11 Tested Ways to Save Money This Year: Real Ways to Save Money
Saving money is a bit like following a diet. You know that you’ll feel better in the long run, but that doesn’t make it any easier to put it off.
Similarly, whether you want to save money or lose weight, it’s hard to resist the allure of instant gratification. Unhealthy meals and sugary snacks can be too tempting, just like unnecessary expenses.
Fortunately, just as small dietary changes can have a significant impact on your waistline, slight adjustments to your spending habits can improve your financial situation without you even realizing it.
Real Ways to Save Money This Year
Today, we are reviewing 11 proven tips that yield desired results with minimal effort. Now, let’s explore the core of the topic.
Manually transferring money to your savings account every month is a recipe for problems. You might forget to do it, for instance. Or, if you accidentally overspend and your finances start to tighten, you might “forget.”
In the end, the extra effort increases the likelihood of not reaching your savings goals (we’ll come back to this later).
That’s why it’s wise to set up automatic transfers. If you opt for this solution, you’ll be saving money automatically. The bank will transfer funds from your checking account to your savings account automatically, eliminating the need for you to actively manage it.
An online bank like Revolut is an excellent option.
2.Start Using Cash
Having access to digital wallets, credit cards, and debit cards has made spending money more convenient than ever before.
Moreover, these credit cards allow you to spend money you don’t have! Unfortunately, this convenient access to capital is a double-edged sword when it comes to saving.
That’s why some budding savers are reverting to using cash. They withdraw a fixed amount at the beginning of each month (or week) and use it for purchases. Seeing money leave your wallet is a simple incentive to live more frugally!
3.Make Online Purchases More Difficult
For similar reasons, another effective way to save money is to make online purchases more difficult. Think about the “buy now” button on Amazon, for instance.
If your banking details are already saved, you’re literally one click away from buying something that could be delivered the same day! Instant gratification is within reach, which encourages impulse buying.
Counter this financial risk by making the payment process more challenging. It could be as simple as removing your banking details and shipping address from your favorite online shopping sites.
The inconvenience of manually entering them again next time might be enough effort to deter you from hitting “buy.”
4.Impose a Reflection Period Before Purchases
If the time it takes to enter your details doesn’t stop you from impulsive buying, you can also enforce a longer reflection period. In this case, you add the item to your cart and then force yourself to step away for a certain amount of time.
Whether it’s thirty minutes or thirty days, this reflection time helps you realize whether you truly need the item or not.
An additional advantage of this approach is the possibility of receiving discount codes from the retailer when they notice you abandoned your cart. Because they want you to buy, they might offer you a discount to encourage you.
5.Cancel Unnecessary Subscriptions
When was the last time you fully utilized your expensive gym membership, watched a series on Netflix, or listened to something on Spotify? If it’s been a while, a quick way to save money would be to cancel these subscriptions.
This simple step could free up a surprising amount of capital that you could redirect to a savings account.
Here are a few other subscriptions you might consider canceling:
- Meditation apps
- Cloud storage
- Meal kit deliveries
- Online newspapers and magazines
- Online gaming services like Xbox Live
A service like Revolut can help you identify subscriptions you no longer use and should cancel.
6.Set Savings Goals
One of the best ways to stay motivated and consistently save money over time is to set realistic savings goals. Consider what you’re aiming to accomplish.
What positive outcome are you willing to make financial sacrifices for each month?
For example, you might want to pay off your credit card debt, make a down payment on a house, prepare for retirement, or go on a family vacation.
Whatever the goal, keeping it in mind should guide your spending habits and encourage you to adopt a more frugal lifestyle.
7.Track Your Expenses
Tracking expenses is akin to tracking the calories you consume. It’s far from exciting! Yet, it provides you with the data you need to reach your goals.
When you deduct your expenses from your earnings, you can determine the amount available for savings. You can then compare this figure to your goals to check your progress. If it’s not matching up, you can adjust your spending accordingly next month.
Let’s take an example: saving $10,000 in 18 months, which equates to a monthly saving of around $556. Now imagine you’ve earned $2,000 this month and, after tracking your expenses, you realize you’ve spent $1,650.
Since you only need to save $350, you could spend a maximum of $1,238 next month ($2,000 – $556 – ($556 – $350)) to stay on track.
8.Tackle High-Interest Debts
Debts can hinder your saving efforts, especially when interest rates are high. After all, you’re obliged to repay the lender funds that could otherwise be deposited into a savings account.
Add late fees or penalties to the mix, and you could create a vicious cycle that drains money from your account.
If you find yourself in this situation, try paying off your high-interest debts using the avalanche method. Over time, you’ll need to allocate less and less money to debt repayment, allowing you to save.
9.Reduce Your Bills
Bills are another significant source of money loss that can make saving seem impossible. Many people are left with little after paying for electricity, mortgage, car, and phone. Fortunately, there are effective ways to cut down on these inevitable expenses.
Let’s start with electricity. Monitoring your consumption using a smart meter, investing in energy-efficient appliances and lighting, improving home insulation, and limiting heating and cooling usage can lead to substantial savings.
Mortgages are trickier to tackle, but refinancing could be an option to put hundreds of USD back in your pocket each month through a lower interest rate. And why not downgrade your car and phone for more cost-effective payment plans?
10.Capitalize on Annual Sales
Some purchases are both important and essential. However, do you genuinely require them at this moment? Or can they wait for the next annual sales, where you can indulge and acquire essential items at the best prices?
By choosing the right timing, you can save hundreds (or thousands) of USD to put into a savings account.
11.Be Strategic in Your Purchases
Regarding purchases, another significant expense for most households is the weekly grocery visit. And the situation has worsened recently with rising food prices.
Consider buying generic products rather than branded ones to cut costs and achieve potential savings.
Even better, avoid going to the store without preparation. Decide in advance the meals you’ll prepare, check the ingredients you already have in the fridge or pantry, and then make a list of what you need.
This way, you’ll avoid impulse buying and only purchase items you’ll use. Also, enroll in the store’s loyalty program, and your grocery bill should start to decrease soon!
Give These Money-Saving Methods a Try
Just like with a diet, most of us would benefit from cutting down on expenses and saving more money each month. Unfortunately, putting off what we want today in the name of future financial gain can be discouraging.
Moreover, when times are tough, knowing how to save money in the first place can seem like a mystery. If you’re facing this challenge, we hope these ideas will help you get started.
Incorporating these 11 tested ways to save money into your daily routine can lead to a significant positive impact on your finances. From automating your savings to making informed purchasing decisions, these strategies empower you to take control of your financial future. Start implementing these techniques today and watch your savings grow over time.
How quickly will I see results after automating my finances?
While results may vary, many people notice positive changes within a few months. Consistency is key to seeing the full benefits of automated savings.
Can I use a mix of cash and cards for budgeting?
Absolutely! Combining cash for specific categories and cards for regular bills can help you maintain control over your finances.
What’s the best way to negotiate bills with service providers?
Research competitors’ offers, call your provider, and express your willingness to switch. Often, they’ll offer better terms to retain your business.
How do annual sales events differ from regular sales?
Annual sales events, like Black Friday, offer significant discounts on a wide range of products. These events are usually held once a year and attract bargain hunters.
Is it better to pay off high-interest debts first or save?
Prioritize high-interest debt repayment before focusing on saving. The interest accrued on debts often outweighs potential savings.
Can I apply these strategies to both short-term and long-term financial goals?
Absolutely. Whether you’re saving for a vacation next year or building retirement funds, these strategies are adaptable to various financial goals.