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Maybe you’ve made “saving money” a resolution for 2020. It’s one that’s really tough to follow through on, often because we associate saving with skimping. Depriving ourselves. Eating Ramen noodles for dinner.
The first step toward saving money is reframing the entire concept of saving money. It’s time to try viewing it not as being cash-strapped, but as reallocating your funds. Then, you’ll be on track to achieve your financial goals, whether that’s putting money towards a down payment on a home, doing a “Fixer Upper”-style renovation, or having the warm and fuzzy feeling that comes with an emergency savings account.
Just imagine how good the “before” and “after” snapshot will look as your financial health grows from scrawny to mighty. To put you on track toward saving money, we gathered 31 actionable tips you can do every day for a month. (P.S. None of them involve bricks of ramen!)
Open a high-yield savings account
We’re starting with the low-hanging fruit, err, dollars. It’s easy: let your money make money for you. When you put money into a savings account at a traditional brick-and-mortar bank, it’s typically earning less than 1 percent interest, explains Brittney Castro, a certified financial planner with personal finance apps Mint and Turbo. That’s why she suggests opening up a high-yield savings account. These types of accounts are typically online only, but you could be earning interest of 2 percent or higher while it’s sitting in savings, she says. Castro suggests setting up an automatic transfer into the high-yield savings account, even if it’s just $50 a month to start. The one drawback? If you need to withdraw money from the online savings account, it could take 24 to 48 hours to transfer the money, Castro explains. So, it’s good to have an emergency stash that’s more liquid.
Enact a 30-day waiting period
Let’s say you see an item you’re interested in buying. Instead of purchasing it right away, set a calendar reminder for 30 days out that reminds you of the item you wanted to buy, suggests Nick Loper of Side Hustle Nation. Getting in the habit of this will help you make more intentional purchases. Many times, you’ll forget you even wanted the item to begin with.
Set aside ‘no spend days’
“Set a goal for a specific number of ‘no spend days’ per month,” Beams suggests. A “no spend day” is a day where you do not make any discretionary purchases, like coffee, dining out, or shopping online. “This could help you curb unintentional spending and save hundreds every month,” she says.
Round up spare change
Call it a scavenger hunt! You’ve probably got some loose change hanging out in your couch, under you car seat, in your purse, or stashed in coat pockets. Gather it all up and feed it to your savings accounts. A warning, though: Avoid the change-counting kiosks at the grocery stores; they charge a fee. Many banks and credit unions have free change counters for account holders.
Review your subscriptions
Apps like Truebill will review your accounts and negotiate savings with companies on your behalf. But, if they save you money, they’ll take a cut. You could try doing this without Truebill by reviewing your monthly expenses and reaching out to companies on your own to see if you can take advantage of any savings, or if they’ll lower your bill.
Swear off $5 bills
Here’s a quirky tip to store away in your money-saving arsenal: Choose a denomination of money (say, a $5 bill) and then refuse to spend it unless it’s an emergency, suggests Greg Mahnken, a credit industry analyst with Credit Card Insider, a credit card comparison site. This year, Mahnken says he saved just over $400 by saving $5 bills alone, and, admittedly that’s without using cash very often.
Minimize credit card debt
Credit cards have some of the highest interest rates compared to other loans, Palmer says. Consumers who have existing debt could save money on monthly interest fees with a 0 percent balance transfer card that offers 12 to 18 months interest free. A good credit score—or a FICO score of 690 or higher—may be required to get this type of card, she says.
“If consumers can’t qualify for a balance transfer card, another way to lower costs is to pay down debts in order of interest rate, from highest to lowest,” she says. But, you don’t necessarily want to pay off your credit cards, especially your older ones, because the age of accounts is one factor of a healthy credit score.
Negotiate your credit card APR
File this under “it doesn’t hurt to ask.” If you have a strong credit score, you have a better chance of negotiating a lower rate, Palmer says. After all, your credit score may have gone up since you’ve opened your card. Simply call your credit card issuer and ask if your APR can be lowered
Tell your bank to ‘save the change’
Some banks, like Bank of America, and credit unions are offering “Keep the Change”-type programs that round up each purchase you make to the nearest dollar and then kick the spare change into your savings account. You can also try an app like Acorns that will invest your spare change.
Create and name dedicated savings accounts
If you’re saving for something specific, or working toward a financial goal, one easy way to save money is to create a dedicated savings account, says Dana Marineau, a vice president and financial advocate at Credit Karma.
“Instead of simply putting money into ‘savings,’ you’ll be contributing to ‘your first home fund,’ or ‘honeymoon pot,’ or ‘car savings,’” she says. “Knowing you’re working toward something specific will make it easier to contribute regularly and will help you avoid withdrawing from that account for anything else.”
Some banks allow you to actually name a specific account, according to Marineau. If yours doesn’t let you name an account, it still can be worth creating a separate, dedicated account so as to avoid dipping into a general savings account.
Pay with cash
Paying with cash can make you think twice about a purchase as you hand over your money, says Marineau. It feels more immediate, which can help you spend with more intent, she says. Once you set a budget for something—whether it’s a birthday gift or groceries—carry that exact amount of cash with you so you don’t overspend, she suggests.
Be careful of what you buy in bulk
Pay attention to unit pricing while shopping, suggests personal finance expert Tanya Peterson, vice president of brand with Freedom Debt Relief. You can usually find this pricing displayed on grocery store shelves or price tags. It turns out large packages don’t always provide the greatest value and mid-size packages may net you a better deal, she says.
Do a social media edit
Follow financially savvy young professionals instead of, say, fashion or travel influencers, suggests Brian Walsh, certified financial planner at SoFi. “They will inspire you to stick to your goals rather than keeping up with the Joneses.” One account worth checking out on Instagram: @thefinancialdiet.
