It has been said that the two things you can be sure of in life are death and taxes. However, there is one more thing that you can be certain of, and that is the rising cost of living. Given the current state of the economy (inflation, The Great Resignation, America’s housing problem, global supply chain issues, a global pandemic, increased interest rates, and out-of-control student debt), the following is the definitive list of money-saving tips to relieve your financial stress and help build some wealth.
Basic Savings Tips 101
It’s no secret that the average American family is struggling to make ends meet. In fact, a recent study showed that nearly 60% of American adults don’t have enough savings to cover a $1,000 emergency. If you’re part of that statistic, don’t worry, there are still things you can do to get your finances on track. Below are some basic savings tips that can help you get started.
- Understand and track your credit score and net worth: Your credit score is one of the most important factors in determining your financial health. A good credit score can help you get approved for loans and credit cards with lower interest rates, while a bad credit score can do the opposite. That’s why it’s important to understand what your credit score is and how it’s calculated. You can get a free copy of your credit report from each of the three major credit bureaus (Experian, TransUnion, and Equifax) once per year. In addition to your credit score, you should also track your net worth. Your net worth is the value of your assets (property, savings, investments, etc.) minus your liabilities (debt, bills, etc.). You can calculate your net worth by adding up the value of your assets and subtracting your liabilities.
- Create and use a budget:One of the best ways to save money is to create a budget and stick to it. A budget is a plan that shows you how you’re going to spend your money. When creating a budget, you should track your income and expenses so you know how much money you have to work with. You can use a budgeting app or spreadsheet to help you keep track of your finances.Once you have a budget, you need to stick to it. That means only spending the money you have allocated for each category. If you find yourself going over budget, try to find ways to cut back on your spending. For example, if you have a food budget of $200 per month, but you find yourself spending $250, try cooking at home more or eating out less.
- Create personal financial goals: Another important saving tip is to create personal financial goals. This can help you stay motivated and on track with your finances. When creating financial goals, you should make sure they are specific, measurable, achievable, relevant, and time-bound (SMART). For example, a goal like “save more money” is too vague and not specific enough. A better goal would be “save $500 in the next three months.”
- Use a phone app to monitor your spending and savings: There are a number of phone apps that can help you track your spending and savings. Some popular apps include Mint, You Need a Budget (YNAB), and EveryDollar. These apps can help you see where you’re spending your money and how much you’re saving. They can also help you create a budget and stick to it.
- Make your payments on time: One of the most important things you can do for your finances is to make your payments on time. This includes your mortgage, car loan, credit card payments, and any other bills you have. Late payments can damage your credit score and make it harder to get approved for loans in the future.
- Use every benefit you can that your employer offers: Many employers offer benefits that can help you save money. For example, some employers offer retirement savings plans like a 401(k) or 403(b). If your employer offers a retirement savings plan, you should take advantage of it and contribute as much as you can. Employers may also offer other benefits like health insurance, life insurance, and disability insurance.
- You can always start a side hustle: If you’re looking for ways to make extra money, you can always start a side hustle. A side hustle is a way to make money outside of your full-time job. There are a number of ways to make money with a side hustle, such as freelancing, pet sitting, or becoming a driver for a rideshare service like Uber or Lyft.
Personal Finance Tips
Saving money is a priority for many Americans. Here are a few personal finance tips that go beyond the basics to help you save money.
Crush your debt: There are a few things you can do to reduce your personal finance debt. We know this is easier said than done, so here are some tactics you can use today to reduce your debt tomorrow:
- Create a budget and stick to it. This will help you to see where your money is going and where you can cut back.
- Make more money. This can be done by getting a second job or finding ways to make extra money.
- Negotiate with your creditors. This can be done by calling them and asking for a lower interest rate or a lower monthly payment.
- Consolidate your debt. This can be done by taking out a personal loan or using a debt consolidation service. These are just a few tactics that can help you to reduce your personal finance debt.
- Combine debt to a new loan with $0 interest credit card: If you have multiple debts, consider consolidating them into a new loan with a 0% interest credit card. This will help you save money on interest payments and can make it easier to pay off your debt.
- Lower student loan payments and interest rates through refinancing: If you have student loans, you may be able to lower your payments and interest rates by refinancing your loan. This can save you money over the life of your loan and make it easier to pay off your debt.
- Cancel automated purchases for “wants”: If you have automated purchases set up for items that you don’t really need, consider canceling them. This can help you save money and avoid unnecessary spending.
- If you get a tax refund, be strategic about it: Use it to pay a bill or start an emergency fund. This can help you save some extra money and make it easier to cover unexpected expenses.
- Bundle your insurance policies: If you have multiple insurance policies, consider bundling them with the same carrier. This can help you save money on your insurance premiums.
- Take advantage of your employer’s HSA plan: If your employer offers a health savings account (HSA) plan, you may be able to save money on your healthcare costs by taking advantage of it. This can help you save money on out-of-pocket healthcare expenses and can make it easier to pay for healthcare costs in the future.
- Cancel insurance you don’t need: If you have insurance that you don’t need, consider canceling it. This can help you save money on your premiums and can make it easier to pay for the insurance you do need.
