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50 Ways To Save Money I Wish I Knew Earlier

50 Ways To Save Money I Wish I Knew Earlier

Are you scratching your head at the end of each month, wondering how your bills soared that high, or where your “extra” money went? Do you daydream about a secure financial future, or think wistfully about what you would do if you had all the money you have spent loosely over the years?

Cease pondering, stop dreaming, and vow to start doing something about your finances, today. No matter how deep your personal financial quicksand, or how many money missteps you’ve taken, you can both learn from the past and take constructive action going forward. Get started with the ways to save money shared here. Sure, you may wish you had this tips earlier… but you have them now, and that’s all it takes to move forward to a rosier financial future.

Build better relationships.

Talk to your bank. Are you receiving the lowest possible interest rate on loans? What about your mortgage? Are you carrying extra insurance, or does your current policy fit your needs? If you have credit card debt, does your bank know your plans to pay off that debt? When was the last time you talked to the free financial advisor your bank likely has on staff? Proactive clients with long-term relationships with a particular institution can often negotiate better deals and rates. Some banks offer incentives for “house holding,” or consolidating assets, insurance, and other services with them. You won’t know what’s possible until you talk to them, so pick up the phone regularly.

Cultivate friendships for free. Literally. Skip weekends with your pals at the movies, expensive brunches, or out-of-town trips. Instead, link up for a day at a beach or park, or a drive to explore a nearby town that no one has actually spent time in. Local fairs and festivals are fun choices for groups with varying financial considerations–those who want to spend more, can, but those on a strict budget can still enjoy the day, environment, and perhaps a well-chosen treat.

Reign in your family. Already stressed about holiday gift-giving and the associated price tag? Make a pact with your family that no gift will exceed a certain monetary limit, and encourage homemade items or gifts of service. Those will small children would likely appreciate a free day or two of babysitting, for instance, while those with pets might value a guaranteed pet sitter during their next out-of-town trip. I’d bet anyone would enjoy having cleaning or chores done around their home.

Court the old fashioned way. Our most romantic moments rarely have anything to do with money. So, why is your dating life centered around how much money you spend on your partner? Picnics, walks, and surprise gestures don’t take a lot of cash–they take thought, time, and effort, which are worth so much more.

Talk to your friends and family. Be upfront about the fact that you are on a budget, and that you are committed to making it work. While you don’t have to get specific, making them aware of your ambition will save feelings when you decline invitations that don’t fit your budget. Better yet, they may think of creative and cheaper ways to spend time together.

Take pet care into your own hands. No more trips to the fancy doggy spa. Now, you bathe and groom your pooch yourself. Invest in a pair of clippers, soap, and other minimal tools, then prepare to lather, rinse, repeat.

Make gifts yourself. Homemade gifts show a thoughtfulness that store-bought items simply can’t equal. Mature adults recognize that the gift of time is truly the most precious of all, and will appreciate your gift even more. You will appreciate the fact that assembling your own goods will save a great deal of money, come the holiday season.

Evolve your entertainment options.

Read. Not only is a book cheaper than a movie, reading also boosts brain power, productivity, and can infuse you with creative ideas. Consider forming a book club with friends for another low-cost social option. Bonus points for choosing reading material that enhances professional skills, potentially leading to new or increased sources of income.

Better yet, read books from the library. Remember the library? That place where you spent time as a child is still there, and it’s still free. You already pay for it when you paid your taxes, so why not enjoy it? Modern libraries also offer DVDs, internet access, popular magazines, and family events.

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Ditch the cable subscription. How many of those channels do you actually watch? Likely only a handful. Get the shows you love from Netlix or a similar vendor and cut both costs and time wasted by commercials. If it’s new and you have to see it, get it from RedBox for a dollar and some change.

Turn off the television entirely. Doing so cuts your electric bill, removes commercial temptation to spend, and frees you up to pursue other activities. It may take a few days to find other ways to unwind, but the rewards are worth it.

