We all know that the more you can save, the more options you have in present money management as well as the future, but it can be hard to find a way to actually save money consistently over the long term. Here are some virtually painless ways to chip away at your savings goals.
1. Buying in bulk
Most of us know that we can purchase many items in bulk at a discount, but very few of us actually use this tactic to save money for savings, and instead rely on the money saved to sustain a higher rate of present-day spending. If you can save $10 by buying Brand X by the crate, that $10 needs to go into savings, not back into your wallet to be spent on your next shopping stop.
2. Keep the change
Many banks offer a debit card that will round up every purchase to the next dollar, so that if you buy something that costs $1.89, it will charge your card $2.00 and put the 11-cent difference into your savings account.
3. Budget and cut (a little)
Determine how much money you spend on some of the things you don't have to have every month -going to the movies, dining out, etc. Once you know what your spending, you can use all kinds of different tactics to reduce the spending in a way that will be nearly or completely painless. You can start by cutting that spending by 10% (or even 5% -doesn't matter) and raise the percentage slightly every month. Percentages aren't the only way to go though. If you go to one movie per month, try cutting that to 10 per year. The most important thing to remember is to take those saved funds and actually put them in savings.
4. No Purchase Days
Pick a day of the week when no purchases of any kind are made. If there is something you will need on that day, buy it the day before. Doing this will make you acutely aware of how much your existence is connected with daily spending. It also keeps you out of the marketplace one out of every seven days--that's one day that you are guaranteed not to make an impulsive or unnecessary spending decision. Increase to 2 or more days per month. Every day you're not spending is a day you're guaranteed not to make an unnecessary purchase.
5. Keep Your Tax Return Surplus
It is better to owe a little every year than to overpay and get a refund. The trick is to make sure the money makes it into your savings account and not into your next purchase. If you have setup your tax returns such that you get about $600 back every year, adjust it and put maybe $75 per month in your savings account ($50 savings for the excess you were paying in plus $25 to cover any tax you may have to pay next year). The money that used to arrive in that refund check to be spent on large unnecessary purchases is now safely tucked away in your savings account.
6. Review Your Telecom
Internet, cell phone and TV streaming services should all be reviewed to see if you can get monthly savings. These companies are all highly competitive, and they can often offer a better deal to switch or bundle services. Make sure you're getting long term savings, not just a short term promotional one. If you can save $10 per month after reviewing and switching, sock it in your savings account and that's $120 a year basically for nothing. Remember, saving money isn't about getting a large sum, it's about getting very small ones from many different places.
7. Reign in Debt Interest
If you have debt of any kind, you need to know the percentage and dollar amount you're paying every month. That money is a potential gold mine for your savings objectives. If you're paying multiple creditors, see if you can consolidate and get a lower interest rate. If you can reduce the overall payment you're making on debt every month, that saved money can either go into your savings account or toward further reduction of your debt. Even small savings add up over time.
8. Bike or Walk (sometimes)
Many of us get in the car and drive no matter where we're going. Three blocks? Get in the car. Instead, walk to that corner store and get the kids to bike or walk home from school. The more you walk or bike, the more you save. If your car gets 30 miles per gallon and gas is $3.00 per gallon, you save $1.00 every time you walk 10 miles. Put it in your savings account. Doesn't sound like much? You also save on vehicle maintenance, extend the life of your vehicle and improve your health all at the same time -all of which drastically reduces the chances of future unexpected expenses.
9. The Surprise Fund
Unexpected expenses can send a savings plan into chaos. Plan for the unexpected. Take some small amount of money every month and put it back separate from everything else. This will be where you go when an unexpected expense happens. The amount of money you put back should be small enough that you don't miss it, and you should continue adding until you have reached an amount you feel is sufficient to cover unexpected expenses.
10. Don't Buy Consumables on Credit
Never, ever purchase consumable products with credit. Gasoline, food and drinks, clothing, and other consumable items should always be paid for with money you already have. Credit should be used only for large purchases like a home, (perhaps) a vehicle, large appliances your "surprise fund" can't cover, etc.
11. Reduce Energy Consumption
Electricity is one of our largest monthly expenses, and there are many ways to reduce it. Alternative sources like solar are an obvious solution, but can be expensive to start. It can be made less expensive with rebates or by starting with a small but expandable system. If even that is out of reach, there are still plenty of options that will allow for reduction. Make sure all light bulbs are energy efficient LED's or other energy efficient types. Adjust the air vents to restrict air flow in some rooms. Make sure doors and windows have adequate sealing, and if they don't, fix it. Such repairs are usually cheap and easy. Compare your bills before and after. Get the surplus out of your wallet and put it in savings every month.
Become a Saver
There are countless ways to save money, and there is no "right" way that will work for everyone. What is important is that the concept of saving is understood, and that a mindset that will develop good savings habits is encouraged. As your savings grow, you can further increase them by switching to higher yield savings accounts and other opportunities that are available. A solid backing in savings is a key foundation for all personal financial goals. The most important thing to remember is that you can't just "save money" -you have to put your saved money into savings.