Saving money is crucial for a plethora of reasons, including emergencies, significant life events, important purchases, and to build a successful future.
But saving can be challenging if you don’t know where to start or how to go about it. Here are seven ways you can start saving money today:
- Differentiate between wants and needs.
- Save money on food.
- Pay down your debt.
- Set a savings goal with a weekly contribution.
- Save for something exciting.
- Use money saving apps.
- Cancel subscription services.
You can use the tips we have listed in this article to start saving money today. Even by implementing one or two of these money-saving tactics you’ll be on your way to building better financial stability than you had before.
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1. Differentiate Between Wants and Needs
An effective way to start saving is to differentiate between your wants and needs. Needs are necessities like food, shelter, and transportation that you need for survival and can’t sacrifice just to save money.
However, wants are things that you can live without and should limit spending on when you’re trying to save money. Spending money on wants can cost a lot more than you’d imagine, especially if you don’t have a budget for how much you are allowed to spend on things you don't need.
For example, if you buy a coffee and breakfast every morning on your way to the office, you are likely spending $50 each week on coffee and breakfast alone.
Instead of buying yourself coffee and breakfast every morning, you can cut back to doing this once a week. Bring your own breakfast and make coffee at home the other four days.
Cutting back on this expenditure alone can save you around $40 every week, which adds up to over $2,000 a year. Breakfast and coffee is a simple example for you to figure out what you are spending the most money on.
It may be getting your nails done every few weeks or golfing multiple times per week. While these expenses involve fun activities, they cost a lot of money over time.
If you can cut back on these wants, you will save money that will eventually accrue and add up in the long run. If you want to learn more about needs and wants and how to budget for both without completely cutting out your wants
2. Save Money on Food
Although food is a need, you can save money on this necessity which can then go into your long-term savings. There are two ways to go about saving money on food.
Eat Out Less
First, you can spend less money eating out and more time cooking at home. Buying groceries is cheaper than eating out, especially if you're spending money on eating out multiple times a week, which can quickly add up.
If you spend every day at work eating out at lunch, it’s going to cost you a lot more money than bringing your own lunch to work.
You do not have to stop eating out completely, but even cutting down to half of your regular eating expenses can save you a lot of money in the long run.
You may not immediately notice the difference, but these savings will add up over time.
Save on Groceries
Another effective way to save money on food is by saving on your grocery shopping. While you need groceries to cook and survive, there are a few ways to save money on them.
You can start by comparing prices between stores and shop wherever it is cheapest. You can also find sweet deals in the sales section of papers and buy what you need when it’s on sale.
If you want to learn about even more ways to save money in your daily life, check out the book Money Hacks on Amazon. You will learn many ways to decrease your spending and make every penny count so you can save more.
The book will also answer the most common money questions you have.
3. Pay Down Your Debt
If you have debt, whether from student loans, buying a car, mortgages, or credit cards, you’re probably paying a hefty sum in the form of interest.
While interest rates vary depending on the type of debt, you’re still required to pay the sum over time until your debt is completely cleared.
It is crucial to have savings in the form of an emergency fund while you have debt to be paid off. These savings should cover between three and six months of your regular expenses.
However, you should work on paying off your debt before you completely focus on saving money. The longer you have debt, the more you will end up paying in the long run, and the less money you will save.
You should also avoid using credit cards if you cannot clear the bill every month. Credit cards have one of the highest interest rates, and can cost you a lot of money if you aren’t careful.
Every month you don’t pay off your credit card debt, you will be charged a high interest rate on that amount. This interest builds up every month, and you have to pay it back no matter how long it takes.
While credit cards might be necessary for larger purchases like homes and cars, it costs money, and the longer you have debt, the less money you will have to put into savings.
The book Pay Off Your Debt for Good on Amazon is great for anyone who has debt they are trying to pay off or just wants to improve their relationship with money.
Not only will you learn how to improve your spending habits and get out of debt, but you will also learn how to avoid taking on more debt in the future.
