For many, the idea of saving can be overwhelming. With so many expenses to pay for, such as mortgage payments, car insurance, student loans, food, and much more, setting aside unspent money can seem impossible. However, there are plenty of ways you can start growing your savings, even if it only means setting aside a few bucks a week.
When it comes to saving, there are different areas you can cut back, whether that’s saving money on your living situation or saving money on day to day expenses. Below, we’ll go over 12 easy ways to save money for your next big purchase, retirement, or anything you have your sights set on. Read through for all of our tips on how to save money, or jump to different money-saving tips using the links below.
- What is the importance of saving?
- Save money on your home
- Save money on expenses
- Save money on shopping
- Save money long term
- How to start saving money
What is the importance of saving?
Saving is important for one main reason: protecting yourself in the event of unexpected financial hardship. If there’s one thing about life, it’s that it’s unpredictable, which means financial emergencies can arise at any time. With adequate savings, you can ensure you’ll be able to continue paying for your regular expenses, such as food and housing, without large expenses derailing your finances. It’s recommended to have at least six months’ worth of expenses stored in your emergency fund to help protect you in the event of a job loss, large medical bill, or any other large expense.
Creating an emergency fund to protect you from financial emergencies isn’t the only reason saving is important. There are a few large purchases you’re going to make throughout life, such as a home and a car, that typically require a large down payment. In addition to these expenses, saving for retirement is just as important. By saving for retirement as early as possible, you’ll be able to grow your nest egg and enjoy your retirement years as you envisioned.
Save money on your home
There are plenty of ways homebuyers can save on buying a home, and homeowners can save on home expenses. Depending on your stage of homeownership, consider these money-saving tips:
1. Do your research
Before signing on the dotted line, make sure to do your research when buying a home. This means researching different mortgage lenders to get the best quote, home prices in the area you’re looking to buy, and how much certain renovations will cost in your new home. You should also consider researching different local real estate agents to find one who will work with your best interests in mind and negotiate a price that falls within your budget.
2. Rent out a bedroom
Are you and your partner empty nesters? If you have an extra bedroom collecting dust, polish it up and consider renting out to someone looking for a place to stay. There are plenty of home rental apps you can take advantage of, such as Airbnb and Vrbo, which allow you to list a spare room and even a couch for travelers or longer-term tenants. Then, you can put the money you earn through renting toward your mortgage and utility payments.
3. Go eco-friendly
Owning a home can cost a lot of money. Not only do you have to make monthly mortgage payments, but you also have to stay on top of utilities, such as water, electricity, and gas. While your mortgage payments will typically remain the same throughout the course of the contract, there are ways you can save on your utilities.
Transitioning to more eco-friendly appliances and habits can help reduce your utility bills significantly. Some measures you can take include:
- Switch your ceiling fan to rotate clockwise during the summer to push the breeze throughout the room and counterclockwise during the winter to push heat upward toward the ceiling and walls.
- Replace incandescent light bulbs with LED light bulbs, which use 75 percent less energy than their counterparts.
- Invest in smart appliances, such as a smart fridge, dishwasher, washing machine, and dryer, which are built to use less energy and be more efficient.
- Create a household budget to track your spending habits and save money on various home expenses.
These are just some of the ways you can cut back on home expenses and put that extra money toward your savings or other necessary expenses.
Save money on expenses
Throughout life, there are just some expenses that are unavoidable and not fun to pay for. However, this doesn’t mean you can’t reduce the cost of your expenses each month. Take a look at these money-saving tips to cut costs on everyday expenses.
4. Negotiate your bills
The best money-saving tricks allow you to avoid sacrificing something. One way to do that is by negotiating for a lower rate on your internet, cell phone, cable, gym membership, salary, and more.
Make a list of all the bills you pay regularly and set aside an afternoon to give those companies a call. Ask if there are new promotions available or anything you can do to save money. Don’t hesitate to bring up a competitor’s offer because they might be able to match it.
Negotiating your bills is hard work, so this isn’t exactly free money. It takes time to wait on hold, and convincing a customer service representative to offer you a better deal can be draining. But if it works out, you could end up saving hundreds over the course of a year.
Be polite. Many reps are capable of giving you a discount but under no obligation to do so. How you treat them could directly impact the discount they offer.
If playing nice doesn’t work, ask to speak to the retention department in charge of keeping customers from leaving. They might have the ability to provide better deals than a regular customer service rep.
5. Refinance your loans
If you have a mortgage, student loans, personal loans, or auto loans, refinancing could be the easiest way to save big. Refinancing means selling your loan to a new lender who will give you a lower rate or better monthly terms.
Create a list with all your monthly loan payments and rank them from highest interest rate to lowest. Then, look online to see what the current interest rates are for those loans. If you’re paying 7% interest on an auto loan and find that most banks now have 4% rates, you’ll know it’s time to refinance.
Before you refinance, make sure you’re signing up for a lower interest rate with the same length you had before. If you have student loans with five years left, be careful about refinancing to a 10-year term. You might end up paying more interest overall because the term has doubled. Keep making the same monthly payments you were before, and you’ll repay your loan faster.
You can’t refinance credit card debt, but you can transfer the balance to a card with 0% interest. These cards will usually offer 0% APR for a certain length of time, many for more than 12 months. You’ll save on interest if you repay the balance completely before the promo expires.
Save money on shopping
Whether you’re at the mall or grocery store, swiping your credit card without thinking can be pretty easy, especially when clever marketing tactics get you to buy more than you anticipated. Next time you go shopping, keep these money-saving shopping tips in mind.
