We all want to have enough money for our future, however, saving is easier said than done. Having too many expenses can leave you barely able to save a fraction of your income. Not saving enough money can cause people to fall into debt, and it’s difficult to get out of when you have problems with saving money in the first place. To avoid having financial problems in the future, continue reading to learn more about all the different ways to save money.
- Set a goal for your money
Setting a goal is important when you want to save money. Why do you want to save? Common reasons include retirement, children’s education, and buying a new house. Some people save for a short period to pay for vacations or a car’s down payment. Having a goal will keep you motivated to save despite the struggles that come with it.
- Set an emergency fund
Aside from your expenses, people should allocate money to savings and an emergency fund. If you don’t know what an emergency fund is, it is where you get money from when a sudden emergency arises. Some choose to get their emergency fund from their savings, but it’s better to have it separated so that when there’s an emergency, your savings won’t have to go back to zero. Once you have an ample emergency fund, preferably 3-6 months of your normal monthly living expenses, and you don’t have any high-interest debt, then you can start aggressively investing your savings.
After removing the money for your savings and emergency fund, you can now budget the rest of your income for your expenses. List everything you spend money on each month: bills, transportation, food, rent, weekly hang-out expenses, etc. Also consider expenses that don’t occur monthly, like annual home maintenance and holiday gifts. Once you have listed all expenses, categorize them based on importance then start making a budget. Compare how much your income is with how much your expenses are. If your expenses are too much, then consider removing some of the least important.
- Track your expenses
Make it a habit to record all your expenses. Seeing them all in one list can help you avoid overspending as you will be more watchful with what you spend your money on. But, you have to dedicate yourself to writing each expense, even those that cost only a penny, for this to be effective. With this, you’ll get to see your spending pattern and it will be much easier to improve it if needed.
For your convenience, download expense tracking apps on Play Store (Android) or App Store (iOS) so you can easily record your outgoing money with just a few simple taps on your smartphone.
- Avoid eating out
Some people are guilty of eating out or ordering food whenever they don’t have time to prepare their own or whenever they’re feeling lazy to do so. Doing this instead of cooking at home can really add a lot to your expenses. To avoid this, you can plan your meals ahead of time. Also, look for easy meals you can cook so it won’t take much of your time.
- Break free from instant gratification
Instant gratification means having to get what you want instantly and without delay. If you want it, you will get it, not tomorrow or the day after that, but right now. Delaying a large purchase for at least 30 days can help you save money especially when you realize that after a month, you’re not as much as into it as you thought you were.
- Quit expensive addictions
Quitting is difficult. Nobody says it’s easy. But if you really want to save money, quitting your addiction can greatly help. If you spend $12 for a pack of cigarettes or $27 for a bottle of vodka, how much are you spending in an entire month? Gradually cutting down your vices can also gradually increase your savings.
- Avoid getting into debt
When buying things that cost a huge amount of money, such as a house or a car, people tend to take loans to slowly pay them off instead of paying upfront. This can cost you more money over time because of the added interest cost. If it’s unavoidable to take loans, making a big down payment can help lower your monthly cost.
- Always double check the receipt
When making payments, whether in person or online, always double check the receipt and make sure you only pay for what you purchased. Intentional or unintentional, overbilling happens often so you have to be alert at all times. Also, double check the change before you leave a store’s premises to make sure that you have the right amount.
- Reduce your energy consumption
There are plenty of ways to reduce energy consumption. By doing so, not only will you be able to help reduce your bill, but you will also do Mother Nature a favor. Win-win, right? Try doing simple steps for now, such as:
- Wash a full load and consider drying on a clothesline instead of using the dryer.
- It’s a bit pricier than incandescent bulbs but switching to LED lights or compact fluorescent bulbs (CFLs) can save you more money over time as they are more energy efficient and they last longer. You must also remember to always turn off lights that are not in use.
- Make sure the house is insulated to avoid hot air from coming in during summer when the air conditioner is on and hot air going out during winter when the heater is on.
- Use energy efficient appliances instead of older models that consume too much electricity. Buying new appliances may sound more expensive but you’ll save more in the long run.
