Are you looking for ways to control your spending and save extra money every month? Many people say they would like to save more money, but they never take action. If you’re looking to begin putting away more money and padding that savings account, I’ve put together several tips below to get your started.
According to a report published by CNBC.com, the typical American household has an average of $8,863 in a bank credit union savings account, not including retirement or investments. However, the amount varies quite a bit depending on age. Those 34 and younger without children have an average of $4,727 in savings and those with children in that age range have an average of $2,729.
Naturally, within the older demographic of 35 to 44, couples with children have an average of $10,399. What does your savings number look like? How would you like to start adding to that number, increase your savings, and rest assured that you have enough funds to cover an emergency?
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How Can I Save More Money?
You need to make money to save money. Obvious right? Well what if you’re already squeezing every penny out of your paycheck for bills and expenses? Here’s the solution: start a side hustle!
If your budget is already stretched thin, why not side hustle in your spare time to begin making extra money? Then take all that extra side hustle money and put it directly into your savings account. Every dollar counts! Even if you made just an extra $100 per month from a side hustle, this would add up to $1200 in a year. Not a bad chunk of change to stow away.
Check out this article on 25 Creative Ways to Make Extra Money Fast to get brainstorming on a new side hustle.
What is The Best Way to Save Money?
The best way to build up your savings account is to set up automatic transfers. As they say, you should “pay yourself first” out of every one of your pay checks. Simply set up the transfer to automatically put money from your checking to your savings account on a regular basis.
If you treat savings like another bill or expense and set up automatic transfers, you might not even miss that money. Start with $20 a month, then $50, then $100, whatever amount you feel comfortable with. These smaller amounts will add up over the long run. Once you get into the habit of saving, it will feel more natural.
A good rule of thumb is to save around 20% of your income every month directly into your savings account. This account can be used for things like unforeseen emergencies, unexpected bills, or saving for things like a vacation or major expense.
Best Tips on How to Save Money and Budget
The word “budget” tends to have a negative connotation. Afterall, nobody likes to be told they need to cut back on their spending. However, creating a budget can be one of the most freeing things that you can do.
Many people don’t realize where their money is going every month. They get paid every two weeks, know that they need to pay their major bills (mortgage, gas, groceries, etc.), but where does the rest go?
Creating a budget can help you understand where your money is being spent for every paycheck. One of the best tips for saving money is to create a simple budget to allocate where your funds go.
Use this tool by MoneyUnder30 to calculate how much money you should be allocating to where in your budget each month. The 50/30/20 budget model helps you break down your budget to 50% of expenses going to essentials, 30% going to discretionary spending, and 20% going directly to your savings account.
Discretionary spending is what I consider the money spot. This part of your budget covers things going out on the weekends, buying new clothes, taking a vacation, and even your morning Starbucks. Comb through your discretionary spending each month to see where you can cut back. Can you start making coffee at home? Great! Now take that extra money and move it directly to your 20% allocation for savings.
How Can I Save Money on Groceries?
Weekly shopping trips to the grocery store can add up one of the biggest expanses in anyone’s budget. So how you can start saving more money on that grocery bill?
One easy way to save more money on groceries is by buying generic brands instead of name brand foods. Many people don’t realize that often the same manufacturer is producing the same product, but companies market them under different brand names.
For example, “Generic Brand XYZ” sells quick oats and Quaker Oats sells quick oats. Hint: They’re the same oats. The difference is that people trust Quaker Oats, so they buy that brand. Just buy the generic brand! By doing so, you end up saving a hefty amount on that grocery bill every month.
Another way to save money with groceries is to cook meals in bulk. If you’re cooking chicken, veggies, and rice for dinner, go ahead and cook enough for 3 to 4 meals. Then just store those extras in reusable containers and have them for lunch or dinner the next couple days. You’ll save both time and money.
Tips on How to Save Money as a Student
It can be tough to save money as a student because most students are on a tight budget. They might receive minimal money from a part-time job, students loan/grants, or from their parents. Students need to make every penny count to pay for food, gas, and entertainment.
Many students spend too much money on frivolous things out of peer pressure. They might go out on a Friday night with friends and end up spending $30 to $40 on beers and drinks. This is one of the best places to cut back expenses in a budget. One to two nights out every weekend can easily add up to $120 to $150 a month in expenses.
