15 of the Best Money-Saving Strategies
Updated: Dec 2, 2020
Here is where you need to begin when getting serious about saving money, and then niche it down from here as to what will fit into your lifestyle so it can be consistent.
There are numerous types of Money-saving strategies and what you choose may be based on convenience, interests, amount of savings that can be enjoyed or you’re simply going for yours and taking what you can get, as shown by Dan Gibson in this comic strip of the "coupon lady" that everyone dreads while standing in line.
But all kidding aside we think there is nothing wrong with smart shopping as long as it doesn't lock up a register for 30 minutes. That being said, this comic strip is couponing of yesterday. As many people know it is quite a bit more efficient these days, thank God! So if you’re the type of person who solely uses their cell phone and that’s where all of your apps need to be, or maybe that does not matter. There are many options for you to consider, where we break it down in an article called, "The Best Ways for Saving Money on Groceries" linked for you at the end of this article.
A new study finds the median American household has just $4,830 in a savings account. That’s enough to cover minor emergencies and potentially even a few months of living expenses. Overall, between bank accounts and retirement savings, the median American household currently holds about $11,700, according to MagnifyMoney.
Almost 30 percent of households have less than $1,000 saved, Magnify Money finds, though the amount varies drastically by age. As of June 2018 -
Here’s how Americans’ median savings breaks down by age:
Millennials (born 1981-1998): $2,430
Gen X (born 1965-1980): $15,780
Baby Boomers and older (born before 1964): $24,280
So this means through some innovative saving strategies we can beef these numbers up! You got this! There is a long list of strategies for saving money.
1. Find out where your income is going before you decide what you can save. Most people have only a general idea of their expenses and spending. Logging everything you spend for two weeks to a month (even one week) can be eye-opening. Knowing how much you are spending on coffee breaks, lunches, random purchases such as (books, CDs, movies, new computer gadgets), and even groceries or cell phone bills often reveals places to save.
2. Make a budget - A budget provides a plan for spending. It sets out your fixed and regular expenses such as mortgage or rent, utility payments, car loans, credit card payments, and sets goals for other necessary but modifiable expenses, such as how much you spend on groceries or clothes. It also sets limits for discretionary spending, such as what you spend on entertainment, recreation, or optional travel. Put a savings goal in your budget and If you have trouble with overspending, try the envelope budget system where you use a set amount of cash for most spending. And once the cash is gone, it's gone. Or a debit card the holds a predetermined balance would be my preferred choice.
3. Pay yourself first - Paying yourself first before other expenses are the number one rule for successfully saving more. Many people discover that if they put aside a set amount in savings with every paycheck, then they don't really miss the money saved.
Even if you don't have your paycheck direct deposited, you can make a plan to contribute regularly to savings. You can still set up an Automatic Transfer from your checking account to savings. You can use other strategies for accumulating dollars to save.
Some people, for example, pay with cash and place all coins and $1 and $5 bills left at the end of each day into their "change jar." Every one or two weeks, they deposit the proceeds of this change-jar savings plan.
4. M1 Finance - Even this small step can build savings more quickly than you imagine. I actually use a program called M1 finance which does it all for you making it super easy. This app essentially is an aggregate of your Spending, investing, borrowing by working directly from your checking account integrating it into your M1 platform.
· Those with a savings plan are twice as likely to save successfully. That's where America Saves comes in. If you take the America Saves Pledge, we'll help you set a goal and make a plan. And it doesn’t stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your savings goal.
5. An emergency fund is a must - Chances are you’ve already been told that you need an emergency fund somewhere in the ballpark of three to six months of your income. Yikes! Overwhelming, right? At Invest go-to, our motto is ‘Start Small, but Think Big.’ In keeping with that, we recommend starting with an emergency fund savings goal of just $500.
6. Pay as you go for regular expenses - If you make a rule that you must use cash, checks, or debit cards instead of credit for some of your expenses, you may be more likely to control spending on those items. Unless you are very good at paying down your rewards and points-based credit cards. Food, fuel, utilities, and clothing might qualify for that list.
7. Be a disciplined shopper. You can support your goals by being a disciplined shopper.
For example, making a grocery list before heading to the supermarket can cut down on impulse purchases; studies show that cutting down on impulse supermarket purchases can save a family hundreds of dollars annually. Use the Flipp app to find bargains from the grocery stores that you frequent and keep your list down to essentials.
Don't treat shopping as entertainment. Heading to the mall just for the fun of "shopping" often leads to unplanned spending. The best choice is to shop only when you have the necessary purchase. If you simply can't resist shopping as fun, take only a small amount of cash and leave credit cards, debit cards, and checks at home.
During the year for birthday gifts and Christmas try getting an Amazon Prime account free trial, you can find the best bargains and get free shipping, it’s awesome!
