10 Ways to Save Money - AlwaysWealthy

10 Ways to Save Money

We all know saving money is important, yet many of us actually struggle to save money. The good news is that saving money doesn’t need to be ‘hard’. Saving money can be simple, and straightforward and you can get started today. In this article, we will discuss 10 ways to save money every month (even if you’re in debt or trying to save on a tight budget).

Table of Contents

Why You Need to Cut Your Debt to Save Money

10 ways to save money
10 ways to save money every month

Debt is unfortunately a very common fact of life, according to the CNBC the average American (aged 24-39) has $78,396 in debt.

Debt can be both good and bad. But, bad debt (like credit cards) can be really damaging to many aspects of one’s life, including one’s mental and physical well-being.

Debt often has the power to hold us, hostage, through high-interest rates that push people into a dependent cycle of continuous borrowing. This is known as the debt trap which completely stops people from prioritising let alone achieving their financial goals.

If you are in debt, the single most important thing you can focus on first before trying to save money is to cut your debt.

Imagine you have a credit card which has $10,000 debt at 16% interest. You would need to pay 24 monthly payments of $500 to clear this debt.

If you focus on paying that debt off, you will have $500 of extra income each month. This is $6,000 per year which can be put towards your savings goals. That’s a lot of money.

As you can see, debt can get in the way.

In order to make savings a priority, bad debt needs to pay off first.

The Importance of Setting Savings Goals

To even start saving money, you need to determine what you are saving money for. Setting savings goals will actually help you start, keep and reach your savings goals.

It sounds simple right, but why is it important?

Read more: The Importance of Saving Money

Setting savings goals will not only help you keep priorities in focus, but it will also help you define what’s important to you.

For example:

What’s more important: going out for dinner every weekend or a two-week vacation over the summer?

What’s more important: buying expensive clothes and shoes or paying off your credit card debt?

Having saving goals will allow you to prioritise what is most important to you. It will give you the ability to decide what you want to prioritise. You will no longer be making sacrifices, you will be making choices based on your goals.

According to a study conducted by Mark Murphy (SEO of Leadership IQ), “People who very vividly describe or picture their goals are anywhere from 1.2-1.4 times more likely to successfully accomplish their goals.”

That’s a big difference.

Are you ready to hit your savings goals out of the park?

First things first, write them down.

Why it’s Important to Reduce Your Expenses and Spending

When was the last time you looked over your weekly, monthly or yearly expenses? Do you even know what your basic expenses are? Many people don’t have an accurate overall view of their expenses or general spending.

Reducing expenses and unnecessary spending is one of the quickest ways to save money and help you hit your financial goals sooner.

If you don’t know where your money is going, what your basic expenses are or how you spend money in general, you won’t know where to start.

The best way to reduce your expenses and tighten up your spending is to start a budget. A budget will give you more control over your finances and allow you to reduce unnecessary expenses. A budget will show you exactly where your money is going and how you can improve your spending.

Having a budget will also allow you to determine how much you can save every month. This will in turn help you understand how quickly you can reach your financial goals.

Imagine you could cut your expenses and spending by $100-200 each month? That would be thousands of dollars per year in potential savings.

It’s time to map out your expenses and spending. Ready to continue with my favorite 10 ways to save money?

Cancel Automatic Subscriptions

Are you a victim of subscription creep? Do you even know how many subscriptions you have?

Don’t worry very few of us could answer this question.

We have subscriptions for so many things nowadays, video streaming, gym memberships, online storage, cell phone services, music streaming… the list goes (and as you may know it’s easy to lose track).

The good news is you can get back on track.

If you couldn’t answer the questions above, it’s time to ask yourself a simple question:

What subscriptions do I have?

While the task at hand may be a little more difficult, make sure you check your online banking, go back a few months and take note of any regular transactions that you don’t recognise.

Or you can use an app like Trim, which can analyse your transactions and find your recurring subscriptions (P.S. It’s Free).

Then, it’s time to review your list and cancel any subscriptions you don’t use on a regular basis.

Rule of thumb: if you can live without it, cancel it.

Why It’s Important to Automate Your Savings

Automating your savings is important because it will help you achieve the following:

It will save you a lot of time

We all like saving time right? Well thanks to technology, we can now set up automatic payments for important things like rent or bills. But more importantly, we can also set up automatic contributions to our savings. Start small, as soon as your paycheck hits your bank account, set up an automatic transfer to a savings account. Make saving a priority, not just at the end of the month.

It will reduce the temptation

Automating your finances will help you increase your discipline by reducing temptation. Once your income hits your bank account, it should be automatically dispersed into different accounts (expenses, savings, investment etc). Out of mind, out of sight = less temptation.

It will give you motivation

What do you feel when you see yourself progressing towards your goals? You feel motivated! Setting up automatic contributions to your savings accounts will help you grow your savings accounts consistently, meaning that your goals are consistently growing. If you allocate the same amount of savings every month, even if it’s just 5% of your income, it will be out of sight, out of mind but consistently growing.