- Increase your health insurance deductible: If you are looking to save on your monthly expenses, one place you can start is with your health insurance deductible. By increasing your deductible, you will reduce your monthly payments. However, you need to make sure that you have enough money saved up in case of an emergency.
- Create a healthy emergency fund: Another way to save money is to create a healthy emergency fund. This fund should be used for unexpected expenses, such as a medical bill or car repairs. By having this fund, you will be less likely to need to use credit cards or take out loans when something unexpected comes up.
- Automate savings so you pay yourself consistently: Another great way to save money is to automate your savings. This means setting up a certain amount of money to be transferred from your checking account to your savings account each month. This will help you to make sure that you are consistently saving money.
- Get cash for switching banks: If you are looking to switch banks, you may be able to get cash for doing so. However, you should only switch banks if it is beneficial for you. For example, if you are able to get a lower interest rate or fees, it may be worth switching banks.
- Do you have two incomes?: If you are lucky enough to have two incomes, you can save one and live off the other. Even if you do this for a couple of months, this will help you create a decent emergency fund.
- Make your money for you: When it comes to making your money work for you, there are a few key things to keep in mind. First and foremost, diversification is key. This means investing in a variety of different asset classes and sectors in order to spread out your risk.
- One way to do this is through a CD (certificate of deposit) ladder. This involves investing in CD’s with different maturity dates, so that you always have access to cash as one CD matures and can reinvest the money into another CD.
- ETF’s (exchange traded funds) are another great way to diversify your portfolio. These funds track a variety of different assets, so you can get exposure to many different investments without having to purchase them all individually.
- Again, regardless of which path you take, make sure you do your research on both the pros and cons of each.
Saving money as a family can be difficult, but there are ways to cut costs without making major changes to your lifestyle. Here are some personal finance savings tips for American families that you can use today:
- Avoid expensive gadget fads: The latest must-have gadget can be tempting, but it’s often a waste of money. Do your research and wait a few months to see if the product is actually worth the cost.
- Use cloth diapers: Disposable diapers are convenient, but they’re also expensive. Cloth diapers are a more economical option, and they’re better for the environment.
- Make your own baby food: Store-bought baby food is convenient, but it’s also expensive. You can save money by making your own baby food at home.
- Make friends with other mothers: Being a parent is often more fun (and less expensive) when you do it with friends. Swap babysitting duties so you can each get a break, and take advantage of group discounts on activities and childcare.
- Use generic prescription drugs: Generic prescription drugs are just as effective as brand-name drugs, but they’re usually much cheaper. When your doctor prescribes a medication, be sure to ask if there’s a generic option.
- Minimize eating out: Eating out is convenient, but it’s often more expensive than cooking at home. Focus on cooking simple, healthy meals that you and your family will enjoy.
- Take advantage of vocational schools: Many vocational schools offer affordable services, such as haircuts and car repairs. This can be a great way to save money on beauty and auto services.
Home Ownership Tips
For many Americans, their home is their largest asset. And yet, most of us are not doing enough to protect our investment and save money. Here are some simple home savings tips that every American family should implement:
- Use LED lights: LED lights last much longer than traditional incandescent bulbs and use far less energy. Over the course of a year, you can save hundreds of dollars by making the switch to LED lights.
- Use less water and lower the temperature on your water heater: Low-flow appliances and fixtures can save a family of four up to 14,000 gallons of water per year. That’s a savings of about $100 per year on your water bill.
- Weatherproof your home: Caulking and weatherstripping your doors and windows can save you up to 30% on your energy bill. That’s a savings of hundreds of dollars per year.
- Cut down on laundry detergent: Laundry detergent comes in concentrated form now so you can use less and save money. Or you can make your own laundry detergent for pennies per load.
- Unplug appliances: Even when they’re turned off, appliances still use energy. So unplug them when you’re not using them. This can save you up to $100 per year on your energy bill.
- Plant a garden: A vegetable garden can save a family of four up to $600 per year on their grocery bill. And it’s a great way to get fresh, healthy food.
- Use a clothesline: Drying your clothes on a clothesline saves energy and money. It’s also better for your clothes since they’ll last longer and stay brighter.
- Identify energy suckers: Things like leaky windows, old appliances, and poor insulation can all make your energy bill higher than it needs to be. Fixing these problems can save you hundreds of dollars per year.
- Repair whenever possible: It’s often cheaper to repair something than it is to replace it. So before you buy a new appliance or piece of furniture, see if you can repair the one you have.
- Consider renting: If you own a house, take on a roommate or rent out a room. This can provide extra income to help offset your mortgage payment or other expenses. And it’s a great way to meet new people. =)
You don’t have to give up going to the store or the mall. There are many money savings tips that Americans can use when shopping:
- Get free stuff: Master the art of getting stuff for free by using “buy nothing groups” on Facebook and Nextdoor. These groups are a great way to find free items that people are giving away in your local area.
- Get free food: Use free apps that give away free food for downloading their app. This is a great way to get free food, and it can also help you save money on your grocery bill.
