Are you looking for ways to save more money? If not, you absolutely should be. No matter how much you earn, limiting financial waste and living frugally will always leave you better off.
When you save more money, you have a lot more money to invest, after all. And, if you’re able to save a ton of cash over the long haul, you can use those savings and the magic of compound interest to grow absolutely rich.
Also, keep in mind that frugality is important for everyone – even the rich.
Case in point: We recently did financial planning for a client who makes a lot of money – I mean a lot of money. While their incomes fluctuated, this couple’s annual earnings occasionally reached seven figures.
But, there was a problem; they spent most of the money they made. Unfortunately, this describes pretty much everyone these days.
Fortunately, we were able to get our clients back on track in a hurry. As their financial planners, we combed over their spending to figure out where their money was going and to find opportunities for them to save more money. Not surprisingly, there were quite a few ways that they could whittle down their expenses.
Tips, Tricks & Experiments to Save Money
Today, I’m sharing some of these suggestions we made to them. While not all of these money-saving strategies will apply to you, many of them could. If you implement the tips that could work, you could potentially save a bundle.
Buy a car and stop leasing.
When it comes to saving money, some people just can’t give up their Lexus. And that might be okay as long as you’re not overspending to drive a fancy car.
To save money, it usually makes more sense to buy used – or even buy new – versus leasing a car. Run the numbers to figure out if leasing a car makes sense for you in a financial sense.
Ideally, you’ll want to purchase a car you can keep for the long run. Why? Because, if you pay a typical car payment long enough, you will eventually own your vehicle free and clear. With leasing, however, you will never own your vehicle. You’ll have to make monthly payments in perpetuity, and you won’t build any equity along the way.
The bottom line: Stop leasing! Buy a car instead, and look for those models dependable enough you can keep them for a decade or longer. Check out Consumer Reports for the most up-to-date information.
Stop overspending on clothing.
Do you really need new clothes? Maybe. Maybe not. Consider challenging yourself to see if you can just stop buying clothing for a while. Imagine what could happen if you don’t buy new clothes for a year! You could save all kinds of cash, and you could learn to get creative with the pieces you already have. Best of all, you could save time because you wouldn’t feel obligated to go to the mall all the time.
Remember that clothing is a terrible investment. Unless you’re buying a vintage Gucci dress or some other antique, the clothes you buy will be worth almost nothing once you cut off the tags and wear them out of the house.
Watch your entertainment budget.
Does it cost money to have fun? Sometimes it absolutely does. You have to pay to get into a concert, after all, and nobody is going to let you into your local theme park for free. Then again, there are plenty of ways to have fun for free if you’re willing to think outside the box and get creative.
If you’re angling to save money this year, try experimenting with a $0 entertainment budget! See how much fun you can have without spending any money. Some fun (and free) things to do include:
- going to the beach
- going for a bike ride
- going to the library
- building a fort out of couch cushions
- finding a Meetup group that matches your interests
- hiking in your area
- visiting a local museum on “free day”
- taking your kids to the park
- playing a board game
You get the point. There are plenty of ways to save money and still have fun, so don’t let anyone convince you otherwise.
Cut down on dining out.
It’s astonishing how much eating out can eat up your budget! Just one meal out translates to many, many meals cooked at home. If you’re not sure how to get out of the dining out trap, start by looking up easy recipes online. While it can be difficult to learn how to cook if you don’t have a lot of skills or time, there are plenty of recipes that are easy and nutritious.
If you need to make things as easy as possible, getting a crock pot or Instant Pot can also help. There are plenty of recipes for both that let you throw in your ingredients and push “start.” It doesn’t get any more convenient than that.
Confront your fancy friends.
The two tips we listed above – limiting dining out and cutting your entertainment budget – can be difficult to execute when you have other high-income friends. Just because you’re trying to save money doesn’t mean your friends are.
Unfortunately, peer pressure can be the death knell for your money-saving efforts if you’re not careful. That’s why, like it or not, you should probably tell your friends about your new spending and savings goals.
If you don’t, you’ll continue getting invitations to fancy dinners and parties that will throw your budget out of whack. By starting an honest conversation with your friends, you may convince them to choose frugal things to do with you. Instead of going out to dinner, for example, you can plan a potluck and card night!
Keep track of miscellaneous spending.
Sometimes, money disappears without us knowing where we spent it. This is usually because we get busy and spend without any sort of plan.
If you want to stay on track with your financial goals, it’s important to make sure you’re not wasting $20 here and $100 here until all your expendable income is gone each month. Here are some tips that can help:
- Track your expenses to see where your money is going. Find out if you really need what you’re buying.
- Get on a budget. Your budget doesn’t have to be complicated, but you should have a basic spending plan for the money you earn each month.
- Try to go cash or debit-only for a while. If credit cards make you overspend, you could try using cash or debit only for a while. Doing so forces you to accept the fact you’re spending money in that moment, while using plastic lets you forget until your bill comes due.
Find an alternative to cable television.
If you’re a millennial, you’ve likely never even paid a cable bill unless you’re a huge sports fan. But, even sports fans now have options for “cutting the cord” of the cable company.
If you’re tired of your pricey cable bill, consider ditching your cable company for Netflix, Hulu Plus, Amazon Prime & Sling. You can also get an over-the-air antenna to get FREE TV. Heck, you can even catch Sunday football games for free.
DIY your grunt work.
Why pay someone for something when you can do-it-yourself for free? If you’re forking over a ton of cash for a cleaning service, it can pay off to save that money and clean your own house for a while.
Got minors in the house? You could also put those kids to work! By assigning cleaning chores to your kids, you can teach them all about hard work. The experience of tidying up the house will also prepare them for when they’re out of the nest.
The same advice rings true for the other grunt work around the home, including gardening. Spend time in your own yard and you’ll receive several benefits. Not only will you get fresh air, but you’ll connect with the Earth and save money!
Analyze your travel budget.
You can spend a ton of money on vacation – or just a little bit. It all depends on your flexibility and your desire to save money. If your goal is spending less this year, however, there are all kinds of strategies to consider. Tips that can help reduce your travel budget this year include:
- Check out the Points Guy to learn how to score free travel. But, only do this if you are debt-free and able to handle using a credit card.
- Check out Secret Flying for airfare deals around the globe.
- Read up on travel hacks from an expert.
- Plan your vacation around the best value.
- Take an epic road trip!
- Check out state and national parks.
Pay off debt.
Far too many people pay only the minimums on their debts each month without ever taking the time to figure out what their debts cost. Unfortunately, this can lead to paying hundreds – or even thousands – of dollars in interest each month. Since interest payments don’t go toward the principal of your debts and add no value to your life, this is pretty much money down the drain.
If you really want to save money this year, one way to do it is to pay off debt. Imagine you have $10,000 in credit card debt at 18 percent APR and you’ve been paying $400 per month. At the rate you’re going, you’ll pay another $5,873 in interest and pay your debts off in around 161 months.
If you were able to pay off your $10,000 in credit card debt quickly by cutting your spending, on the other hand, you could avoid all those interest payments and free up $400 in extra cash every month. When you pay off high-interest debt, you just can’t lose.
Try Out New Ways to Save Money
If you’re looking for more ways to save money, don’t forget to think outside the box. Everyone’s spending habits are different, so it’s likely you’ll have some special circumstances in your life that could help you brainstorm more ways to save.
You may also want to start the process by tracking your spending for a while. Once you know where your money goes each month, it’s a lot easier to find the source of your money woes.