Shop the dollar store
Get familiar with the inventory at your local dollar store. The same household items and non-perishables you spot at big-box stores or grocery stores may sell for much cheaper at the dollar store.
Sell your unused items
Knock out two resolutions at once by decluttering your home and selling your unused items, Peterson suggests. No need to spend a Saturday holding a garage sale, you can simply sell things online through Facebook Marketplace or OfferUp.
Buy ugly produce
Grocery stores will oftentimes discount abnormal-looking or bruised produce, even if the quality is perfectly fine, Beams says. This could shave $10 or so off your grocery bill. Here are more ways you can save at the grocery store.
Get a library card
Not only can you save money by renting books, Beams says, but libraries have all types of rentals available. We’re talking movies, museum passes, tools, telescopes and more.
Refinance your home
If you’re a homeowner, you might want to get in on the low interest rates that are being offered, or refinance to eliminate Private Mortgage Insurancepayments you’re making. Check with a mortgage broker to see just how much refinancing could save you, Beams suggests.
Budget differently each month
A trap we often set for ourselves is by having a set budget every month. But a better strategy could be treating every month differently, factoring things like family members’ birthdays, a vacation, or the holidays, says Kavita Kamdar, head of Chase Autosave. A special budget for each month can help guide your spending and keep you on track, and also keep you from feeling defeated if you spend more during a certain month. A tool like Chase’s Budget Buildercan help you make these kinds of adjustments.
Take advantage of free community activities
Concerts, festivals, and even guided hikes are often offered for free and can be a fun way to get together with friends or family members, says Jessica Salazar, a managing partner at Northwestern Mutual. Peruse your community calendars and try out an event, free of cost, instead of making a dinner reservation.
Max out the points on your credit cards—but don’t overspend
Whenever you use your credit card to make a purchase, transfer the cash from your checking account and pay off the purchase immediately, Salazar says. That way you can still earn the benefits—whether it’s cash back or airline miles—from using your credit card without racking up the debt and paying interest.
Increase your 401K contribution
The benefits of this are twofold: It reduces the short-term cash you have available, so you’ll spend less, but you’ll also be building your net worth, says R.J. Weiss, a certified financial planner and founder of the personal finance site The Ways to Wealth. Before doing so, make sure you have enough flexibility in your budget to increase your contribution and, if your employer has a 401K match program, research the limit.
Pack your lunch
A study from Visa found that people spend $6.30 a day on lunch when they pack their own. That compares to $11.14 a day when they’re eating out. Visa has a lunch tracker app to help you determine how much you’re spending on your meals; it’s available for iOS devices.
Audit your bills
If your bills are set up on auto-pay, there’s a good chance you’re not taking a good look at your monthly statements. Set aside some time to make sure there are no errors on your monthly bills. For instance, a couple of years ago I audited my own bills and found that I was erroneously being billed $6.99 a month for a “leased router” on my Internet bill. I owned a router. I was able to get a credit on my account once I pointed out the error.
Use your FSA at the drugstore
This might be something you want to wait to do until the end of the year. But, if you’ve got a Flexible Spending Account—and you don’t want to risk losing money set aside in it—you definitely should know about all of the items that you can spend it on and stock up. We’re talking sunscreen, First Aid care, motion sickness aids, lip balm, eyedrops, condoms, contact lenses, and more. Walgreens has a comprehensive list on what’s FSA eligible with and without a prescription.
Re-shop for car insurance
It’s easy to take a “cruise control” approach to your car insurance, renewing every year without hesitation. But Kimberly Palmer, a personal finance expert for NerdWallet, suggests re-shopping for auto insurance to see if you can save some money by switching plans. A NerdWallet study found that 70 percent of drivers have been with their car insurance companies for four years. And yet, Americans, on average, could be saving $859 a year by shopping around for car insurance, the study found. If you’ve recently been in an accident or received a speeding ticket, it’s especially a good idea to re-shop your insurance because some companies aren’t as punitive as others, according to Policy Genius, an insurance comparison site.
While you’re at it, bundle your insurance
If you have apartment insurance and vehicle insurance, bundle ‘em together. You’ll often be able to get a reduced insurance premium by doing this with your insurance company, says Victor Fong, a Toronto-based certified public accountant and personal finance expert.
Dispute overdraft fees
According to an analysis from NerdWallet, the average American overdraws on their accounts a little more than twice a year. Overdraft fees can vary, but hover around $35 each time you do it. You might be able to get your bank to waive the fee—and it may be as simple as pointing out how long you’ve been a customer.
Create a chore chart
Staying on top of your home maintenance tasks can save you big bucks. For example, forgetting to change your HVAC filters could lead to dirty filters—which might mean increased energy bills and damaged systems rack up repair bills between $350 and $900. Similarly, cleaning your gutters could save you money by preventing dry rot to the fascia and soffit boards and siding.
Boost your credit
Ultimately, a good credit score can help you nab the best interest rates on credit cards, auto loans, and home loans, ultimately translating to savings. A score of 740 or above will get you the best rates. Having good credit can also help you save on auto insurance and exempt you from putting down a deposit for your utilities.
There are plenty of credit-boosting building blocks that are approachable. You may want to try out a service like ExperianBoost or UltraFico so that your bills, like your utility payments, start getting reported. Find out when your credit card company reports to the credit bureaus so that you can make sure your balance is under 30 percent by that date. Here are 23 of our favorite expert-approved credit-boosting tips.
With these expert pointers in mind, you’ll be able to confidently approach your 2020 savings goals.
If you’re interested in purchasing your first home, then please contact your nearest Denver Realtor.
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