8. Buy One Get One Free Dining - This is clearly a good idea when dining out, but just be wary most of the time they don't include drinks so just keep that in mind. The website I use is restaurant.com, which Has the largest network of restaurants associated with it than any other service. And I've always had a great experience with them.
9. Downsize your purchases - Buying good quality, however not designer brands that are overpriced. How much would you save if you bought a mid-range vehicle rather than a luxury nameplate for your next car or truck? What if you bought a late model used vehicle rather than new? How about an economy car instead of a gas-guzzling SUV? How about carpooling to work or taking public transportation, even on one or two days a week? Brown-bagging lunch rather than buying it out can regularly save about $5.00 per day.
10. Pay on time and manage your checking account wisely - Not only does not paying your bills and credit accounts in a timely manner hurt your credit rating but paying late incurs late fees which can quickly mount to sizable amounts of money. Bouncing a check or overdrawing your account with a debit card will also incur fees. Nationally, millions of consumers monthly pay millions of dollars in these fees. Manage your credit accounts and money wisely to avoid these unnecessary drains on your money and once again M1 finance could help dramatically manage your finances.
11. Pay off high-interest debt and credit cards - After you've got an emergency fund saved up, the next important step to finding more money for savings and even investment is to pay off the high-interest debt you have.
Pay off debt with the snowball method
If your goal is to finally get out of debt this year, you’re already on the right track — when you pay off your debt, you free up your money for financial goals. There are two basic strategies for kicking debt: pay off your highest-interest-rate debts first, or pay off your smaller balances first. While the former makes more sense mathematically, study after study shows that prioritizing your smallest balances, also known as the “snowball method,” is the most effective.
The snowball method was popularized by financial guru Dave Ramsey. List your debts according to balance, then tackle the smallest balance first while you make minimum payments on all other debts. Once your smallest balance debt is paid off, use the money you were throwing at that debt to pay off the next smallest debt, while making minimum payments on the others, and so on and so on until you finally reach debt freedom.
The idea is, when you’ve paid off a debt, you feel motivated and powerful, which gives you the momentum to keep going. And according to the data, like this study published in the Journal of Consumer Research, it works. People are more likely to stick with their debt payoff goals when using the snowball method.
There’s a caveat, though. One researcher said that the method works best “to the extent that a consumer’s debt accounts have similar interest rates.” Let’s say one of your debts has a slightly higher balance than another, but a massively higher interest rate.
In that case, it makes more sense to focus on the higher-interest-rate debt instead. Be logical about how you approach your debt, but remember: Personal finance is psychological, and quick financial wins can be a powerful tool.
12. Make a long-range savings and investment plan - Making a long-range plan for growing your savings and wealth can give you not only the incentive to keep saving but can help put you and your family on a more secure financial foundation and future.
13. (I know you probably know this) Start saving for your retirement as early as possible -Few people get rich through their wages alone. It's the miracle of compound interest or earning interest on your interest over many years, that builds wealth. Because time is on their side, the youngest workers are in the best position to save for retirement. And you can borrow against it for a lot less money as well.
14. Take full advantage of employer matches to your retirement plan - Often as an incentive, employers will match a certain amount of what you save in a retirement plan such as a 401(k). If you don't take full advantage of this match, you're leaving money on the table. If you are able to maximize is benefit, by all means, do that ASAP. this can make a huge difference at the end of your cycle of employment.
Where to Stash Your Basic Savings
15. Basic or emergency savings must be both accessible and secure - Of course, you'd like to earn as good a return as possible, but you don't want to invest savings where you can't get the funds immediately when you need them or where there is a risk that you might lose money. Some financial institutions offer several kinds of savings vehicles that meet these goals.
Savings Accounts Regular savings accounts don't pay much interest. But for your short-term savings, they can make sense. Shop financial institutions to find the best rate.
Money Market Accounts Money market accounts also called money market deposit accounts, are savings accounts that typically offer higher yields than regular savings accounts.
Share Certificate Accounts Like a certificate of deposit (CD), a certificate account at a good financial institution is a vehicle for investing a fixed amount of money for a fixed term usually at a fixed interest rate. Some financial institutions offer certificates with a variety of term lengths.
Traditional and Roth IRAs - An Ira or an individual retirement account is an investment account specifically created for building retirement savings. There are many types of IRAs, traditional IRAs and Roth IRAs both open by individuals. Simple IRAs and SEP IRA s are for self-employed people as well as small business owners. Both you and your spouse need to have earned income to contribute to an IRA and all IRAs offer tax benefits that reward you for saving. To learn more about IRAs and some fantastic new opportunities using the protections of an IRA (Click here).
You have a wide range of strategies to choose from, so find the ones that work best for your lifestyle. however, if you decide to be very bold and take this head-on you will most certainly get to your outcome much quicker. And if we're going, to be honest, some of these numbers are a little scary. I would also recommend reading the suggested articles that are related to some of the content on this article for further money-saving strategies.
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