- Choose a more economical means of transportation
The average annual cost of owning a car based on 18,000 km of driving per year is $10,456 (Source: TravelSmart).
Aside from the large amount of money you’d have to pay to buy a car, you also have to consider its depreciating value in addition to paying for maintenance and repair, fuel, licensing fees, and car insurance.
There are better ways to travel to work on a daily basis. Sure, it might mean that you’ll have to wake up earlier than you do when you are using your own car, but you’ll reap what you sow in the future, so hang in there! Aside from utilizing public transportation, if your work is not that far, you could try biking. However, if having a car is necessary, try carpooling companies or do it with your workmates. And if you only use a car occasionally, consider car sharing.
- Make use of your piggy bank
It’s easy to lose track of money when it’s in the form of loose change. For one, coins are much easier to spend because you just want to get rid of them. Second, they are easy to misplace. Carrying loose change is often hated by people because it is heavy and they’d rather use credit or debit cards for payments. But collecting these coins can help you accumulate money you could’ve lost. Saving 5¢ a day can amount to $182.50 in a year. So, we suggest you start to make use of your piggy bank.
- Quit using credit cards
Despite its notoriety for putting people into debt, credit cards still provide a decent number of benefits for its users. However, if you’re easily tempted to buy stuff you don’t need especially when it’s on sale, it’s best to quit using your credit card. You don’t have to cancel your credit cards because you might still need them whenever traveling or in emergencies, however, you may choose to leave them in a place you don’t often see at home, instead of carrying them with you every time you go out. You can also designate a trusted person to hold onto them for you.
- Practice smart buying
Buying the cheapest product in the market isn’t always a good thing. Cheap products with low quality can cost you more in the long run as you’ll need to repeatedly buy a replacement. On the other hand, buying expensive things with excessive features that you don’t need isn’t smart either. You should try to pick something in the middle—the best quality you can find for your budget. That’s why you should do some research and check reviews before you buy.
Consider asking the following questions when buying products:
- Is this product within my budget?
Your budget shouldn’t be the thing adjusting when you make your purchase. It needs to be the other way around. For example, if you have a budget of $1,200 for an energy efficient refrigerator, but you saw this really cool smart fridge (no pun intended) that plays music through a built-in speaker via Bluetooth connectivity, would you choose to sacrifice your savings for an extra feature you don’t really need? You should not.
- Does the product have good quality?
Many mid-priced products have good quality that is on par with high-priced branded products. Check the quality of the product and see if it can last you a long time. Buying from reliable sources is another factor that assures a product’s quality.
- Can I return this if it proves to be low-quality?
Check the return policy. When the return policy isn’t openly discussed, maybe it’s because there isn’t one. Ask the seller about it.
- Choose the best time to buy gifts
People who want to save money when shopping for holiday gifts either shop year-round or they shop a day or two later. You can avoid paying the original price of a product by taking advantage of huge discounts on Boxing Day, Black Friday or any other big sale year-round.
- Get rid of stuff you don’t need
Take a look at your closet or anywhere inside your home. Are there things you rarely use? Maybe some clothes that don’t fit anymore, books you stopped reading, antique furniture you don’t use, and other things like that? Instead of throwing them away or ignoring them as they take up precious space in your home, there are some ways these things can be of benefit to you. Choose from the following options:
- Online: Selling your stuff online is much easier nowadays. Aside from eBay and Craigslist, you can also sell your items on Facebook and Instagram.
- Consignment shops: This kind of shop will give you a percentage to how much they can sell your things for so that you both profit.
- Garage sale: Why go far when you can sell from your garage? Get the word out by telling your neighbors about it, posting street signs, posting on community forums, or through utilizing social media.
- Donate: When you donate your things, the charity can give you a receipt reflecting your donation’s fair market value. You may be able to use this to claim a tax credit the next time you file a return.
- Buy used items
Aside from selling used items, you can also save money when you buy them. There’s no point in paying full price when a product’s value quickly depreciates or if you are only going to use it for a short time. Baby clothes, cars, books, and household appliances are the things best to be bought used rather than new.
Although a lot of used items are found online, it’s best to buy in physical stores so you can thoroughly check the quality and avoid being scammed. It’s also advisable to do research about how much you should pay for a product. Remember, the point of buying used items is to save money. It wouldn’t make sense to pay almost the same price as for a new one.
