Why is spending money so much easier than saving it? According to a recent survey by GOBankingRates, Americans battle with this question a lot. In fact, they found that 58% of Americans have less than $1,000 in savings as of 2019.
Saving money is difficult for everyone, but it’s especially challenging for those of us who don’t have extra cash to put away.
No matter your financial situation, it’s never too late to turn it around. Here are some tips on how to start saving money, even if you’ve never saved a cent in your life.
Mind over Money Matters
Before you can be successful at saving money, you have to get rid of any negative mentalities you have surrounding it. In our culture of instant gratification, saving and budgeting can feel boring and restrictive.
In reality, that isn’t the case. Saving money now can buy you financial freedom and peace of mind later on. That’s far more valuable than impulse buys that you’ll forget about in a month.
Make a Spending Plan
Next, it’s time to take inventory of your current spending habits. Track your money for a week or month to see exactly where you spend it. Be honest with yourself, because this is the best way to identify opportunities for growth.
Use that information to make a plan for your spending. Start with your average monthly or weekly income and subtract the necessary payments, like rent and bills. Then, budget out how much you can spend on entertainment, restaurants, and other things that are important to you.
Does your budget line up with your actual spending? If not, it’s time to make a change.
Use the 30 Day Rule
Many of us have fallen into the trap of seeing a fantastic thing and buying it right away, only to have it sit unused in a closet for years. To avoid that problem in the future, use the 30-day rule for non-necessity purchases.
If you’re still convinced after a month of waiting that you do really want or need this thing (and you can afford it), go ahead and buy it. If not, move on and put that money into your savings account. This is one of the easiest ways to save money, and it’s a great exercise in patience.
Use Shopping Lists
Many of us have heard the adage “never go grocery shopping on an empty stomach.” Research has shown that to be true: even if you aren’t shopping for food, shopping while hungry increases spending.
The same can be said of shopping without a list. If you bring a list and stick to it, you’re much less likely to fall for well-marketed impulse buys at the store.
So make it part of your shopping routine to physically write down your list on something you’ll bring with you, like a notepad or your phone, and buy only the items on the list. As an added bonus, this also tends to make trips to the store a lot faster!
Couponing isn’t a game for grandmothers with too much spare time. It’s a prudent way to ensure that you’re not paying more than you have to, especially when making large purchases. While you can absolutely still watch for deals in newspapers and coupon mailers, take advantage of the new age of digital coupons.
Many of the stores you shop at on a regular basis have phone apps that allow you to download coupons for a wide range of products. Or, if you know what you’re looking for but don’t know where to buy it, coupon sites on the internet often let you search for a specific item or experience. Check out the Dealwiki page to find out what online coupons you could use on things you’re already planning to buy.
Host a Gathering
Going out for dinner and drinks with a group of friends is tons of fun. But if it’s your Friday night routine, you may be spending hundreds per month that could have gone into savings.
At least once per month, consider replacing your night out with a night in. Take turns hosting and have everyone bring a dish or a drink. Your friends will appreciate the savings too!
And if you use nights out as your chance to get away from the kids, check to see if there are any parks or other free gathering places you can use for the evening.
Cut Out Unhealthy Habits
It’s no secret that drinking, smoking, and doing other drugs on a regular basis is bad for your health. But it’s just as bad—if not worse—for your wallet.
Smoking a pack of cigarettes per day will cost you well over $2,000 per year. Add to that the average $558 spent on alcohol annually, and you’ve got about $3,000 that could have been saved instead. If you keep drug and alcohol consumption to a minimum, both your finances and your body will thank you.
Be Careful With Credit
Credit cards can be great, but they’re also full of temptation. If you’re the kind of person who tends to overspend with credit cards, it’s okay! That just means it’s time to redefine your relationship with those pieces of plastic.
Having at least one credit card open is good for your credit score—if you pay it off. Consider opening a card and putting one small, recurring payment on it (like Netflix or a gym membership). Then, set the card to automatically pay the balance in full each month and watch as your credit score rises.
If it’s tempting to use that card for other purchases, try hiding it in a very inconvenient location. And, with some of the money you’ve saved with the other tips on this list, start paying off the existing balance on your other cards.
How to Start Saving Money Today
There you have it: our tips on how to start saving money for an emergency fund, large purchase, or paying off debt. None of these tricks will fill up your account overnight, but if you stick with them over time, they can make a huge difference.
Before you make any other large financial decisions, make sure to head on over to our money and business archives for more solid advice.