4. Set a Savings Goal With a Weekly Contribution
Another great way to start saving money is to set a financial goal for yourself. You can do this by deciding how much you want to save and by when you want to save it.
Once you decide how much to save up and give this amount a timeline, you can figure out how much to set aside each week or from each paycheck.
So each time you get paid, take out the amount of money you need for your goal and put it into a savings account where you can't easily access it.
One of the best ways to make sure that you stick to your savings goal is to have money automatically transferred to your savings each week.
With an automatic transfer, you won’t have to worry about remembering to put money away for savings.
5. Save for Something Exciting
One of the best ways to motivate yourself to save is to decide on a specific event or item you are saving up for. Common things to save for include vacations, material items like electronics or a car, or a big event like a wedding or your kid’s college education.
For example, maybe you want to save up a certain amount of money to go on a vacation with friends, and you need this amount saved up by a certain date.
Instead of saying, “I need to start saving money,” you can think, “If I have this much money in three months, I can go on the trip,” which makes saving more exciting.
Setting aside money for something specific will make saving much easier as you have something to look forward to. If this seems challenging, start small and work your way up.
If you start big you may stretch your budget too thin and try saving so much that you have a hard time paying the bills. Start with small goals and after a few months you can see if you have the extra money in your budget to add to your savings account and increase your weekly savings.
6. Use Money Saving Apps and Websites
If you’re not too effective at tracking money, there are plenty of money-saving apps and websites that you can easily access on your phone or computer to help you save money.
Apps like Acorns help you save money in small amounts each time you make an expenditure, and you get to choose when and how much to put away.
For example, you can set up a rule so that every time you buy something with your debit card, the app will round off your purchase, taking out the extra money and putting it into your savings account.
You can also set up a specific amount that automatically goes into your savings account every time you make certain purchases.
So if you’re trying to cut back on something like eating out, every time you spend money at a restaurant you can have the app transfer a certain amount of money into your savings.
This way, even if you are spending money on wants you still have some going into your savings. Chime is another excellent website you can use to save money automatically.
Like Acorns, Chime will help round off your purchases and automatically transfer that extra money into your savings account.
Using Chime, you can also set up an automatic transfer for a certain percentage of every paycheck so that it goes into your savings account where it will earn some interest.
There are multiple money apps like these with additional customizations based on your financial goals. Many banks also offer programs and saving trackers that you can use if you do not want to opt for an outside service.
Apps and websites like these are also great if you want to start investing your money in addition to saving.
7. Cancel Subscription Services
Subscription services may not seem that expensive at first glance, especially since most of them cost as little as a few dollars per month.
However, when you have multiple subscriptions, the cost can quickly add up. And if you are not paying attention, some services will continue to charge you each month even if you have stopped using them.
An effective way to save money is to cancel a few of your subscription services. Consider going through your emails and bank statements over the last few months to see what subscription services you are getting charged for.
Compile a list with information on how often they are charging you and the amount being debited from your account. Even if you use all your services every month, consider cutting back on a few if you want to save money.
For example, while having all the streaming services is great, cutting back to only one or two won’t dilute your entertainment experience, and you can put this money into your savings account or investments.
You can always resubscribe if you feel the need to while clearing out services that unnecessarily drain your wealth. Most subscription services that deliver goods to your home can also be adjusted to a monthly subscription rather than a weekly one as this will help save money in the long run.
You can also lower the cost of some of your subscription services by checking out the different pricing options they offer. For example, many streaming services cost less if you have a plan with ads.
While ads can be quite distracting, a plan like this will cost you less and help you save a bit of extra money every month
Learning to save money can be overwhelming at first, especially when you haven’t tried to inculcate this habit before. However, by starting small you can slowly build the discipline required to save a significant amount in the long run.
As mentioned earlier, you don’t have to start with all the tips on this list. Instead, start with a few that work for you and integrate more money-saving habits along the way.
Acorns’ spare-change savings tool and its cash-back rewards program make investing easy. But the management fee on small accounts is steep.
I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.