Start hosting at-home or dorm room parties. Invite friends over where everyone brings some snacks and drinks. You’ll still end up hanging out with friends but can cut back on those major “weekend party” expenses.
How to Save Money and Invest
The best way to save money and invest is to invest on autopilot. Luckily, roboinvestors like Betterment help you do just that. Once you set-up your account with Betterment, you can schedule auto-deposits either into a savings account or an investing account. Betterment will then automatically invest this money into stocks and bonds for you.
Remember to “pay yourself first.” By setting up these auto payments, you take the hassle out of investing, and it will become like second nature. Log-in every few months to your Betterment account and see how your investments are growing.
Ready for more money-saving tips? Check out these ideas below and see how you can start saving more money by cutting back on unnecessary expenses.
1 Quit Paying Unneeded Subscriptions
Remember when you signed up for that “free trial” online a few months ago and ended up putting in your credit card info? Did you remember to cancel it after the “free trial” period ended? You would be surprised how many people forget to cancel that “free trial” and end up paying for unwanted subscriptions without even realizing it! (me included)
Introducing the True Bill App. According to True Bill, 84% of people have subscriptions they’re forgotten about. They can help you identify those unwanted subscriptions and actually help you cancel them. This can save you a ton of money! They can also help you see where your money is going and even lower your current bills by negotiating with companies.
2 Get Cash Back When You Shop
Would you like to get automatic cash back every time you shop online? Then check out Rakuten which gives you cash back at over 2500+ stores and online marketplaces, including electronics, clothing, games, and sporting goods.
They also have great deals where you can earn cash back when you book travel. At the time of this writing, Booking.com is offering 2% cash back, Travelocity is giving 5% cash back, and Holiday Inn 3% cash back. That’s an automatic discount every time you travel just for booking through Rakuten.
3 Create a Budget
Ok, Ok, I know that nobody likes to talk about making a budget. It’s easier just to cash that paycheck, pay your bills, go out on the weekends, and hope it all works out!
Trust me, I used to be this way. I hated the idea of creating a budget, but budgeting can help you save more money in the long run. Most of us spend too much money on frivolous things, and we don’t even realize it.
One of the smartest budget models around is the 50/30/20 budget. Allocate 50% of your after-tax income every month to essentials, like rent/mortgage, car payments, gas, food, and insurance. The 30% is for “discretionary spending” which could include going out on the weekends, booking travel, or buying clothes. The 20% covers what you should be putting into savings each month.
Follow this 50/30/20 budget, and it will help you get better control over your finances and even save a bit of extra money every month. For example, if you realize your discretionary spending is more like 40% instead of 30%, start figuring out ways that you can cut back to ensure at least 20% is going to savings every month.
4 Cut Cable and Start Streaming
Is it just me or does it seem like cable keeps getting more and more expensive every month? Well, if you’re fed up with an astronomical cable expense, you’re not alone. More and more people are cutting the cord on cable and turning to more economic options, like streaming with Hulu and Netflix.
According to The Simple Dollar, the typical person who cuts cable can save over $1200+ per year. That’s a major expense! Hulu’s premium service costs $11.99 per month (or $143.88 per year) and their Basic + Live TV service costs $44.99 per month (or $539.88 per year). Even if you opted for the Live TV service where you can watch 51 channels live, you would be saving over 50% of normal cable fees.
5 Carpool or Take Public Transportation
Have you ever considered getting together with your office mates to carpool your way to work? What about navigating public transportation? It’s no secret that gasoline and transportation costs make up a large chunk of many people’s budgets.
According to the American Public Transport Association, most Americans can save over $10,000 just by taking public transportation. In addition to the savings, you’re also making a positive impact on the environment. If you jump in with both feet and give up your car, you end up saving on more than just gas. You can save on that car payment, maintenance costs, and car insurance, too.
6 Cook Meals at Home
How often do you cook your dinners at home? Are you more of a “take out” person? It’s no doubt that it’s much easier to pull through a drive-thru than taking the time to cook a meal every night.
If you’re someone who likes to eat out at a restaurant several nights a week, you know firsthand that the tab can grow in length pretty quickly. It’s all too tempting to start adding on an appetizer, a couple drinks, and desert.
According to MyDomaine.com, by cooking at home rather than grabbing a restaurant prepared meal, you can save an average of $16 per meal. That means you can save an average of $832 per year just by preparing your meals at home. In addition, you tend to eat much healthier when you cook at home since you can control what goes into your food.
