5 Money Saving Tips

profileCarly DeBeikes | April 26, 2022
5-money-saving-tips

For some simple money-saving tips, try paying off your smallest debts first, canceling subscription services you don’t need, saving bonus money, turning off water and electricity at home, and going a week (or a month) without a nonessential purchase.

1. Snowball Your Debt Payments

One of the biggest ways you spend money every month is by paying off your debts, especially if you’re paying off multiple debts. Obviously, this is important to do, but there are smart ways of making your debt payments that still leave enough money for you to save some and still enjoy life.

The best way to do this is known as the debt snowball method, where you simply prioritize paying off the smallest debts while making sure to keep making the minimum payments on the larger debts.

Stacking your debt payments like this will help you pay off the smallest debts quicker than trying to pay an equal amount across all your debts. When you’ve completed paying off the smallest debt, move to the next larger debt while continuing to make your minimum monthly payments on the larger debts.

As your progress snowballs (hence the name), you free up more money every month than you would otherwise if you tried paying down all of your debts at once. While you will still be expected to keep making all your monthly payments, focusing on your smaller debts and doing the minimum for your larger debts is the best strategy to save money.

2. Cancel Unneeded Subscriptions

Cancel your automatic subscriptions and memberships. Many people spend a lot of money every month on their streaming subscriptions, gym memberships, food deliveries, Amazon Prime, clothing rental services, and so many other services. To start saving more money, take a long, hard look at all the things you’re paying for and the things you may have forgotten you’re paying for.

Are there some services you’re not really using that much? Are there some services you didn’t even know you were paying for? Can you find cheaper, or even free, alternatives, such as sharing a subscription plan with a friend or a family member, or going to a library for books and music? Can you downgrade your subscription to a lower tier? Can you cancel outright and then subscribe again when your budget has room for it?

If those questions can be answered with a “yes,” you’re in a position to selectively cut some of your subscriptions and memberships. The money you save from those plans every month can go into your savings or toward your debt repayments. When you’re in a better financial position, you can think about gradually re-adding some of your subscriptions — just don’t go back to everything all at once.

3. Make Use of a Windfall

At some point, you’re going to get some unexpected money — a bonus from work, some inheritance, a tax refund, a stimulus from the government, or a goodwill gift. When things are tough, it’s that kind of surprise that can make paying for rent or buying groceries so much easier.

But you won’t be able to make rent or get groceries if you spend your windfall all in one place. If you’ve got debt — as boring as it sounds — your surprise money should go toward paying down your student loans, your credit card debt, or whatever else you need to pay off. If you don’t have debt, put the money in a special emergency fund that you can access when your car breaks down or when your pet needs an unexpected vet visit.

4. Save Money at Home

It’s surprising how many people don’t realize that they can bring their energy bills down in a big way every month. Taking shorter showers, for example, saves money on your utilities. You can also install dimmer switches and energy-efficient LED light bulbs. These might make for an expensive one-off purchase, but they will save you more money in the long run than using older, more wasteful light bulbs.

Because of this, try to stay within your budget when thinking about how you can save energy — and therefore money — around the home. If you can’t afford to upgrade your light fixtures, make that a to-do item and come back to it when your financial situation is better.

5. Try a Spending Freeze

One interesting way to save money is to challenge yourself. For example, try a spending freeze where for one week, you don’t buy any nonessential items. No luxuries, no treats, no trinkets, nothing.

Once you figure out a comfort level, kick it up a notch. Try a two-week nonessential spending freeze. The real fun starts when you’re ready to go one whole month without buying anything frivolous.

One woman in Kansas, a mother of five kids, saved over $50,000 by reining in all her spending habits. Financial experts caution that some people might do better by setting a more flexible goal, but make it a goal that is still challenging.

Start with something small, like not buying takeout for a week or going without an Amazon purchase for a week. Once you build up your tolerance for that challenge, try to increase it: no soft drinks or Starbucks for a month (but you can still get your coffee fix by getting a coffee maker or espresso machine at home).

It All Adds Up

By implementing these five money-saving tips, you can build up a lot of savings over time. It can take a while to see the benefits, but it’s worth it in the long run.

References

Ways to Manage Your Money Better. (August 2021). Current.

What’s the Difference Between the ‘Snowball’ and the ‘Avalanche’ Debt Repayment Methods? (October 2021). CNBC.

Taking 10 Minutes to Go Through My Bank Statement Saved Me $468 a Month Without Any Real Sacrifice. (February 2021). Business Insider.

Here’s What This Expert Says You Should Do With All Your ‘Extra’ Windfall Cash. (February 2021). CNBC.

Ways to Manage Your Money Better. (August 2021). Current.

10 Ways to Save on Utility Bills. (April 2020). USA Today.

Millennial Money: Could a No-spend Month Get Your Finances Back on Track? (January 2021). Austin American-Statesman.

A Budget Game Plan: Mother of Five Pledges to Freeze All of Her Non-Essential Spending for January. (January 2021). CNBC.

Facing Financial Hardship? 14 Ways To Save Money. (April 2020). Forbes.

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