How to Save Money and avoid unnecessary spending
Ways to Save Money and avoid spending much
Just like kitchen garbage, financial waste can pile up – leaving you with little room for your future. Whether you live month-to-month or enjoy living the luxury lifestyle, you can make some simple adjustments to change your path (save money).
No matter how much money you make, limiting financial waste will always leave you better off.
When you save more money, you have more money to invest.
And, if you have more money to invest, you can use the magic of compounding interest to become the next Warren Buffet.
Whether you’re living paycheck-to-paycheck or swimming in cash, you can make some simple adjustments to skyrocket your future.
Saving Money Is Important for Everyone
Yes, saving money is important for everyone…even the wealthy.
I recently met with a client who is financially successful. While income fluctuated, his annual earnings occasionally reached seven figures.
But, there was a problem. He spent most of the money he made.
Unfortunately, this describes most retirement savers in the U.S.
Fortunately, we were able to get our clients back on track in a hurry.
As their financial planners, we combed over their spending to figure out where their money was going and to find opportunities for them to save more.
Simple Tips and Ways to Save Money
Today, I’m sharing some of these suggestions with you. While not all of these money-saving strategies will apply to you, many of them could.
If you implement even a few of these tips, you could potentially save a bundle and set yourself up for a money-infused future.
1. Stop leasing your car
When it comes to saving money, some people just can’t give up their expensive wheels. And that might be okay as long as you’re not overspending in order to drive a fancy car.
To save money, it usually makes more sense to buy used – or even buy new.
Ideally, you’ll want to purchase a car you can keep for the long run.
Because, if you pay your loan payment long enough, you will eventually own your vehicle free and clear.
With leasing, however, you will never own your vehicle. You’ll make monthly payments in perpetuity, and you won’t build any equity along the way.
The bottom line: Stop leasing! Buy a car instead, and look for models dependable enough that you can keep them for a decade or longer.
2. Ask for a discount
I can hear my mom now, “If you don’t ask, you’ll never know.”
She was right. And this tip has saved me thousands of dollars and counting. You can approach it two ways:
Proactively: Call the customer service department of a vendor you make regular payments to such as cable TV, cell phone carriers, or trash service. Thank them for their wonderful service and then … ask for a discount.
It’ll take five minutes. One five-minute phone call can result in years of savings.
Reactively: Let me preface by saying this is not an attempt to get out paying for a service you most certainly owe money for. If you requested a service and you are happy with the result, pay your bill.
With that out of the way, we have all received a bill that caught us off guard. Yesterday, my wife received a bill in the mail for a test she agreed to have done. To her surprise, insurance did not cover it and she was billed $500.
My wife wanted to pay the bill and move on. I asked her to call and politely ask for a discount.
The result? They took $300 off!
How many times have you neglected to make a quick phone call because you were too busy? You might be missing out on hundreds – or even thousands – of dollars.
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3. Stop overspending on clothing
Do you really need new clothes? Maybe. Maybe not.
If your current wardrobe is sufficient and in good condition, consider how long you can go without purchasing anything new.
Three months? Six months? Could you go a whole year?
You could save tons of money by getting creative with the pieces you already have. And you’ll save lots of time shopping, too.
4. Watch your entertainment budget
Does it cost money to have fun? Sometimes it absolutely does. You have to pay to get into a concert, after all, and nobody is going to let you into your local theme park for free.
Then again, there are plenty of ways to have fun for free.
If you’re angling to save money, try experimenting with a $0 entertainment budget for one month. See how much fun you can have without spending any money. Some fun (and free) things include:
- bike rides or hikes
- building a fort out of couch cushions and sheets
- finding a Meetup group that matches your interests
- visiting a local museum on “free day”
- taking your kids to the park or playground
- playing a board game or doing a puzzle
- breaking out the sprinklers and hoses
- starting a small garden with seeds from a local seed share program
You get the point. There are plenty of ways to save money and still have fun, so don’t let anyone convince you otherwise.
5. Cut down on dining out
It’s astonishing how much eating out can eat up your budget!
If you’re not sure how to get out of the dining out trap, there are some fantastic recipe apps and online resources.
