If you want more money to spend and stash away for the future, you’ll need to start saving. Yet, the average American household saved just 4.6% of its monthly disposable income in May — way below the average of 8.9% measured since 1959. To achieve financial freedom and secure your future, you must start saving some time. Many young people don’t know where to begin the journey to financial emancipation. Which is why we’ve compiled the top 10 brilliant money-saving tips to get you going.
Why should you save money?
You can’t plan everything in life. Even the best plans can go awry. If you have an emergency fund, you have a safety net when faced with unexpected expenses like medical bills or car repairs.
Money is also necessary for achieving long-term goals. Whether you’re saving for the down payment on a home or a holiday abroad, savings can help you realize your dreams. Starting early and saving consistently can also fund a comfortable and financially stable retirement.
Be sure to read our blog on Benefits of Savings Accounts.
10 money-saving tips you should consider
Start your journey to financial independence with these simple money-saving tips.
1. Determine your saving goals
Set yourself up to success by thoughtfully considering your financial situation and aspirations and set up money-saving short and long-term goals to suit. Assess your current financial situation, define your priorities, and set measurable goals to track progress and stay motivated easily.
Use our free savings calculator* to estimate your savings!
See how much you can save
Use our free savings calculator to estimate your investment growth over time.
Save for (years)
Future projections based on your selections
*The estimated projections are hypothetical in nature and do not guarantee future results.
2. Create a budget and stick to it
A budget will help you manage your expenses, but sticking to it is the most important part. Start by identifying your sources of income and spending and choose a budgeting method such as:
- 70/20/10 budget rule: Spend 70% on needs, 20% on wants, and save 10% of your after-tax income.
- Zero-based budgeting: Allocate every dollar to a purpose.
- Envelope budgeting: Use cash or digital envelopes to spread funds among needs and wants.
3. Automate your savings
Automating your savings is a great way to make the process easier and more consistent. You can set up a direct deposit of your paycheck into a savings account, send automatic transfers from a checking account into your savings account on your chosen dates, and automatically contribute to employer-sponsored retirement accounts.
4. Pay off debts
Debt incurs interest, which accumulates over time and increases your borrowing costs. Pay your debts, and you’ll reduce or eliminate the interest cost. You can then reallocate money saved to your savings account. Paying off your debts can also help improve your credit score, resulting in lower interest rates in the future.
Another strategy to pay off debt faster and save money on interest is to consolidate your debt into a single payment with a personal loan. A personal loan is a type of loan that allows you to borrow money and pay it back in fixed monthly installments over a set period of time.
By consolidating your debt with a personal loan, you can help simplify your finances and reduce your stress. Instead of juggling multiple payments and due dates, you only have to make one payment each month.
But where can you find a personal loan that suits your needs and budget? That’s where MoneyLion comes in.
MoneyLion offers a service to help you find personal loan offers based on the info you provide, you can get matched with offers for up to $50,000 from top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you. You can also use the loan funds to pay off other existing debts.**
MoneyLion is here to help.
5. Cut out unnecessary expenses
Carefully examine your spending to see where you can cut costs. You may have monthly fee deductions like subscriptions that you don’t use. Eating out is also significantly more expensive than cooking food at home.
6. Use cash instead of a credit card
Research shows that people spend significantly more when they use a credit card. This additional expenditure is quite apart from the interest you pay on the card unless you settle it in full at the end of every month. Stick to cash payments to control your spending and save.
7. Shop in thrift stores or consignment shops
Thrift stores and consignment shops sell used items at significantly lower prices. You’ll find clothing, furniture, electronics, and books at a fraction of the original cost.
Secondhand has become very popular as an eco-friendly choice. Second-hand purchases reduce the need for manufacturing, decreasing resource consumption. You can also use thrift shops to sell your gently used items and recover some of their value.
8. Create meal plans
Use meal plans to make your shopping lists and ensure no food waste. By planning your meals, you can use the fresh produce before it wilts and spoils. Meal plans will also help you shop mindfully and cut out impulse buys.
9. Follow the 48-hour rule
The 48-hour rule is a technique that encourages you to wait a while, usually 48 hours, before making a significant purchase. The aim is to give you time to evaluate whether the purchase is necessary and to consider the consequences.
10. Add more sources of income
Consider finding new income sources. Take a second job, do some online work, or earn money as an affiliate marketer. Some people are lucky enough to have a hobby from which they can earn money. Consider your skills and whether you can make extra income in your spare time.
It could be as easy as earning additional income by doing surveys and playing games with Kashkick**!
Additional money-saving tips
Here are yet more ideas on how to save. If you’re still looking for more tips, make sure to stay updated on MoneyLion’s blog for the latest money saving hacks.