- DIY gifts
Instead of buying expensive gifts, try some DIY alternatives. Personalized gifts are more touching because you know that a person made it while they had you in mind. To get some DIY gift ideas, check out Pinterest.
- Shop in the cheapest grocery store
If there are a number of grocery stores near your area, it’s best to check out which one offers the cheapest price. You can find this out by rotating stores as you buy your weekly or monthly essentials. Keep the receipts and compare the prices. You can also lower your grocery bill by planning your meals based on what’s on sale at the store.
- Buy generic brands
When it comes to shopping, do you tend to go for branded products? Try buying generic or store brand as they are much cheaper and often just as good. This is especially applicable to buying medicine. If you don’t have any allergies with a generic medicine’s ingredients, then it’s much wiser to buy those since both are regulated by Health Canada anyway.
- Pack your lunch
Think of how much money you spend on eating out for lunch every day at work. Packing your lunch will help you save money. It won’t take up a lot of your time in the morning if you just choose to make a bigger batch of your breakfast instead of cooking a separate meal for lunch (but you could do that too). This way, you won’t only save more, you will also be able to eat healthier.
- Check your car
Owning a car is expensive. But if you already own one and you’re not willing to give it up, then improving your mileage can lessen the upkeep. Besides, this can also increase your car’s longevity. Here are some tips you should follow:
– Change your air filter once a year.
– Change your oil and oil filter according to the manufacturer’s manual.
– Ensure your car has the appropriate tire pressure.
– Remove the roof deck when not in use.
– Use the octane gas indicated in the car’s manual.
– Replace your spark plugs when you reach more than 30,000 miles. Source: CarBibles
- Schedule maintenance each month
Your home, whether it’s owned or rented, deserves to be taken care of. Not only because a huge chunk of your expenses is spent on paying for it and the utilities, but also because scheduling maintenance for your home and your appliances will ensure that everything is in its top condition. This will make your home and appliances last longer and prevent unexpected damages due to wear and tear.
- Buy in bulk
Many of the things you buy in the grocery store can be bought in bulk. You have to just make sure that the cost per item is lower than what you usually pay for a single purchase. Calculate how much each would cost and compare prices. For example, if you usually buy a 200mL shampoo for $2, if buying this shampoo in bulk will cost $14 for a two-1L shampoo set, then each 1L shampoo will only cost $7. You are able to save $3 for each 1L shampoo compared to buying five 200mL shampoos which will sum up to $10 for a liter.
Single purchase: 200mL x 5 = 1L; $2 x 5 = $10 for 1L
Bulk buy: $14 / 2 = $7 for 1L
To help lower the cost some more, you can also use coupons or wait for a sale.
Just remember, it’s important to have the proper storage when buying in bulk. It’s also not advisable to buy perishables in bulk unless you plan to use them within a day or two. Here are some products best bought in bulk:
– Dry rice
– Trash bags
– Dishwashing detergent
– Dry pasta
– Laundry detergent
– Toilet paper
– Dry beans
– Gift cards
– Office supplies
– Light bulbs
- Save first, spend later
It is difficult to save money when it is your last priority. Saving money should be the first thing you do the moment you receive your income. You don’t have to allocate a huge sum of money to your savings account; 10-15% is enough. Consider your expenses as you choose how much percent to save. It’s better to get committed to saving 10% each month rather than have a hard time being consistent in saving 15%.
For example, you earn $3,600 a month, remove $360 right away if you choose to save 10% and put it in your savings account.
- Talk to your loved ones
Talk to your loved ones or people you’re particularly close with. Tell them you’re trying to save money and ask them to help you out by giving you insights or pieces of advice.
If you’re having a problem with avoiding expensive purchases, it will also help if you ask them to help stop you from making them. This is mostly applicable to people you personally spend time with.
Frugality is a common trait found in wealthy people. Many wealthy people weren’t born rich. Like you, they had to struggle to get to where they are now. Living life within or even below your means can be uncomfortable, but don’t give up. Remember, someday you’ll reap what you sow and all of the efforts will be worth it.