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.
- Make it Blooom
Do you have a 401k? If you do, you might not be getting the most out of it. Fees can eat up a huge chunk of your retirement savings over time.
Blooom can help manage your 401k and show you how much you’re currently paying in fees and the changes you can make to lower your fees.
- Get Cash Back
No matter how much we want to save money, we still have things we need to buy. Getting cash back when you shop is a great tool to help you save money. Apps like Dosh help you save when you shop online and in store.
Paribus and Earny can get you cash back on things you’ve already purchased. The apps scan your receipts and negotiate a price matching refund when it sees a price drop.
- Get a Better Bank
If you’re still using a brick and mortar bank, you’re probably paying all kinds of fees, and you may not even realize it. You won’t have all those nasty fees with Aspiration.
Aspiration is an online bank that doesn’t charge monthly, ATM, or overdraft fees on debit card purchases. Aspiration also has better interest rates than most banks, starting at 0.25%. The average interest rate on a bank account is a meager 0.06%, so Aspiration helps you save and make money!
- Reduce Your Interest Rates
Interest is one of the most expensive things in life, and even a small reduction in the interest rate on a loan can save you thousands of dollars. If you have student loan debt, refinancing them can be a great money saver.
Credible lets you shop around for the best interest rates for the student loans you already have. Through Credible, you can find fixed rates starting at 3.50% APR and variable rates starting at just 2.14%.
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.