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- Eat out less
- Cancel subscriptions
- Get cash back
- Create a budget
- Start investing
- Automate your savings
- Pay off debt
- Do it yourself (DIY)
- Reduce energy consumption
- Limit convenience spending
- Eat out less
Eating out costs around $300 per month, or 5% of the average household, according to BLS. If your spending is at or above the national average, then reducing spending on eating out could save you hundreds of dollars per month and over $3,000 per year. To get started, we recommend tracking your spending on eating out. For apps that can help with this, check out “5 of the Best Budgeting Apps in 2023”. Once you understand your current spending, the next step is to decide how to start saving money, and when it comes to eating out, there are multiple options to choose from. One option is to create meal plans and start cooking at home more.
If you want to start eating at home more, check out Blue Apron. Blue Apron is a meal kit service that can help with meal planning, ingredients and cooking instructions. avoiding food waste. Another option is to only eat out when you can get a discount. Blue Apron can also help you reduce food waste and grocery costs since you are only paying for the ingredients required for the number of meals you choose to make.
Another way to save money on eating out is to only eat out when you can receive a discount or cash back. Dosh is a great app for getting cash back at qualifying restaurants. You can earn up to 5-10% cash back and start receiving payments once your wallet reaches $25. Payments can be transferred to your bank, PayPal, or Venmo account.
- Cancel subscriptions
Many companies now have subscription-based business models, which means that they charge a recurring fee for access to their products and services. These recurring fees may seem small on a monthly basis, but they can add up to a lot of money and can really get in the way of reaching savings goals if they aren’t managed carefully. Tracking your monthly spending will help you get a full picture of your subscription costs so that you can decide which ones to cancel to save more money.
There are a number of free tools that can help you manage your subscriptions. One of them is Rocket Money, which is a free app that can use your bank account statements to identify subscriptions and summarize them in a dashboard. Once all of your subscriptions are identified, you can either cancel them on your own or you can upgrade to a premium account to have rocket money cancel the subscriptions for you. Another great tool for canceling subscriptions is Trim. Trim is a web-based tool that can review connected bank and credit card accounts in order to create a list of all your subscriptions, and can even cancel them for free. Trim offers another service to negotiate lower subscription fees, but does charge 15% of the savings from negotiated payment reductions.
- Get cash back
Getting cash back on purchases can easily save you hundreds of dollars every year. The way cash back works is that credit card card and other financial technology companies will give you money back for using their service to make your purchases. Cash back rewards often range from 1% to 5% on qualifying purchases, and payout methods often include bank account deposits, PayPal, Venmo and/or checks. Cash back is a really easy way to save money since all you need to do is buy an eligible item with your credit card or by using a cash back app and you will start earning money. Check out “6 Best Cash Back Apps in 2023” for more info on how to get the most cash back on all your purchases.
- Create a budget
Budgets are essential for saving money since they help with both tracking spending and setting goals. Using a budget to understand current spending habits will help with understanding where money is being overspent. Budgets can also incorporate your saving goals and can be used to track progress toward achieving those goals. There are several different methods to choose from when creating a budget. Check out our post on “The 3 Best Ways to Budget Your Money” for more info. There are also many different tools available for each of these budgeting methods, which are described in our list of the “6 Best Budgeting Apps for Saving Money”.
- Start investing
Investing has the potential to generate greater returns over time than any other saving method. The average stock market investment yield over the past 30 years is nearly 10%, which is higher than savings account, high yield savings account (HYSA), bond, and certificate of deposit (CD) yields. There are a number of easy ways to get started. One way may already be available through a current employer, which is a 401k retirement account. A 401k is a pre-tax investment account that is offered by many employers and often comes with employer matches on contributions, so be sure to maximize that benefit if it is available to you. Other ways to invest and save more money include opening a traditional or Roth individual retirement account (IRA) and opening an individual brokerage account. Check out “4 Best Ways To Invest Your Money” and “5 Best Investing Apps” for simple steps you can take right now to save more money just by investing money that you already have.
- Automate your savings
Automating savings transfers is one of the easiest and most effective ways to save money. Automated savings features are available for free with many types of bank accounts. All that is required is an initial setup to specify the amount to be saved and the frequency for that amount to be transferred (e.g. $100 per month). This type of saving method does not require any active involvement once it is set up and it guarantees a certain amount of money is saved every month to help you reach your savings goals quicker. Check out “Automate Your Savings with These Apps” to get started now.
7. Pay off debt
Paying off debt is a great way to save more money since debt can be one of the biggest obstacles in the way of achieving important savings goals. The main ways debt can get in the way of saving money are that recurring payments are required until the debt is fully repaid instead of being able to save that money, and you will also typically have to pay interest every month based on the remaining principal balance of the loan and the interest rate for that loan. Interest is often charged by financial institutions that lend money as a reimbursement for the risk the institution takes by lending their money and for the opportunity cost associated with not being able to do something else with that money. We recommend avoiding and minimizing interest charges as much as possible so that you can save more money, and even earn your own interest using high-yield savings accounts and investments. For a list of apps that can help you create a plan to pay off all your debt, check out our “5 Best Debt Elimination Apps”.
8. Do it yourself (DIY)
According to the US Census Bureau’s 2019 American Housing Survey, professional home improvements can cost double or even triple the cost of a DIY project. For larger projects, the savings for DIY can be thousands and potentially even tens of thousands of dollars. One hidden cost for DIY projects is that they will likely require much more time, but the decision to DIY instead of hiring a professional could still be worth it if you are able to invest the necessary amount of time in research, preparation, and completion of the project in order to achieve a high-quality result.
There are several resources out there that can help you get started, including Family Handyman, This Old House, and Apartment Therapy. Another added benefit of doing DIY projects is that it can help you learn new skills that could lead to new income streams, like freelance house jobs on Fiverr or Upwork.
9. Reduce energy consumption
According to the Department of Energy, energy bills can be reduced by 10% or more by making your home more energy efficient. Some easy things you can do to increase your home’s energy efficiency are to seal any cracks in window frames, door frames, and other areas where air could escape. Another way to make your home more energy efficient is to upgrade insulation, windows, HVAC systems, and appliances to make efficient versions.
A less well-known, but also significant way to reduce your home’s energy costs us to unplug what are referred to as “energy vampires”. Energy vampires are appliances that can use electricity while plugged into an electrical outlet even while not in use and turned off. Common energy vampires include hair dryers, coffeemakers, computers, and printers. Unplugging energy vampires can reduce home energy costs on the order of tens of dollars a year or more.
10. Limit convenience spending
There are more conveniences in life than ever before. Some of the most popular convenience services include eating out, grocery delivery, pet services, subscription boxes, lawn care, house cleaning, and ridesharing. It can be very tempting to pay someone else to do menial tasks in order to focus more time and effort on other things, but these short term conveniences can become a large financial inconvenience in the long run.
Convenience spending can quickly add up to thousands of dollars per year, which means that decreasing convenience spending can lead to thousands of dollars in savings per year.The first step to reducing convenience spending is to track it to understand how much you are spending. The next step is to set a savings goal. After that, you can determine how much you need to decrease convenience spending in order to achieve that goal by creating a budget. To learn more about how to create a budget that will help you decrease convenience spending and save more money, check out “3 Best Ways to Budget Your Money”.