While it can be difficult to learn how to cook if you don’t have a lot of skills or time, there are plenty of recipes that are easy and nutritious.
If you need to make things as easy as possible, getting a crockpot or Instant Pot can also help. There are plenty of recipes for both that let you throw in your ingredients and push “start.” It doesn’t get any more convenient or cheap than that.
6. Confront your fancy friends
The two tips we listed above – limiting dining out and cutting your entertainment budget – can be difficult to execute when you have other high-spending friends. Just because you’re trying to save money doesn’t mean your friends are.
Unfortunately, peer pressure can be the death knell for your efforts if you’re not careful. That’s why, like it or not, you should probably tell your friends about your new spending and savings goals.
If you don’t, you’ll continue getting invitations to fancy dinners and parties that will throw your budget out of whack.
By starting an honest conversation with your friends, you may convince them to choose frugal things to do with you. Instead of going out to dinner, for example, you can plan a potluck and game night or have a BBQ at a local park.
7. Keep track of miscellaneous spending
Sometimes, money disappears without us knowing where we spent it. This is usually because we get busy and spend without any sort of plan.
If you want to stay on track with your financial goals, it’s important to make sure you’re not wasting $20 here and $15 there.
Here are some additional tips that can help:
- Track your expenses to see where your money is going. Find out if you really need what you’re buying.
- Get on a budget. Your budget doesn’t have to be complicated, but you should have a basic spending plan for the money you earn each month.
- If credit cards make you overspend, try using cash or debit only for a month. Doing so forces you to accept what you’re spending money on in that moment.
8. Find an alternative to cable television
If you’re a millennial, you’ve likely never even paid a cable bill unless you’re a huge sports fan. But, even sports fans now have options for “cutting the cord” of the cable company.
You can also get an over-the-air antenna to get free TV.
Heck, you can even catch NFL football games for free.
9. DIY your grunt work
Why pay someone when you can do-it-yourself for free?
If you’re forking over a ton of cash for a cleaning service, it can pay off to save that money and clean your own house for a while.
Got minors in the house? You could also put those kids to work!
By assigning cleaning chores to your kids, you can teach them about hard work. The experience of tidying up the house will also prepare them for when they’re out of the nest.
The same advice rings true for the work around the home, including gardening or home improvement projects.
Spend time in your own yard and you’ll receive several benefits. Not only will you get fresh air, but you’ll connect with the Earth and save money!
Ways to Save Money continue…
10. Analyze your travel budget
You can spend a ton of money on travel – or just a little bit. It all depends on your flexibility and your desire to save money.
If your goal is spending less, however, there are all kinds of strategies to consider. Tips that can help reduce your travel budget include:
- Check out the Points Guy to learn how to score free travel. But, only do this if you are debt-free and are able to handle using a credit card (that means paying it off each month!)
- Check out Secret Flying for airfare deals around the globe.
- Read up on travel hacks from an expert.
- Plan your vacation around the best value.
- Take an epic road trip!
- Check out local, state, and national parks – don’t forget national wildlife refuges!
11. Pay off debt
Far too many people pay only the minimums on their debts each month without ever taking the time to figure out what their debts actually cost over time.
Unfortunately, this can lead to paying hundreds – or even thousands – of dollars in interest each month.
Since interest payments don’t go toward the principal of your debts, this is money down the drain.
If you really want to save money, pay off your debt.
Imagine you have $10,000 in credit card debt at 18% APR. You’ve been paying $200 each month. At that rate, you’ll pay an additional $8,622 in interest and it’ll take 94 months to pay it off.
That’s almost 8 years!
If you were able to pay off your $10,000 in credit card debt quickly by cutting your spending, on the other hand, you could avoid almost $9,000 in interest AND free up $200 in extra cash every month.
When you pay off high-interest debt, you just can’t lose.
Try Out New Ways to Save Money
If you’re looking for more ways to save money, don’t forget to think outside the box. Everyone’s spending habits are different, so it’s likely you’ll have some special circumstances in your life that could help you brainstorm more ways to save.
You may also want to start the process by tracking your spending for a while. Once you know where your money goes each month, it’s a lot easier to find the source of your money woes.