You will see results

Automating your finances will allow you to move away from ‘I only save after monthly bills are paid to ‘contributions towards my savings are just another monthly expense’. This shift will force you to prioritise your savings and build better savings habits. (Tip: this is also referred to as ‘paying yourself first).

As you can see there are many advantages to putting your savings on autopilot. Why not start today?

Implement the 30-Day Rule

This rule is particularly useful for impulse spending. The 30-day rule is a trick to help you figure out and determine wants vs. needs.

For example, imagine you’re out shopping and you come across an item you think you need. Rather than buying this item straight away, you should walk away and wait 30 days. Once the 30 days have passed, you can revisit this item and ask yourself, do I still need it?

More often than not you might find that you’ve completely forgotten about the item or you might have come to the conclusion that you don’t actually need the item.

The 30-day rule is really just designed to bring more mindfulness to your spending habits and it’s a great way to help you save on unnecessary spending which in turn helps you save more money.

Let’s move on to the next tip in my ’10 ways to save money’ guide.

Use the 50/30/20 to Manage Your Budget

The 50/30/20 rule is a great guideline for allocating your budget.

It can often be confusing and overwhelming trying to figure out where to start. The 50/30/20 rule is so simple that it makes creating a budget easy.

Essentially the 50/30/20 rule works by allocating your after-tax income into 3 categories:

It is important to remember this is just a guideline for planning your budget, you may need to take other things into consideration and adjust depending on your personal circumstances. For example, if you have large financial goals coming up, 20% savings might not be enough, you might need 30-40% or more to hit your goals.

The reason the 50/30/20 rule works so well as a guideline is because most people save too little and spend too much, so using the 50/30/20 rule can help you become more aware of your financial habits, limit overspending and most importantly overcome under-saving.

Note: you will still need to track your budget.

The 50/30/20 rule is just one aspect of budgeting, so you will really need to track your spending in order to see whether you’re actually able to hit these percentages or whether you need to make some adjustments.

One of the top 10 ways to save money is actually often overlooked.

Consider How to Increase Your Earnings

Raise your hand if you could use a little bit more money?

Sometimes the best way to increase our savings capacity is to get creative with our earnings. Sure, a day job might help you cover the essentials and possibly save a little bit. But bumping your income by $500-$1000+ through a side hustle could be a game-changer in helping you boost your savings and achieve your financial goals.

P.S. A side hustle is just a word for making money outside of your 9-5 job. It may also be a way for you to pursue things you are passionate about.

A side hustle can really help you create financial space to buy the things you need (or want), lower financial pressure or concerns and help you increase your savings capacity.

Read more: 12 Best Online Businesses to Start

A side hustle could include doing freelance work in your area of expertise, it could be blogging, selling information products, becoming a virtual assistant or starting an online business. There are endless opportunities when it comes to starting a side hustle.

A side hustle is one of the best ways to boost the money in your pocket and start living a more financially free life.

Create Multiple Savings Accounts

You need to create multiple savings accounts!

Creating multiple savings accounts is a simple yet effective strategy to align your savings with your goals.

Creating multiple single savings accounts will allow you to set a goal for each account, watch your progress online and keep your goals in focus. For example, you might have savings account for the following: vacations, Christmas gifts, house renovations, investment property, new car etc.

If possible, you should name each savings account so that you are reminded of each goal you have, this should add an additional barrier to reduce the temptation to dip into and spend from these accounts.

Remember there is no magic number to how many single savings account you should have, this really boils down to your personal finances. However, you should make sure that you research your options and ensure that all your accounts are insured.

Use Money Saving Apps

Welcome to the era of mobile technology and mobile apps, there are literally endless apps available that can help us reach our goals with more ease.

There are apps for budgeting, goal setting, rounding up spending, investing spare change and so much more.

However, the key here is to find an app that best suits your financial needs and goals. Otherwise, it’s easy to get carried away and overwhelmed by the many apps available out there.

Imagine your goal is to start investing, but you only have a small budget each month to allocate to investing. You might consider looking into a spare change investment app to get started.

An app like ‘Acorns’, is beginner-friendly and is a very popular choice for spare change investing which works by allowing you to round up your purchases on a debit or credit card to the next dollar amount. The application then reverses the additional change and then that money is diverted into an investment portfolio.

However, it’s important to do your research and find apps that are suitable for your financial goals and always read the fine print! Those were my 10 ways to save money fast.

Summary: 10 Ways to Save Money

Sometimes the hardest thing about saving money is getting started. However getting started has never really been easier, there are so many simple and straightforward strategies to help you take that first step.

Remember saving is not a sprint, it’s a marathon and it’s never too late to get started.

I hope you enjoyed this post with my favorite 10 ways to save money.

May 3, 2022