In today's economy, everyone is struggling to get ahead. Even that person with the cool Lexus down the street might be secretly worried about having it repossessed. A recent study by Bankrate discovered that 65% of Americans save almost nothing from their salary, while 19% don't save any money at all. With the rising cost of rent and taxes, it's not that hard to see why this is the norm. Unfortunately, these behaviors have consequences for retirement. With not enough savings, many elderly people will be forced to continue working.
Netizens of the web share what steps they took to better their financial state, and these are some of the best responses. As you might expect, a lot of them are pretty obvious, if you think about it. From simple day-to-day tactics to more advanced practices, you'll learn how to save money in new ways. Remember, everyone has a different situation, so find a path that works for you.
Don't forget to check the comment section below the article for more interesting stories!
#37 Gifting Made Easy
Instead of spending a ridiculous amount of money on presents each year for birthdays and holidays, make your own. You don't even realize how expensive they are and how much money will be saved. Homemade gifts show you care and help the bank account too! Win-win.
#36 Swagger Jacker
If your bills are too expensive and you find yourself unhappy doing what you need to do to pay them down, lower your costs. Do you really need that new Lexus, or can you part with the Corolla. How about that new Hugo Boss suit? Try renting one instead. Saving money is easy, lowering your swag levels is not for a lot of people it seems.
#35 Cash Is King
Don't bring your credit card with you when you go out. Just bring some emergency money; like, enough to get a taxi. Or, if you want to go shopping, bring as much as you are willing to let yourself spend. Impulse buys are killer.
#34 Split It Up
Set up your big monthly bill payments so that you pay them one paycheck ahead. Also, think about splitting your largest monthly payments (like rent or student loans) between two paychecks to even out cash flow during the month.
#33 Dismantle Destructive Debt
Payout ALL high-interest debts ASAP. Student loans may be an exception as rates are likely relatively low anyway. Carrying a mortgage may also make sense.
On the flip side, if you carry a credit card balance, you are getting gouged! If you can't pay off ALL your credit card balances down to $0 every month, your spending is too high.
If you pay down debt with a 10% interest rate, that money is, in effect, earning 10% tax-free.
#32 Everything's An Investment
Stop thinking about money as the only form of currency. Everything you consider purchasing is an investment.
For example, you've got $20 and you're thinking about ordering food. What does eating out buy you? In what way does eating out improve your circumstance? It provides relaxation for a few hours. How important to your goals is that small, temporary reduction in stress? The same money can also buy one of those foot massagers with the rollers. What does that investment buy you? A lot more relaxation than a meal out and it's better for your health.
You don't buy good/services; you buy investments. And investments buy you intangibles. This is a mentality that serves you in every class of wealth.
#31 Stock Up For The Future
Take advantage of your employer's 401k or stock purchase plans. My company matches 3% company stock purchases so last year I made $5,000 in free money. I can't believe there are like, 40% of employees in my company who don't understand the concept.
#30 A Mad Dash
Get a dash cam—with the number of stupid drivers on the street, insurance fraud going on, and the threat of a rise in your insurance costs, a dash came is a worthwhile asset and it's inexpensive too.
#29 Head On Collision
If your car is worth less than a few thousand dollars (and you aren't making payments on it), drop collision coverage. I have a car with a KBB value of only a few thousand dollars, and I realized that with the money I saved by dropping, I would save more than the value of the car itself within a couple of years. You have to keep liability coverage, and I would still keep comprehensive as that covers situations beyond your control. It's also pretty inexpensive, even for high-risk drivers. If you pocket the money you save, you could either purchase a cheap used car in cash a few years down the road, or you could pay to repair the car if, God-forbid, there were an at-fault accident.
Granted, in my case, it helps that the car I'm referring to is my "winter beater", so for eight months of the year, it only gets driven a couple of times a month, greatly limiting my opportunities to get in a collision while driving it.
#28 Saving For Fido
Just put a little away in savings. I started doing $21 a week, and it may not seem like much, but it's been there to help with something like an unexpected vet visit.
#27 Be Your Own Chef
Cook meals yourself. At $25 a day for two fast food meals, you can save $5,000 a year post-tax. That's like, a $9,000 bonus on your paycheck.
