Seven Painless Ways to Save Real Money
We all want to save money, but we often don’t because spending money is much more fun. But there are ways to save money without killing your good time. Here are seven ways to save real money.
No Nickels and Dimes
We called this article seven painless ways to save real money because we don’t think it’s worthwhile to do things like clip coupons to save .25 on toilet paper. Whoopee, a quarter! That’s not going to change your life. We want to give you ways to save so much money that it will impact your life. Ready? Here we go.
- Track Spending
You already have more money than you think; it’s just that you don’t know where it goes every month. You got paid on Friday, and seemingly overnight, only a fraction of your paycheck is left. Where does it go?
There is an easy way to find out, track your spending. No, you don’t have to write everything down; you won’t remember to do that anyway. You can use Mint.
Connect your bank and credit card accounts to your Mint account (don’t worry, it’s secure. Mint is owned by Intuit, the same company that owns Turbo Tax) and all of the transactions will be downloaded into Mint.
Now you can see exactly where your money is going. You had no idea you were spending nearly $200 a month on work lunches or that you are spending another $120 a month on your morning and afternoon coffee. Just those two things add up to $3,840 a year, nearly $4,000!
We have no problem with spending money on non-essentials if they give you pleasure. Things like going out to dinner or meeting a friend for drinks but how much pleasure do you receive from ordering from the same handful of lunch places every day and your twice daily $3 coffee? Not $4,000 worth. Those things are just habits; they are just part of your routine, so you do them almost automatically.
Take five minutes the night before to pack up some leftovers from dinner for lunch. Or even just buy a few frozen meals to leave in your office kitchen. Buy a travel mug and bring your morning coffee from home. In the afternoon drink the free coffee in your office. If it’s nasty coffee, buy better coffee. Even an expensive bag of good coffee will be cheaper than buying it out five days a week.
Mint shows you where you’re leaking money so you can take steps to plug the leaks.
- Make a Budget
Now that you can see where your money is going, you need to take control of that. That’s what a budget is for. Within Mint you can set up budget categories like rent, utilities, food, entertainment, etc. and Mint will categorize your transactions appropriately. You’ll have your set expenses like rent, but it’s up to you to decide how much to budget for non-essentials like eating out and entertainment.
If you have no idea where to start, the 50/30/20 rule is a handy guide. 50% of your income is budgeted for essential living expenses, 30% is for discretionary spending on things like vacations and eating out, and the remaining 20% is for financial goals like investing and paying off debt.
- Pay Yourself First, Automatically
We all have good intentions when it comes to saving money, but unless you make it a priority, you may never actually do it. The end of the month comes, and the money you meant to save is gone. That’s why you have to pay yourself first and make it automatic. You can’t spend what you don’t see.
There are a few ways to do this. If your employer offers a 401k, this is a great way to save. The money is deducted from your check and invested before it hits your bank account. You can open an investing account with Betterment and set up auto deposits. Every month (or however often you chose), Betterment will automatically deduct an amount of money you choose from your checking or savings account and invest it. You even get a small discount on Betterment’s already small fee when you sign up for auto deposits.
- The 30 Day Rule
This rule is especially helpful for those of us who are impulse spenders. Set a dollar amount, not $5 or $10, remember, we’re trying to save real money, more like $100. If you want to buy something that costs $100 or more, write it down.
In 30 days, if you still want it, you can buy it. But more often than not, you won’t still want it, or even remember you wanted it in the first place.
- Get Creative
If you and your partner or friends want to go out, what do you do? Drinks, dinner, drinks and dinner? That starts to add up not to mention becomes repetitive. There are a million other things to do that don’t cost much or any money.
- Walk in the park
- Visit a museum or art gallery
- Play mini golf
- Go bowling
- Order some pizza and buy some wine and invite people over for a game night
- Throw a potluck, you buy the booze and everyone else brings the food
- Go to the zoo or botanical gardens
The fun you have is not correlated to the money you spend.
- Declare a Moratorium on Gifts
How much money do you spend on gifts every year? Probably hundreds of dollars, maybe more. Declare a moratorium on gifts. Now, there are some gifts you probably still have to buy if you don’t want to alienate very close family so we’ll leave them out of it.
But what about birthday and Christmas gifts for friends and co-workers, baby and wedding shower gifts for second cousins you haven’t seen in 15 years. You can say no to that stuff, you really can. Just explain that things are tight and you’d rather not exchange gifts, or you can’t attend the event.
Two things will happen. First, you’ll have more money, and second, those people will be relieved! No one likes buying gifts for co-workers and your second cousins didn’t really want to invite you to their wedding, their mother and yours made them.
- Shop Around
There are so many banks, credit cards, various kinds of insurance and utility providers. Whatever you’re paying for those things, you can probably pay less. No one should pay bank fees. They are loaning out your money making a killing while paying you a paltry 0.01% interest rate.
Stop using those greedy, old school brick and mortar banks and switch to an online bank like Chime. Chime doesn’t charge any of those ridiculous fees like low account balance, account maintenance or even bounced check fees.
If you have homeowners, life, health or auto insurance, use a site like Insurance.com to shop for better rates. How much is your cell phone bill each month? We bet it’s more than the $90 Republic Wireless charges for their most expensive plan. Their cheapest plan is just $20 a month!
If you have more than one cable and internet provider in your area, see what the competition is offering new customers, call up your current provider and tell them you want that price, or you’ll leave. If you don’t have a choice, you can still save.
Become a cord cutter, get rid of cable and instead use streaming services like Netflix and Hulu. Even if you bought a subscription to all of them, it would be cheaper than your current cable bill.
If you think you’re paying too much for internet, let Trim negotiate a lower bill for you. If they’re successful, they charge you just 25% of what they saved you for one year.
That wasn’t so bad. We saved some real money with very little effort and not much sacrifice in our quality of life. Next, we’ll show you seven ways to make money! Stay tuned.