Be mindful of your utility consumption
Utility bills can silently accumulate. Don’t leave lights or other electrical equipment on when not in use. Consider taking a short shower rather than a long, soaking bath. You may be surprised at how much you save on utilities when you take a considered approach to consumption.
Find lower car insurance
Car insurance costs can vary significantly depending on various factors. This can range from the type of coverage you choose to your driving record or the type of vehicle you opt for. Generally, the more comprehensive the car insurance coverage, the higher the premium you could expect to pay.
Remember that each car insurance company has its own pricing structure and policies, so it’s crucial to explore multiple options to find the best deal for you. The internet has made it easier than ever to get quotes from various insurers, allowing you to compare prices and coverage effortlessly.
Moneylion also offers an alternative way to help reduce your insurance cost that factors in your actual driving with Driver Score***. Search hundreds of insurers and find savings in seconds. Plus get free support when you make the switch.
Another strategy is to consider raising your deductible. Your deductible is the amount you’re responsible for paying out of pocket before your insurance coverage kicks in. By opting for a higher deductible, you may be able to significantly lower your premiums. Just make sure you have enough savings to cover the higher deductible in case of an accident.
Use public transportation or carpool
How much could you save by using shared transport? Get together with colleagues to carpool or buy a season ticket for public transport. You may lose a little flexibility, but you could save a fair amount of money.
Clean up your email subscriptions
Email subscriptions to brands/products can lead to impulse buying. Sales news pops up in your email, and suddenly you’re compelled to buy that bargain jacket you don’t need. Clear out the subscriptions and remove the temptation to spend.
Collect your change
Create a piggy bank — a jar with a slot in the lid does the job. Throw all your change into the bottle. You won’t miss it, and you’ll be surprised at how quickly the coins accumulate into a fair sum of money.
Avoid unnecessary ATM fees
Most banks have a network of ATMs where you can withdraw cash without incurring additional fees. Check your bank’s website or mobile app to locate the nearest ATM within your network.
Ask for cash back when using a debit card at retailers and avoid ATM fees. Explore online banking options and make electronic payments instead of relying on cash.
Ignore your raise
If you receive a raise, continue to live on the amount you previously earned. Place the extra money into a savings account. You didn’t have that money before so you won’t miss it now.
MoneyLion offers a convenient marketplace to compare high-yield savings accounts from our trusted partners that could help grow your money.**
Borrow books from the library
Even if you’re an avid reader, you don’t have to buy books. Most cities and towns have well-stocked libraries, and you should find what you’re looking for on the shelves of your local library at no cost.
Change phone plans
Do you really need the phone plan you currently have? Analyze your data and telephone needs and consider downgrading your plan to something more affordable. Then, put the price difference into your savings account.
Be creative with gift-giving
The New York Post reported last year that 62% of Americans wanted to be the best gift giver. 61% worried about being out-gifted. With this much competition, you may be tempted to overspend during the holiday season. Don’t put your savings at risk. Get creative. Consider making gifts for family and friends. They’ll appreciate the thought and effort you’ve put into creating the gift.
Transport and accommodation are significantly cheaper in the off-season. If at all possible, plan to travel during this time to take advantage of the lower prices. Tourist attractions are also a lot less crowded out of season.
Take advantage of rewards
Credit card and loyalty rewards are an excellent way to save money and enjoy some extra perks along the way. If you are a frequent Starbucks customer, for example, you can accumulate points with their loyalty program and earn a free coffee or other rewards. This not only ensures that you can enjoy your favorite beverage for free, but it also adds up to significant savings over time.
Moreover, credit card rewards can extend far beyond the realm of coffee. Many credit card companies offer travel rewards in the form of miles or points that can be redeemed for flights, hotel stays, and car rentals. By responsibly using a rewards credit card for your everyday purchases, you can accumulate these rewards and enjoy discounted or even free travel experiences.
There’s no shortage of opportunities to save with credit card rewards, so make sure to do your research! Be sure to also check our blog for Small Ways to Save Big!
Plan for the Future – Start Saving Today
Saving money doesn’t mean you have to deprive yourself. It’s about finding a balance between spending and saving. Consider your financial goals and make informed decisions to secure your future as you enjoy the present. By following the tips outlined above, you’re sure to be on your way to a tighter budget!
Is it really possible to save money on a tight budget?
It is possible to save money on a tight budget. When you analyze your expenses, you may be surprised at how much money you waste each month.
Are there any overlooked expenses that you should be mindful of when trying to save money?
You may have overlooked certain expenses. Analyze your bank statement to find monthly expenditures like subscriptions you can cancel.
What are some common mistakes people make when trying to save money, and how can you avoid them?
Don’t needlessly deprive yourself. Find a balance between enjoying life now and saving for the future.