Save Money by Spending Less
Savings are talked about a lot, generally in grandiose tones that tell you about big cuts to make and big deposits for accounts that the standard saver might not ever have. That might be why an estimated 76% of Americans are living paycheck to paycheck. After all, if the best advice financial advisers can give you is to get $10,000 in savings as soon as possible, it’s easy to feel overwhelmed.
You don’t have to cut back at all costs to save for the things that matter, though. You can put that savings account to work for you today, with nothing more than your spare dollars and cents. Here’s how.
Save Money by Identifying Comfort Spending
Think of comfort spending like emotional eating, except with money. It’s taking something you need to do – providing resources for yourself – and doing it to the extreme. No matter who you are or what your paycheck looks like, it’s something we all do.
Look at the money you spend on necessities that go beyond what you actually need – look for where spending goes from necessary to just for your comfort. You need food, but do you need to spend money on eating out or having it delivered multiple times a week?
Say you spend $10 on lunch out twice a week. Then check out a lunch wrap that you can make for around $2 a serving. Even with the $4 for two wraps, that’s going to save you $16 a week, which translates into over $800 savings in a year.
Maybe food isn’t where you comfort spend. Maybe it’s on clothing, personal care, toys for your kids, or even cleaning supplies. Maybe you have to have that name brand glass cleaner, regardless of where you live or who shares your home. Assuming that bottle costs around $6, you could save $4 a bottle just by switching to the $2 generic brand. Do that for every cleaning item in your home and you have hundreds saved in a year.
Identifying comfort spending is not about telling to make deep cuts; it’s about making little ones that can add up to big dollars. Your needs will still be taken care of, and you might even find a new product or recipe favorite that you wouldn’t have discovered if you kept comfort spending.
Save Money by Consolidating Your Debts
If you’re reading this and you’ve ever had money to your name, you probably have some debts, too. The average American household has over $15,000 in credit card debt, $33,000 in student loans, and another $150,000+ in mortgage costs.
Consolidating your debt doesn’t mean you’re going to get rid of any of that – not by a long shot. What it does mean is that you’ll be paying a lot less in interest.
Let’s look at credit card debt as an example. The average American has over $7,000 worth of debt spread across three cards. Those cards likely have different balances and different interest rates, and you’re making separate payments on each of them. Consolidating your debt can mean a lower overall monthly payment, and it also means interest is only accruing on one account, so you’re earning less of it overall. The same goes for student loans.
To see how much you could realistically save simply by consolidating your debt, check out this handy online calculator.
Save Money by Busting Out Your Piggy Bank
It might seem like a cliché, but the change jar has stood the test of time for a reason. Especially these days, when coin use in general financial transactions is down, those times when you take cash out inevitably leaves you with nickels and dimes lining your pockets or purse. Don’t just leave them to the dust bunnies, put them to use. Save up your coins and when your vessel – jar, piggy bank, plastic bag, whatever – is full, take them in to deposit.
This doesn’t come with a cut, at all. It’s your money. You already have it. All you have to do is get it back into your bank. Bam! Instant savings.
Save Money by Turning Your Mind Around
Believe it or not, your savings have a lot to do with your state of mind. Specifically, a number of studies including a 2014 journal article from the University of Minnesota have found that those with a childhood background of financial uncertainty are more likely to make impulsive decisions and give up on difficult situations, including in their own finances.
If you think of yourself as someone who “grew up poor” or “who’s always been poor,” you’re perpetuating a mental cycle that tells you your cash is likely to up and leave if you don’t use it while you got it. It’s a very real thought process, but you have to remember that it’s not going anywhere unless you say it is. Just like with anything else in this world, if you’re looking to save, you have to believe that you’re capable.
Spend On What Matters
Don’t save without a reason – you’re going to feel directionless and less motivated to continue if that’s what you do. Figure out what matters to you and don’t be afraid to put your money toward that. Going out to the movies might not seem important, but taking that family vacation might.
Having a car with the newest features might not matter, but having one that’s safe for you and your family should. At the end of the day, your savings are there to be applied toward larger things later. It’s good to have an emergency fund, but keeping all your spare cash tied up for “just in case” isn’t going to motivate you to save. Having goals that enhance your life will.
Just decide what matters, and put your pennies toward that. Soon, they’ll grow into dollars, and you’ll have your goals in hand before you know it.