We all know the importance of saving. At the same time, it takes a lot of self-discipline and planning to become an incredible supersaver. If you have your sights set on the big picture, this might come easy to you.
But, what about the rest of us? You know, the ones who aren’t as patient, disciplined, or just lazy? Good news! There are still insanely easy ways to save. And, I’m not talking about dollars either. When used together, these techniques could help you bank $500 per month.
Eliminate bank fees.
In Bankrate’s 2021 checking account and ATM fee study, the percentage of free checking accounts increased for the sixth consecutive year. A free checking account, Bankrate explains, is one with no monthly maintenance fees or minimum balance requirements.
You can save money by registering for a free account rather than a paid one. According to Bankrate’s 2021 survey, interest checking accounts that aren’t free are now charging a record $16.35. Meanwhile, noninterest checking accounts are charging just $5.08 a month, down from the record of $5.86 in 2015.
In addition, nearly half (48%) of noninterest checking accounts are free, a level not seen since 2010. At the same time, only 7.6 percent of interest checking accounts have no monthly fee.
The cost of other fees is also increasing. For the third straight year, the average fee for nonsufficient funds (NSF) – the cost of overdrawing any checking account – increased to a record $33.58, up by 22 cents since 2012.
Meanwhile, ATM fees on out-of-network ATMs have dropped for the fourth consecutive year to $1.51, a 10-year low.
Some of the best free checking accounts include Alliant Credit Union, Consumers Credit Union, Ally, Chime, and AXOS.
Lower your monthly bills.
“Negotiating a lower rate for your monthly bills could put thousands back in your pocket each year,” writes Barbara Booth for CNBC. “That’s a big win for many Americans since nearly 25% say that paying for basic necessities such as rent, utilities, and food have plunged them deep into credit card debt. Collectively, Americans owe more than $1 trillion on credit cards alone.”
Specifically, we spend on average;
- $237 on subscription services
- $94 on cell phone bill
- $58 on gym memberships.
But, how can you reduce these recurring expenses? Well, you could call them up and negotiate a better deal. You could also do some digging and switch to a more affordable cell phone plan. Or, you could just completely cancel an unneeded service like cable.
Other suggestions?
Refinance your auto loan or mortgage.
When the circumstances are right, refinancing can save you money in interest or let you extend the life of your loan. It may be worthwhile to shop around for a loan with better terms if interest rates are lower or your financial situation has improved.
Lower your student loans.
Monthly student loan payments can be lowered by hundreds of dollars through income-driven repayment plans.
Prorate your utilities.
During certain months, you may experience a spike in your electric or heating bill while in other months, it is lower. For example, if you use the a/c or heating half the year, this is a perfect solution.
Also, by prorating your utilizes you can predict your monthly bills instead of being surprised each month. And, that can be it easier to set and stick to your budget.
Bundle your cable and internet.
If you don’t want to cut the cord, then this is an option you should consider. The savings aren’t astronomical. But, you may save $40 to $50 each month. And, that adds up over time.
Even though all of the above is necessary if you want to save money, it’s time-consuming. And, between the research and actually trying to speak with a rep, you may end up with a gnarly headache.
The good news? You don’t have to do this on your own.
Tools like Trim, Truebill, and BillFixers will find and cancel unwanted subscriptions, as well as negotiate your monthly bills on your behalf. Some of them, such as Trim, can also automate your savings.
Save automatically.
Even though this seems obvious, I’m shocked at how many people still don’t do this. If that’s you, then here’s how to automate your savings.
Whether it is each payday, once a week, or once a month, it is up to you. And the amount does not need to be huge. For example, you could set it up where $50 from each paycheck goes directly into a savings account so that you don’t spend it. You can also use apps like Acorns and Digit to invest your spare change or automate your savings to reach financial goals.
You can save more money each month by simply increasing the amount you put into your 401k or 402b if your employer offers one. Pre-tax contributions aren’t even noticeable, so if you increase them by just one percent, your take-home pay won’t change much.
Let’s say you make $35,000 per year. By increasing your 401k contribution by just 1%, it will contribute $29.17 more per paycheck (if you’re paid biweekly). By doing so, you’ll save $758.42 per year!
That’s not a fortune. But, over the years, that’s a painless way to save for your future.
Ban plastic.
Here’s what I mean by banning plastic; leave your credit card at home.
I know. It can’t be that simple, right? Actually, it is. Research suggests using a credit card is more likely to lead to spending than using cash.
That actually makes a lot of sense. As the good folks over at Nerdwallet explain, “cash is a tangible piece of paper with value attached to it.” Spending it reduces the amount in your wallet. This is something you can see and understand. However, payment systems like Venmo, mobile wallets, and credit cards have led to a reduction in transparency.
How much more are likely to spend? According to one study, the average value of a cash transaction was $22, compared to $112 for a non-cash transaction. That’s a 409% jump!
Set aside your Lincolns.
If you’re going to pay in cash, you might as well turn it into a game and set aside every $5 bill you receive. How?
What happens to the change you get after buying a coffee or grocery shopping? Did you find a fiver on your dresser or in a jacket pocket? Instead of spending it, put it aside.
While this may not sound like much, it worked for a woman in Massachusetts. She started this savings hack in 2005 and ended up with a cool $40,000!
Buy and sell used.
In general, I buy used or refurbished items whenever possible — whether it is a household item, electronic device, or a car. After all, if you buy refurbished items, you can make money easily.
For instance, if you need a new laptop or even just a spare, you can find open-box refurbished ones at Best Buy or the Apple Refurbished and Clearance store. You might be able to find savings of 15% or more on these items. And, you may even be able to sell your old devices to these same stores.