Shop smart, eat smart.

Only go grocery shopping with a list. Bonus tip: never go grocery shopping while you’re hungry. Numerous studies show that shopping sans plan, while hungry, is the fastest way to break the bank with unintended purchases.

Embrace your inner Iron Chef. We waste hundreds of dollars each year when we throw out spoiled, rotten food. Make a habit of regularly scouring your pantry and fridge, and actually using all that stuff that’s about to expire. If the same items keep making their way to your “use or lose” dinners, stop buying them.

Get excited about leftovers. Wasteful cooking is wasteful spending. Plus, cooking in bulk saves money. Get accustomed to preparing leftovers, and stock up on items like spices, cheeses, and other disguises that freshen them up that second time around…and the third.

Pay attention to expiration dates. Households waste hundreds of dollars each year on food that is thrown out. If you’re going out of town in a few days, skip the milk at the store so it doesn’t go to waste. When you do buy perishables, reach to the back to get your hands on items that expire later.

Stash snacks in your car. Doing so will free you from the temptation of a drive-thru window when rush hour keeps you on the road, or when that lunch you skipped makes your blood sugar crash at the end of a long day. You’re also more likely to eat a healthy, budget-friendly meal in the evening if you don’t walk in the door starving.

Forego alcohol, cigarettes, and other expensive habits. Your health will thank you, and so will your wallet. Even occasional indulgences add up over time.

Compare grocery stores. Consider not only the store’s standard selection, but also the frequency of sales and sale items, and gas and time to get to the store. Shopping at several stores may result in the lowest possible grocery bill.

Go generic. Many retailers offer store brands that are significantly discounted from the name brand items. Get in the habit of purchasing these product lines whenever possible. The quality is comparable but the savings can be huge.

Plan by sales. Grocery stores often post weekly specials. A quick scan of your store’s weekly flyer will tell you what is in season and, therefore, lower in price, as well as clue you in to sales, discounts, and promotional offers. Plan your meals around the sale items and what you have on hand, and watch your food bill decrease.

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Stock up immediately following a holiday. Everything from cards to wrapping materials and decorative items is cheaper immediately following the holiday. Think beyond Christmas and Thanksgiving, and head for the stores in the days following any holiday for which you send a card (Mother’s Day, Valentines Day, and so on) for deep discounts.

Use technology and gadgets to your advantage.

Set up an “offers only” email account. Use it to sign up for every rewards program you can, from that coffee shop you frequent weekly to the specialty grocer across town you only see occasionally. Over time, those perks and rewards will add up.

Sewing machines are cool. Why? Because they save you money! Every time a button pops off, a strap pulls loose, or a hem tears, you simply set it up and go to town. No more tailoring or alterations bills, or ditching of clothing due to damage. Now, you can make your wardrobe last.

Install a programmable thermostat. Some models even allow you to set different temperatures during the day and night, meaning you’ll be comfortable when you’re home but not paying to cool or heat a space that no one is in during the day. If you’re not sure what the ideal temperature is for your abode, call the manufacturer of your heating and cooling units and pose the question to them.

Take banking online. You’ll save a stamp and gas to get to the post office if you have to. You can also pay bills in the middle of the cycle and keep careful watch over every transaction, which means no more late or overdraft fees.

Live conscientiously.

Unplug. Turn lights off before you leave. Keep doors and windows closed while the air conditioning is running, and turn it up a few degrees if you won’t be home. Unplug chargers and other devices that suck energy when not in use. Better yet, do all of these things and watch your energy bill hit rock bottom.

Run ceiling fans. Running ceiling fans counterclockwise in the summer and clockwise in the winter can lower both your cooling and heating bills. The rotation disperses cooled or heated air, meaning less energy is required to establish and maintain the desired temperature in the space. Don’t know how to change the direction on your fan? Get up on a ladder and take a look–most have a switch on the side–or call the manufacturer directly.