6. Look for hidden discounts
When I interned in New York right after college, the company I worked for had group discounts at local museums and attractions. You could show your employee ID and receive a percentage off at some of the city’s most popular spots.
Ask your HR department if there are any outside discounts available to employees. Big companies are more likely to offer this than small firms, but it never hurts to ask.
Health insurance companies are known to offer special discounts as well. For example, mine reimburses customers $20 a month if they provide proof of a gym membership. I also once scored a $25 gift card from my insurance company by taking a wellness survey and pledging not to smoke.
7. Delete your credit card information from your browser
Shopping online has made everything more convenient. If I’m running out of dog food, I can get it delivered from Amazon instead of driving to the nearest pet store. If I need a new dress for a wedding, I can buy one online instead of going to the mall.
But the convenience of internet shopping comes with a price. A 2018 poll from CreditCards.com found that 44% of people spontaneously bought something online in the last three months. More than 20% of millennials said they’d made an impulse purchase within the last week.
If overspending is a problem for you, convenience may actually be the enemy. Think of it like going on a diet – if you avoid keeping junk food in the house, you’ll be much less likely to reach for it when you get hungry.
One way to prevent impulse buys is to delete any autosaved credit card information from your internet browser. You can usually do this in the settings. Also, turn off any “one-click ordering” buttons in your account.
You can also institute a self-imposed 24-hour rule before buying anything non-essential online. If you let an item sit in the virtual shopping cart for a day, you might reconsider the purchase. Some companies will even email an extra discount code if you leave something sitting in your cart for a few days.
8. Trim your subscriptions
Along with the advent of online shopping came the arrival of subscription services. These can range from companies that send makeup and beauty samples to boxes of healthy snacks.
Like online shopping, it’s easy to sign up for a subscription. Most of them are cheap, so it might not seem like a big deal to add another $10 monthly expense to the budget. A 2018 survey found that people spent $237.33 on subscription services each month. The worst part? Customers underestimated how much they spent on these products by more than 50%.
Write down which subscriptions you have and how much they cost. Then, consider how many you actually like. Do you listen to Spotify enough to pay for it? Do you have an expensive gym membership that you only use once a month? Do you enjoy your Blue Apron meals or dread making them?
Most of these services are easy to pause or cancel, so you won’t lose a deposit or any kind of collateral. Do this for a month or two and see what you miss – and what you barely notice.
9. Resist spaving
Spaving? Yes, you read that right. Spaving is a term that describes when shoppers spend more money in an effort to boost their savings. There are plenty of ways where you may think you’re saving, but you’re actually spending more. Some common scenarios include:
- Adding extra items to your shopping cart to qualify for free shipping
- Buying items in bulk when you most likely won’t use everything
- Purchasing items just because you have a coupon
Next time you head out to the store, think carefully about what you’re buying and whether you truly need it, and always try to track your spending to ensure you’re reaching your financial goals.
Save money long term
While you may be saving for immediate purchases, such as a vacation or new car, it’s important to think later down the road. Planning for the future is essential when it comes to saving. Learning how to save long-term can set you up for success and teach you how to think about your spending habits on a daily basis.
10. Create a budget
Creating a budget should be one of the first actions you take on your journey to saving money. With a budget in place, you’ll be able to track your expenses and understand where your money is going. At Mint, you can use our free budgeting calculator, which allows you to input your monthly income, monthly expenses, and monthly savings to get a clearer picture of your monthly finances.
In addition to using a budgeting calculator, you can try using budgeting methods to save money. One of the most popular budgeting methods is the 50/30/20 rule, which goes as follows:
- 50 percent of your budget goes toward essentials, such as mortgage payments, food, and utilities
- 30 percent of your budget goes toward wants, such as dining out, clothing, and entertainment
- 20 percent of your budget goes toward savings, such as retirement accounts and debt payments
By using a budgeting method, you can start making more conscious choices when it comes time to make a purchase.
11. Reimagine your lifestyle
Your current lifestyle might be the culprit that’s preventing you from saving money. Do you go out to the bars and clubs every weekend and buy expensive drinks? Is ordering take-out an every night habit? Do you have a taste for the finer things in life, even when your income can’t support it? If so, it might be time to reimagine your lifestyle and cut spending.
While saving money shouldn’t take away from your happiness, being aware of what you spend your money on can help you make thoughtful spending decisions. For example, rather than sitting home on a Friday night wishing you were out with friends because you’re trying to save money on drinks, create drinks beforehand. Prior to hitting up the club, gather a few friends, and make your own specialty cocktails at home. This way, you can save money while still enjoying yourself.
You can also try living a minimalist lifestyle to save money. While switching can be hard at first, living minimally can help you save. Rather than having a closet full of clothes, try creating a capsule wardrobe with a few staple pieces that can be mixed and matched for dozens of outfits. Or, cut meaningless expenses, such as expensive subscriptions or little knick-knacks you find at thrift stores or home furnishing stores.
12. Keep retirement in mind
Saving long-term means retirement should always be in mind. The last thing you want is to reach retirement and realize you don’t have enough funds to support your retirement dreams. One general saving tip for retirement is to start as early as possible, even if you can only afford small payments. This is because retirement vehicles, such as 401(k) accounts and IRAs, will compound interest, which grows your money over time.
How to start saving money
The idea of saving money doesn’t always sound glamorous. However, there are plenty of easy ways to save money that can help you reach your financial goals without taking away from the simple pleasures in life. With these money-saving tips, from renting out a bedroom to cutting your subscriptions, you can be on your way to meeting your savings goals. At Mint, we offer a wide range of money-saving tools, from our free budgeting app to various budgeting calculators, that can help you save money.