Photo by Michael Longmire on Unsplash
Are you trying to be
better about saving money? You’ve heard the same advice, time and time again:
spend less. But the question now is, how?
“Spend less” is vague, and you have expenses to pay that you can’t just
eliminate, as much as you’d like to. Here are seven practical ways to save
money, and not all of them entail making sacrifices:
Save in
Small Increments
Perhaps you struggle
with saving money because you always forget or don’t know how much to put
aside. When your paycheck comes in, do you immediately put a certain percentage
in a different account that you don’t touch regularly, or do you let it all sit
in one account, waiting to be spent?
Start by saving small
increments. $2 to $5 will add up over time if you do it frequently enough.
Instead of logging into your online banking account every time you want to add
a few dollars into your savings, you can use third-party apps that make small
transactions easy. For example, you can use Earnin’s Tip Yourself feature to save a small amount of cash, and assign tipping yourself to a positive behavior (such as working out), so
you remember to do it often.
Snowball
Your Debt
A significant part of
your money-saving plan should be paying off debt. Identifying where to start
eliminating debt can be just as tricky as figuring out how to save more money,
so experts suggest employing the “snowball” technique. As a snowball rolls down
a hill, it grows larger as it accumulates snow and momentum. You can apply the
same concept to your debt and begin with the smallest amounts.
It sounds
counterintuitive, but by paying off your $500 credit card debt before tackling your $5,000 loan, you glean a sense
of satisfaction and practice better financial habits. If you pay off $500 of
your loan, you still have two debts and two interest rates. Knock one out of
the way by starting with the smaller debt and build enough momentum to pay off
the other.
Audit Your
Expenses — Then Trim Them
Conduct a thorough
audit of your expenses to see where your problems lie (besides not earning
enough money, of course). What are the payments you cannot avoid, and what are
the costs you could do without or somehow reduce? We’re not suggesting you cut
out leisure entirely — recreational activities and entertainment are important
to everyone’s mental health — but if you’re spending money on something you
don’t use or that doesn’t bring you happiness, put that money toward your
savings instead.
Cancel
Monthly Subscriptions
While subscriptions
are convenient because you don’t have to think about paying the bill each
month, they can be a sneaky expense that drains your account for no reason. If
you watch a Netflix show in June and August, why pay $15 for July? Don’t be
afraid to cancel subscriptions, even if you know you’ll resume using the
service in the future.
Be wary of year-long
subscriptions, too. Don’t bother paying the fee for Amazon Prime if you’re only
going to order something a few times per year.
Forsake
Brand-Name Goods
The appeal of brand
names is enticing, but it’s often manufactured. Generic goods can be just as
high-quality as brand-name varieties. Omitting the price difference from your
monthly expenses can result in significant savings. If a designer's shirt costs
$100 but is hardly better than another of the same style that costs $20, go
with the latter and don’t pay for novelty.
However, some brands
do use higher-quality materials and put more effort into their products. It’s
good to invest in longevity, so you aren’t buying the same product over and over
again, so research what companies you buy from and whether the extra cost is
worth it.
Call and
Negotiate With Your Providers
It might not have
crossed your mind to call your various creditors and providers (such as your
credit issuer, mortgage lender, health insurance provider, internet provider,
etc.) and ask them if they are willing to reduce your bill or interest rates.
Why not? What they charge you isn’t fixed, and it never hurts to ask. The worst
thing they can do is say no, so pick up the phone (you may have to call around
to find the right person) and negotiate lower interest rates and fees. Hopefully, they want to keep
you as a customer enough to grant your request.
Convert
Money to Time
Saving more and
spending less requires thinking about money differently. When you see an item
you want to buy but aren’t sure whether you can afford it or not, try thinking
about the price in how long it would take to earn that money back. For example,
if you make $17 an hour and want to purchase a new coat that costs $65, that’s
almost four hours' worth in wages. Changing your perspective will help you
align your spending habits with your budget more effectively.
Your financial health
will be in a much better place if you know how to save more money. You may have
to make some lifestyle changes, but there are other practical ways to reduce
your expenses and pocket what you earn.
This article originally appeared on Earnin.
Please note, the
material collected in this blog is for informational purposes only and is not
intended to be relied upon as or construed as advice regarding any specific
circumstances. Nor is it an endorsement of any organization or Services.