- Take advantage of birthday discounts: Many stores offer special discounts to customers who have a birthday, and this can be a great way to save money on your purchases.
- Use library resources: Libraries offer a variety of resources that can be used for free, and this can be a great way to save money on your expenses.
- Be strategic about clothes shopping: Cheap clothes that are cheaply made are not worth the ROI, so it is important to ask yourself why you are buying an item and if you will actually wear it.
- Embrace couponing: One of the best ways to save money on groceries is to be a master of coupons. There are many ways to get coupons, such as online, through the mail, or even from the grocery store itself. Once you have a stockpile of coupons, you can start planning your grocery trips around sales and promotions.
- Buy in bulk when it makes sense: This can be a great way to save money on items that you use often or that have a long shelf life. Buying in bulk can also help you save money on perishable items if you have the space to store them. Just be sure to only buy in bulk when it makes sense for your budget and your family’s needs.
- Read once a week: Scrutinize your grocery store’s weekly circular. This will help you see what items are on sale and plan your grocery shopping.
- A raincheck?: Ask for a rain check when a sale item is sold out. This can help you get the item you want at the sale price even if it is sold out. Just be sure to check the expiration date on the raincheck so you don’t end up with an expired item.
- Use cash or debit cards only: This will help you stay within your budget and avoid impulse purchases. If you must use a credit card, be sure to pay off the balance in full each month to avoid interest charges.
- Find ways to enjoy downtime without spending money: There are many ways to do this, such as reading, going for a walk, or playing a game. Just be sure to avoid activities that will tempt you to spend money, such as shopping or going out to eat.
- Free trials: Take advantage of free trials of premium streaming services (i.e. HBO Max, Showtime, etc.). Most platforms (i.e. Appletv, Amazon Channels, etc.) will offer their own free trials so take advantage of it. This will help you save money on your monthly bill and avoid impulse purchases like movie rentals.
- When food shopping, prepare a list and stick to it: This will help you avoid impulse purchases and stick to your budget. Just be sure to have a list of healthy and affordable options so you can make the best choices for your family.
Miscellaneous Life Hacks
Our final set of money-saving tips falls into the area of “life hacks.” These are tips that cross all categories and can benefit almost anyone. Enjoy.
- Make your own meals: Meal subscription services like Blue Apron and Hello Fresh have become increasingly popular in recent years. And while they may seem like a convenient way to get dinner on the table, they can actually be quite costly. The average meal subscription service costs about $60 per week, which can add up to more than $3,000 per year. If you’re looking to save money, it’s best to avoid these services and prepare your own meals instead.
- You can always take it with you: When you’re running errands or out and about, it’s easy to grab a quick bite to eat at a nearby convenience store or fast food restaurant. But those impulse purchases can really add up over time. To avoid spending money on snacks, try making them at home ahead of time. This could include things like hard boiled eggs, trail mix, fruit bars, or veggie cups.
- Ride like the wind: Whenever possible, travel by two wheels instead of four. Walking or biking is not only good for your health, but it can also save you a ton of money on transportation costs. If you live close to work or running errands, try walking or biking instead of driving. Not only will you save on gas, but you’ll also avoid paying for parking.
- No-spend day: One of the best ways to save money is to challenge yourself to a “no-spend day.” This is where you avoid spending any money on certain days. Or you could choose to not spend any money on certain types of purchases, such as eating out, shopping, or entertainment.
- Is prepaid in your future?: If you’re tired of paying a hefty monthly cell phone bill, consider ditching it altogether. There are a number of prepaid cell phone plans that can save you a lot of money. Just be sure to do your research to make sure you’re getting a good deal.
- Ditch costly habits: It’s no secret that alcohol and cigarettes are expensive habits. If you’re looking to save money, it’s best to avoid these products altogether. If you do drink, try to limit yourself to one drink per day. And if you smoke, consider quitting altogether.
- Do you really need one?: One of the best ways to save money is to sell your car. If you don’t need a car to get around, you can save a ton of money on transportation costs. You can also save on things like car insurance, registration, and maintenance. If you do need a car, consider carpooling with co-workers or using public transportation.
- Have a garage sale: If your home is cluttered, it’s time to declutter. Not only will this make your home more livable, but it can also help you save money. Having a garage sale is a great way to get rid of unwanted items and make some extra cash. You can also donate items to charity or sell them online.
- Volunteering: If you’re looking for a way to save money on entertainment, consider volunteering for local events and festivals. This could include things like concerts, fairs, and sporting events. In many cases, you can get free or discounted tickets just for volunteering. You may even be able to make some money.
- Focus on the experience: One of the best ways to save money is to spend money on experiences instead of things. This could include things like travel, concerts, and sporting events. It could also include things like memberships to museums or gyms. Experiences are often more memorable and enjoyable than things, and they can often be had for less money.
As you can see from the more than 60 money-saving tips above, there are many ways to get a handle on your finances. By doing this, you’ll be able to balance your living costs with saving money for yourself, whether it’s for retirement, a savings goal, or an emergency fund. And if you think we forgot any tips, feel free to add them in the comments.
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