Give your dryer a rest. Your dryer requires electricity, which can raise your utility bill sky high. Keep the bill in check by doing a bit o’ good for the environment by drying your clothes on a rack or line. Folding drying racks can be found at any home goods or superstore. Or, hang a rod and line with materials readily found at hardware stores.

Invest in “smart” power strips.  If you use a computer at home, or run multiple devices like a laptop, printer, stereo, and so on from your desk, this item is a must have. The power strip focuses power usage on the devices you’re actually using, reducing the energy sent to the others and negating “phantom charge.” While some consider unplugging energy from gadgets you’re not actually using to be a waste of time, consider that the charges aren’t so “phantom” when they show up on your bill.

Get fit for free. Paying each month for a gym membership or classes at a local club? Say good-bye to the bill and start walking or running in your neighborhood. Or, spend one month’s membership on a few free weights, exercise ball, bands, or an ab roller from a superstore, and purchase benefits that last beyond 30 days.

Shop used items first. Clothing, sporting goods, furniture, household goods, and a host of other items can often be found in good condition on community boards, newspaper classifieds, or through online hubs such as Craigslist. Get in the habit of looking for gently used items before you shell out full price for a new one.

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Brown bag it. Bringing your lunch to work each day will save you hundreds each month, not to mention you’ll be able to spend that precious break in a manner you actually enjoy, with food that nourishes and you can afford–sounds like a pretty good break!

Streamline your wardrobe. Pay a reasonable price for quality, sturdy classics, then mix and match them. You may not be sporting the shirt on the cover of this month’s fashion magazines, but you will be classy, tasteful, and dressed in a way you can afford, which is always in style.

Drive by the rules. Tickets can cost a small fortune in some states, so avoid them by driving within the speed limit and obeying other regulations. Your gas mileage will thank you, too.

Garden. Whether it’s a single planter with basic herbs on a windowsill, pots of tomatoes on your porch, or an extensive in-ground plot, gardening will cut your produce bill. Having plants around may also reduce stress and improve the overall quality of your living environment, cutting doctor’s bills and the need for that stress-busters class you pay for each week.

Reuse, recharge, recycle

Save grocery bags. They’re the perfect size for small trash cans in a guest room or bathroom, or to pick up pet poop or collect diapers in a nursery. You paid for them, might as well use them.

Buy rechargeable batteries. They will save you money, especially for families with kids’ toys, or people with power tools. Remember to unplug your charger when not in use.

Barter. Have a sweater you’re over but that babysitting neighbor always compliments? Do you cook, but the handy man down the street doesn’t? Talk to service providers about bartering; with taxes continuing to soar, many are open to the idea. Make a short list of items you would be willing to barter and negotiate them out of your home to clear clutter for a good cause.

Spend intelligently

Avoid cards with annual or usage fees. If you have to pay to play, that card isn’t that good of a deal. These days, there are a number of cards that offer no annual fee. Attracted to a particular card but they do charge an annual fee? Call them, and ask for it to be waived. If you threaten to go with a competing lender who doesn’t charge, they just may be open to helping you out.

Get your coupon on. Coupons are, quite literally, free money. It’s worth it to sit with a circular for a few minutes each week and clip those you think you’ll use. For extra savings, combine coupons with regular store sales.

Remove your card from any stored shopping accounts. Entering your card number every time you shop online forces to think about your purchase. Taking the time to type it in means you will have to decide the purchase is worth it, reducing the chances of spending unnecessarily. Not storing cards also keeps them more secure.

Ride share. Always drive yourself? Consider teaming up with a friend during weekend outings, or better yet, find a coworker who can help your commute. You’ll save money in gas, mileage-based insurance and, over time, vehicle maintenance.

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Keep a piggy bank. Every penny you lose is a penny that could be spent reducing debt, contributed to an emergency fund, or otherwise constructively employed. Keep track of them and give yourself a visually encouraging boost with a loose change jar in an easily accessible location. Decide how you’ll use the money before you toss in the coins, and delight at how quickly it adds up.