If you’re looking to part with some of the things you never use, you have plenty of options. These include Craigslist, OfferUp, Poshmark, Facebook Marketplace, and Declutter. On a side, some people make some serious dough through garage flipping.
Be a savvy shopper.
According to research, American households spend $1,497 per month on non-essential items such as dining out, paying for cable and streaming services, and receiving subscription boxes. Hopefully, you’ve used a handy tool I already mentioned, like Trim, to help reduce these costs.
At the same time, you need to kick back and enjoy life a little. Also, you still need to pay for essentials, like food and clothing. Thankfully, if you’re a more savvy shopper, you’ll be able to save a lot of moolah enjoy the month without making too many sacrifices.
- For all your purchases, use a credit card with a cash-back rewards program. Most rewards credit cards give 2% cash-back. Others give you up to 5% on certain categories. But, if you can’t afford to pay off the balance each month, skip this piece of advice.
- When shopping online, earn rebates and cash-back through platforms like Rakuten.
- Save on entertainment costs by going to museums and national parks on free days. Furthermore, you can ask for discounts for students, seniors, and members of the military.
- Stick to your list when grocery shopping to avoid impulse buys. I’d also recommend you subscribe to the $5 Meal Plan is a weekly meal plan service
- Speaking of shopping, buy generic. When buying staples like salt, sugar, and baking soda, researchers at the National Bureau of Economic Research found that chefs tended to buy generic.
- Keep your receipts. Most retailers, like Walmart, have a price adjustment policy for past purchases.
- Plan your purchases according to annual sales periods for appliances, furniture, electronics, and more. Also, to prevent buyer’s remorse, don’t rush into any purchases.
Check your investments.
If you pay close attention to your investment portfolio, do you also keep track of the fees involved? It’s best to speak with your fund administrator, 401(k) administrator, or financial advisor for clarification. And, like anything else, fees may increase without you knowing.
In addition, the fees are often concealed from the investor? Why? Because, when managing your funds, it’s likely that you will “set it and forget it.” So, staying on top of these fees could save hundreds of bucks each year, if not per month.
To make this process easier, two tools are available.
The first one is Personal Capital. It is a free tool for organizing your financial accounts. Also included is a Retirement Fee Analyzer that will tell you how much you spend on fees yearly.
Another tool that does the same thing is FeeX. You can connect your accounts to this free tool to have it scan for fees. After the report is generated, you can see what alternatives are available and how much you can save.
Embark on a savings sprint.
Farnoosh Torabi, a financial expert, says this tactic requires you to take a hard look at your spending once a month (or once a season—whatever works for your goals) and pinpoint an area where you feel you’ve spent your money a bit frivolously. After you have identified that expense, make a bet with yourself that you can completely eliminate the cost for a period of time.
A good example is when Torabi noticed she was spending ridiculous amounts on Ubers and Lyfts. “I justified the expense every single time: ‘Well, it’s cold. Well, it’s dark. Well, I can’t use my phone as easily if I’m on the train,’” she explains.
“But the reality is that I was being a poor planner” by being lazy and not getting ready fast enough. “I was looking at my bank statement and pinpointed, ‘This is an area where I can make a dent.’”
Even if it’s specific to each situation, Torabi says being more aware of her spending habits over a three-month period saved her about 80 percent of what she normally would have spent on Ubers and Lyfts. And, that eventually added up to $500 in a three-month period.
Frequently Asked Questions About Saving Money
1. When should I start saving money?
The sooner you start saving money, the better.
More specifically, as soon you start earning an income, that’s when you should begin saving money. For most people, that’s in their 20’s. As an example, if you could set aside $400 a month and receive a 7% return starting at 25, then by age $65, you would have saved $1,057,681.07.
2. Where should I save my money?
That depends on when you access your money, as well as your financial goals. Generally speaking, you shouldn’t be all of your eggs into the same basket. As such, you should diversify your savings by having it spread across the following;
- Checking account for purchases
- High-yield savings account to earn the most interest
- Money markets for high-interest and easy access
- Certificates of deposit to generate a fixed interest rate
- Employer-sponsored retirement account so that you can enjoy your golden years.
3. What is a budget?
A budget is a plan to spend money based on projected income and expenditures over a specific period of time. It’s up to you how long you want to budget and you can adjust what time period works best for you.
You can prioritize your financial needs versus wants in your life by creating a spending plan. By helping you save when you want to spend, a proper financial spending plan can also help you avoid debt or pay off debt you have accumulated. Budgeting can reduce stress and help you stay on track, regardless of your income level.
4. Should I save or pay off debt?
As long as you have room in your budget, the best choice is to pay off your debt, while saving.
The sooner you take action towards paying down high-interest debts, the better your financial situation will be since high-interest debt can severely impact your finances. On the other hand, you don’t want to empty your savings tank in order to pay off your debt. Doing so means you won’t be able to cover an emergency.
So, if you have debt, keep making the minimum while building your emergency fund. Next, establish a debt repayment plan using something like the snowball method where pay off your smallest debt first and work your way up.
5. Is it better to save or invest?
Ideally, you want to do both.
When you have near-term goals, you’ll want to keep your money liquid and readily accessible, so the best approach is to set aside some money. As mentioned earlier, these would be high-interest savings accounts and certificates of deposit.
The time and compound interest potential of your money will be important when saving for long-term goals such as retirement. That means investing in 401(k)s, IRAs, stocks, mutual funds, and real estate.