#26 Lose The Soda
Drop the soda. One six pack of Coca Cola is around $9.99. Once you start adding holidays or random nights with friends, the total increases dramatically per year. That's one expense you could give up. Just my opinion.
#25 Clear That Browser History
Always make a website forget your credit card number if it automatically saves it. For me, it’s a pain to have to put it all in again and makes me think about if I want to buy an item as I’m doing it.
#24 Can You Hear Me Now?
Switch your cell phone service provider to a cheaper MVNO that uses the same towers without sacrificing the quality of services. For example, Total Wireless through Walmart uses Verizon towers.
Also, make a habit of checking Craigslist and Facebook marketplace for items that people buy but don't often use before buying new: exercise equipment, camping gear, furniture, etc.
#23 Keep Your Eyes Peeled
Check your balances regularly. Watching your savings go up (even if very slowly) and keeping your checking account from dropping to zero is a form of cheerleading for yourself. Most people would rather forget about their finances. This keeps them in your mind and reminds you why you’re out there working and denying yourself certain luxuries.
#22 A Penny For Your Thoughts
My friend's father once said: "Watch the pennies. The big dollars will take care of themselves." What he meant was, watch the little things you buy (fast food is a perfect example). Those little impulse purchases are where your money is going.
Save it. Then invest it. Watch it grow.
#21 You Need A Budget
The thing that made the most difference to me was discovering YNAB. The fact that you have to assign each dollar you have to something opens your eyes to where your money is going. Also, if you decide to manually enter in each transaction you make (I recommend the manual option vs. automatic), the simple act of having to enter each of your transactions will naturally make you not want to spend that extra money. It’s weird, but it works. I recommend it to everyone!
#20 Climb That Ladder
Work hard and make good career choices. It’s easier to choose a more lucrative career than to budget your way into wealth. Making a middling salary only gets you so far since you can’t exactly save more money than you make.
#19 Double Trouble
Pay off high-interest credit debt ASAP. A card with 18% interest doubles your balance every four years.
#18 No Cell Phones Allowed
Use your public library. They have movies, music, TV shows, and the internet. Mine just got a new tech lab for higher learning activities. It's saved quite a bit on entertainment.
#17 Double The Work
Open two bank accounts, and send 10 to 30% of your pay to the secondary account through direct deposit.
#16 Splitting Those Checks
For those getting paid bi-weekly (not bi-monthly): On loans that allow it, pay half of them every pay period. The first payment goes to interest and principle, and the second payment goes to principle only.
By the end of the year, you’ll have paid two extra payments and shortened the life of the loans. On a 30-year fixed mortgage, you’re cutting off something like ten years. On a 5-year car loan, it’s like cutting off 1-2 years. That's tons of money saved with little effort. You won’t even miss it if you have auto payments set up.
#15 Gonna Pop Some Tags
Purchase clothes off-season. This extends into safety gear too. You can get the nicest winter gloves in the springtime for $12-15. Short sleeve dress shirts are pennies in the fall. If you're not a dedicated fashionista, your taste won't vary radically over five to seven months.
#14 It's Not Delivery
Never order food delivery. Do you want a pizza for your party? Sweet, order it for takeout instead of delivery and drive your butt to Dominos.
#13 A Quicker Commute
Move closer to work or school, so you can get there comfortably for free, whether it be via foot or bike. The time spent on a longer commute can now be spent earning money, playing sports, watching YouTube, whatever.
Also, live with roommates or a significant other in a house of the size you can afford. For most people, this means living in a smaller but higher quality space. With more people sharing the rent, the benefits are enormous.
Monthly housing AND transportation costs plummet.
#12 Eating Your Money
Many years ago I used to work as a credit counselor. With almost 100% of my clients, the biggest "where is my money going every month?" issue that everyone had and could never figure out was eating out.
Sitting down and doing the math on how much $5 to $10 spent daily adds up to throughout one, three, and six months was a huge eye-opener for most people.
#11 Raise For A Raise
If you work for the government or are in the military, you get an annual raise of a few percentage points on the first of every year. Raise your retirement plan contribution by the raise percentage.