Save automatically. Divert part of your paycheck directly into your savings account. Some employers allow paychecks to be deposited into multiple accounts. If yours does, designate a sustainable percentage to go to savings. Not sure what you can reasonably put aside? Start with a set amount, such as $50 (the minimum to open an account at many banks) or even $100. At the end of your pay period, evaluate how much, if at all, you miss that amount. Dedicate raises and bonuses directly to savings.

Make mature choices

Accept that a car is only a piece of sheet metal. You don’t need one with bat wings and 10 speeds. You need one with a good safety rating and good fuel economy, one that your insurance company won’t charge a fortune to insure. You don’t need a truck unless you need to haul things; you don’t need a sports car unless you are a street racing driver. Take emotions out of the car buying equation, and make practical choices you can afford.

Take advantage of the stuff your taxes paid for. Public transportation, community events and educational classes, and public parks are in existence because your taxpayer dollars funded them. Enjoy the places, people, and opportunities you’ve already funded.

Live where you can afford to. This doesn’t just mean a part of town. To make your budget work, perhaps you should consider a new town, state, or even region. “Fun” places are only fun to live in if you can afford to do fun stuff there. You might be surprised by how relaxing you find any location, once you’re free of money woes.

Do the required maintenance on your home, car, and anything else you own. While it’s a pain at the time, adhering to the recommended maintenance schedule will drastically increase the lifespan of cars, lawnmowers, tractors, anything with an engine. In some cases, such as your vehicle, regular maintenance can prevent costly problems and keep you safe. When it comes to assets such as your home, regular maintenance preserves their value.

Stay focused. Saving for something specific? Keep your eye on the prize, literally, by placing photos of the items or notes with a keyword on your wallet and near your computer. Tempted to peruse the world wide web for some spontaneous, pajama-clad retail therapy? Halt! Take a look at the picture–what you’re saving for is much more satisfying than any spontaneous purchase.

If the first 49 don’t completely cut the proverbial mustard, remember there is another sure-fire way to save more money:

Earn more money. If you’re serious about boosting your reserves, you may need another job. Devote time to finding new sources of income every day, or cultivating skills that allow you to pick up a gig here and there from home. No task is too small or menial, and every penny adds up. Dog walker? You can do that. Babysitter? Every family needs one. Driver for Uber, ghostwriter, transcriptionist, or tutor? If you’ve got the skills, use ’em, and cash in.

Hungry for more ways to save money? Check out these 10 Easy Ways You Can Save Money Tonight.

Featured photo credit: Clipped Coupons With Scissors 3/Chris Potter via flickr.com

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Last Updated on September 2, 2020

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways to set financial goals and actually meet them with ease.

4 Steps to Setting Financial Goals

Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

1. Be Clear About the Objectives

Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

2. Keep Goals Realistic

It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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4. Short Term Vs Long Term

Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

How to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a two-step process:

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

Ensuring Healthy Savings

Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

If you’re not sure where to start when tracking expenses, this article may be able to help.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

3. Make a Plan and Vow to Stick With It

Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

Nowadays, several money management apps can help you do this automatically.

At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

  • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
  • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
  • If you go shopping, always look out for coupons and see where can you get the best deal.

The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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5. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

6. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

Making Smart Investments

Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

1. Consult a Financial Advisor

Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

2. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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3. Compounding Is the Eighth Wonder

Einstein once remarked about compounding:

“Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

Use compound interest when setting financial goals

    Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

    Start saving early so that time is on your side to help you bear the fruits of compounding.

    4. Measure, Measure, Measure

    All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

    If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

    Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

    The Bottom Line

    Managing your extra money to achieve your short and long-term financial goals

    and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

    More Tips on Financial Goals

    Featured photo credit: Micheile Henderson via unsplash.com

    Reference

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