amount. Making laundry detergent is said to be relatively cheap and easy, especially if you prefer to use greener, natural products.
64. Go natural.
Speaking of making your laundry detergent, using everyday items you already have around your home to clean works for many. You’d be surprised what you can do with vinegar and lemon!
65. Lower the temperature on your water heater to 120 degrees.
For every 10 degree reduction in temperature, you can save up to 5 percent on water heating costs.
66. Ditch the paper:
Cutting out paper towels and using cloths and napkins that you can simply wash and reuse is a simple way to save.
67. Become a Coupon King or Queen.
We all know that couponing can save you lots of dough! Even simply couponing for those essential household staples like toilet paper and cleaning supplies can add up quickly (and so will your stockpile!)
68. Comparison shop for auto insurance.
Before renewing your existing auto insurance policy each year, check out the rates of competing companies. Check multiple sites for low airfares. Want to plan your dream vacation for cheap? Don’t rely on a single airline search engine to show you all inexpensive fares. Some discount carriers do not allow their flights to be listed in these third-party searches, so you need to check their websites separately. Looking for more tips, resources, and accountability to help you along your savings journey?