7 Stop Drinking Alcohol
I have a confession: I love wine. OK, I said it! But my wine habit and my budget do not get along.
Alcohol is easily one of the biggest expenses to cut out your budget. It doesn’t seem like much when you buy that $12 bottle of wine 2 to 3 nights a week. After all, you should treat yourself right? Of course you should treat yourself from time to time; however $35 in wine per week adds up to $140 in frivolous expenses per month. Or over $1400+ per year.
I haven’t even mentioned weekends out with friends with a hefty bar tab. Round of shots anyone? Just say no! At least cut back on that alcohol habit, and you’ve suddenly discovered a new chunk of change to move into your savings account.
8 Analyze Your Checking Account with a Sharpe
Do you know where all your money goes each month? Every last dollar? How much do you think you spend on groceries? Gas? Weekend nights out? You might be surprised where your money is being spent after you take some time to analyze your monthly statement.
Here’s your homework: print out last month’s bank statement. Then, go through the statement and take a red colored highlighter to all grocery expenses; a blue colored highlighter for gas; yellow colored highlighter for essential bills like rent; and pink colored highlighter for discretionary spending like clothes shopping and entertainment.
Finally, add up all the colors so you have separate totals at the bottom. Do any of the colored categories seem higher than normal? This might be a red flag area that you can analyze further and see where you can cut down the spending.
9 Rent a Room in Your House
If you have a spare bedroom in your house, you could easily turn this into cash by renting it out on Airbnb. Or, if you have the ability to stay with family or a friend for a few nights, you could rent out your entire house / condo.
While some hosts make crazy amounts like over $10,000 a month through the platform, Airbnb shows data that the average host has earning potential of around $1500 per month. That’s not a small chunk of change to laugh at. You will need to work on building up an optimized listing and get raving 5-star reviews, but this work can easily turn into a great side hustle that equals more money in your pocket.
If you’re new to Airbnb, click here to check out this guide on how to become a host.
10 Use Turo To Rent Your Car
Just like you can rent your house out on Airbnb, now you can rent your car on Turo. After you list your car on the platform, Turo will send interested members your way who want to rent your car. Drivers can rent your car short-term while you enjoy the perks of extra cash in your pocket.
If you have a car sitting around that you aren’t using, why not turn it into extra money? The average owner who lists their car on Turo can make around $700 per month.
11 Improve Your Credit
When thinking about ways to save money, it’s not a bad idea to look at your credit. Those with bad to fair credit end up paying exponentially more on interest than those with good to excellent credit ratings.
Why not work on improving your credit and bumping yourself up into the next credit category? Once you improve your credit score, you can look into refinancing your car loan or mortgage for a better interest rate. This can help you save quite a bit of money in the long-term.
Do you know what your credit score is? Don’t worry, a lot of people don’t. I recommend checking out Credit Sesame where you can get your credit score for free and see a better picture of your overall credit health.
12 Buy Generic Grocery Items
We’ve already talked about how groceries can be a major expense. Trust me, I know. I’m one of those people who likes to go to the grocery store almost every day. I always end up buying a bunch of excess junk I don’t really need.
Would you like to start saving more money on your grocery bill? It’s time to consider buying generic. I know, I know, it’s not sexy to buy generic, but 9 times out of 10, generic is the same product as the brand name. Just swallow your pride and buy the generic brand. Your checking account will thank you!
Another money-saving tip for your grocery trip is only shopping once per week. When you shop multiple times a week, it’s inevitable that you end up buying more items and spending more money. If you prepare a shopping list ahead of time and only shop once every week, you can consolidate your grocery shopping and better control your spending.
For example, if I go to the grocery every day, I always end up spending around $25. But, if I prepare a list ahead of time and shop only once per week, I will probably spend around $100 because I shop smarter. That’s the difference of $75 saved every week on my grocery bill.
Are you ready to start saving more money?
Most people are interested in saving more money, but you have to take action. It’s time to take control of your spending, get a better grasp on where your money is going every month, and maybe even create a budget. Apply some of these money saving tips, and you’ll be padding that savings account in no time.
What kind of tips do you have for those looking to save money? Do you have a budget? I’d love to hear your thoughts and money-saving tips in the comments below!