If you’re like most people, you’d be happy to have more money, either to pay off debt, invest, or spend on items and experiences you love. I’m not a penny pincher but I do like easy, practical tips to save money and increase my net worth. Here are some money hacks to save you a lot and help you slowly achieve your financial dreams.
1. Hide your money…from yourself.
Begin delegating a portion of your paycheck, even if it’s a very small amount, toward savings. Have this amount automatically transferred from your paycheck to an account you can’t conveniently access, so the money never enters your checking account and you are less likely to spend it. Tricking yourself into thinking you have less per paycheck to spend will help you save.
2. Forget about late fees.
Automate your bills whenever possible. This will help you avoid those dreaded late fees.
3. Tell your raise where to go.
When you get an increase in pay at your job, automatically have that extra amount per pay period go into savings. You won’t miss it if you never see it in your checking account in the first place.
4. Learn the language of money.
401K? Roth IRA? ROI? Cash flow? Net worth? If you want to understand savings, learn the language of money. Having an understanding of basic financial terms will help increase your sense…and cents.
5. Save for an emergency fund.
Plan for the unexpected. Year after year, there will be unplanned events that cost money, ranging from urgent home repairs to unforeseen medical expenses. Having money set aside can help greatly when those surprises occur.
6. Build multiple streams of income.
Gradually building multiple streams of income will give you access to more money to save.
7. Track your spending.
Record every dollar you spend for one month. Analyze your findings and determine if you can cut back some unnecessary spending in order to boost your savings.
8. Have an accountability partner.
Find a friend on a similar mission to save money, and hold each other accountable. Having someone to encourage you along the way can make a big difference in attaining your savings goals.
9. Forget about the Joneses.
Quit comparing yourself to others. First of all, you don’t know other people’s financial situations; just because your coworker bought a new vehicle doesn’t necessarily mean he had the money to buy it. Secondly, trying to uphold an image of wealth may cause you to spend way more than you should, and therefore actually decrease your long-term savings. Focus on yourself and your situation, and try to do better than you did last year.
10. Don’t buy what you can’t afford.
Just because a store is offering an item for “% money down for 3 years” doesn’t mean you should buy it. And spending money on items for sale is still spending money.
11. Use cash when shopping.
Although some people use credit cards, diligently pay off the balance each month, and rack up airline miles, many of us are not as disciplined. For many of us, carrying cash when shopping is a smarter choice. It’s harder to part with cash; seeing money physically leave your hands is more difficult than swiping a card. Research shows people spend more when they buy using credit cards.
12. Be mindful of the company you keep.
Jim Rohn, a businessman, is quoted as saying, “You are the average of the 5 people you spend the most time with.” Do you feel pressured by your friends to spend recklessly? If your goal is truly to save money, hang out with like-minded people.
13. Ask questions.
You thought an item was on sale, but it didn’t ring up on clearance in the checkout aisle? Ask. Can’t remember the balance you need to keep in your checking account to receive free checks? Ask. Not sure you understand your retirement plan at work? Ask. Many people are scared to ask financial questions, but taking an active interest in your finances is essential for you to take control of your money.
14. Embrace second-hand items.
If an item isn’t going to make you money, it might be worth purchasing it second-hand. If you’re crafty, many items can be refurbished for minimal cost. And embracing hand-me-downs for kids’ clothing can save you thousands of dollars.
15. Study yourself.
Do you overspend when you shop online? Book extravagant vacations when stressed? Are you a sucker for a latte every morning? It’s impossible to change your habits if you don’t know what they are. Studying your habits and what triggers you to spend money in the first place is a fundamental step to saving money.
16. Take advantage of the retirement match at work.
If your employer offers free money, take it. All of it.
17. Befriend your tax accountant.
Tax accountants are a great source of information for saving money. Be sure you understand the tax benefits that accompany charitable donations and running a home-based business, if you have one.
18. Cut transportation costs.
Transportation is one of the biggest monthly costs for many people. Riding bike or walking to work, if you live close enough, can save you a lot of money plus helps the environment. If you drive your car to work, commuting with a friend can significantly decrease your costs, and make the ride more enjoyable.
19. Involve your whole family.
Talk to your spouse and children about your financial goals. Kids can help search for best prices on upcoming purchases. Also, you can encourage each other to cut costs around the house by developing eco-friendly habits including turning off lights when leaving a room. Involving your family members empowers them and they will likely want to help save, especially if they know a reward is coming for them.
20. Reward yourself.
As you reach savings milestones, reward yourself. For example, after you have a $1,000 emergency fund saved, treat your family to a special weekend. Kids’ college saved for? Celebrate with a family vacation. You feel you’ve stashed enough for retirement? Delight in that once-in-a-lifetime experience you’ve been longing to take part in. Diligently saving money can be tough, and it’s important to relax a little and treat yourself for excellent progress.