After a few years and hopefully a promotion or two, you effortlessly max out your Thrift Savings Plan.
Invest the money in the target fund of the decade when you'll turn 60.
#10 Free Entertainment For Everyone
If you have a shopping problem:
Set up an auto transfer to pay off your entire credit card balance every month. Stop shopping when you're bored or don't have a plan.
Don't think of shopping as entertainment, find something else to get that retail fix, like downloading free apps or free Steam games. Use the library or free internet radio for your entertainment. There is so much free content on the internet.
Don't close cards, because you need running credit to have a good credit score. But put them in a drawer at home instead of in your wallet and only use them as often as the terms say you need to keep them active. Some people freeze their cards in ice in the freezer to keep from temptation.
#9 Going Cold Turkey
Stop getting takeout. My wife and I still struggle with this, but the biggest motivator for us is the money. One Chinese takeout meal can cost $80 alone if you're the type to splurge. Also, it's incredibly unhealthy for you.
#8 Goodbye, Netflix
Review all of your monthly subscriptions and cancel any you have doubts about.
#7 A Better Retirement
For every raise you get, divert half of it towards retirement starting at the very first paycheck (at least until you are contributing 15%). This way, you still get a raise but advance your retirement interests painlessly.
#6 Saying "I Do" To Their Wallet
Don't marry someone broke. Women have known this for a long time, but guys like to pretend it doesn't matter. It doesn't help that women will give you heck if you tell them you're looking for someone who earns as much as you do.
Honestly, though, the partner you choose is the second most financially impactful decision you will make in your life after your career.
#5 Total Shutdown
Keep your thermostat set a few degrees higher than your ideal in the summer and lower in the winter. You’ll adjust to it eventually.
If your oven is next to your refrigerator and you are only cooking for only one or two people, then invest in a toaster oven since there is no need to heat all of that extra space in the oven when you’re just making a small amount of food. And if it is next to the refrigerator, then that will get hot too and have to run more often to stay cold.
Additionally, one tip that people tend to overlook is turning everything off! Are you leaving the room? Light off. Daytime? Light off. Are you going to bed? Shut down the computer. Even in sleep mode, those things can drain electricity.
#4 Making A List And Checking It Twice
I only allow myself to make online purchases (e.g., from Amazon) on the first day of the month.
I keep a list of what I might want throughout the month, not in my Amazon cart but on a sheet of paper. Then, when it comes to the 1st, I take a hard look at that list and ask what I want and can afford.
This has helped me cut WAY, WAY down on online impulse purchases, which add up FAST.
#3 Remove Vices
Just because you can afford the payments doesn't mean you should get it. "I can afford this new iPhone X because it only adds $49.91 to my bill (for two years)." Do you need a $1197.84 smartphone? Because whether you finance it at 0% interest or not, a $1,200 phone is a $1,200 phone. This principle also applies to cars, houses, anything.
I save money like I lose weight: pick one thing, downsize it, see if you can live with the results, then repeat. I am used to drinking three cans of Diet Coke a day, for example. The $0.33/can average price isn't much, but I was annoyed at having to buy pop so often. So I replaced one can with a thermos of water from home. Slightly healthier, slightly fewer trips to the store... Oh, and that one can a day adds up to $120.45 for the year. Then, I moved on to eating slightly less cereal, skipping the post-dinner snack, etc. It was a lot easier than doing stuff "cold turkey," and the odds increase that the change of habit sticks, at least for me.
#2 Saving Big At The Supermarket
Coupons. It is so easy now, especially with digital couponing. For example, if I know I'm out of body wash, I'll scroll through my Walgreens app and see if I can get $2 off some soap. All I need to do is click a button. I save at least ten bucks every time I go grocery shopping now and doesn't take very long to figure out.
#1 Based On Principle
If you have an auto loan (I specify auto because I don’t know if other loans let you do this) see if you can pay extra on the principal part of the loan. Pay that off early, and you can save on paying some of the interest.
In my case, I used a 0% interest credit card to pay off all of the principal at once. I saved over $1,000 by not having to pay the interest.
