No one ever said saving was fun or easy. And with the narrow gap between what people earn and what they spend, it seems harder than ever these days. Since we can all use a little extra inspiration every now and then to help us save, here are 10 simple tactics that can help get your savings plan on track.
This approach puts your savings more or less on autopilot. By setting up automatic transfers from your checking account to a dedicated savings account, either weekly or monthly, your savings will accumulate without you ever having to lift a finger. (Except for setup in the first place.)
This approach works especially well when you’re saving for specific goals, like vacations, emergency funds, or a home down payment. Just set aside an amount you can afford to withdraw from your checking account on a regular basis and watch the savings add up.
Plan ahead and eat more often
Doing some homework before you go grocery shopping can actually save you a surprising amount of money. Make a shopping list of items you really need and avoid impulse buying. Also, the savings from coupons and loyalty programs can really add up.
Another easy place to save is on the amount you spend on dining out, as meals at restaurants are invariably more expensive than cooking at home. If quitting is too hard, at least try to minimize the number of times you visit a restaurant or order deliveries. (And remember that skipping drinks at a restaurant can significantly reduce your bill.)
Watch your online purchase
We know this is easier said than done, but one way to go about it is to make the process a little more difficult. Don’t settle for saved billing information or auto-filled forms. Instead, manually enter all the required information for each order. (That doesn’t sound like much. But depending on how much you’re ordering, it can become a real-time burden that can discourage impulse buying.)
Also, consider using a private (or “incognito”) browsing window when shopping. By clearing your history when you close the tab, businesses can’t track your viewing habits and arbitrarily increase prices. (A phenomenon probably experienced by anyone who has bought plane tickets for two consecutive days.)
Put down your purchases
It also helps to give yourself some time between finding an item you like and actually purchasing it.
Resist the “buy now” pressure and instead add the item to your cart and walk away for a while. The length of time is up to you, but a week is a solid goal to give yourself time to think. (And it could also prompt a retailer to offer coupons for the items in your “abandoned cart.”)
save car costs
Buying car insurance is one way to save on car expenses. You can also reduce your maintenance expenses by simply driving less or avoiding situations that put extra strain on your car – like sudden braking or rapid acceleration.
And while there’s nothing you can do to control gas prices, driving less will also reduce how much of your hard-earned money you’re putting in the pockets of oil companies. (Several grocers — like Kroger — also offer gas points for using their rewards program.)
Depending on your carrier, you can save significant money by bundling your cable and internet service. Some providers even include cell phone coverage. If you want to trim even more, take a close look at how much of your current package you’re actually using and consider trimming the cable altogether.
Another place to check is your streaming services. They often offer an attractive price to lure you in and then raise those prices regardless of whether you even watch their content.
Cancel unnecessary subscriptions
Chances are, you’re still paying for subscriptions that you no longer use or need (and that you’ve probably forgotten). To control this, carefully examine your credit card statement and identify any recurring expenses that you can avoid.
And to avoid falling into the same trap again, avoid signing up for supposedly “free trials” that require you to enter your credit card information. This free time will end before you know it and suddenly you are looking for something you might not otherwise have chosen.
Pay off your high-interest debt
Nothing drains a budget quite like debt. Particularly high-interest debt. By making every effort to pay off your high-interest debt as quickly as possible, you essentially save yourself months or years of additional interest payments. Then you are not only relieved of this additional burden, but you also have additional money that you can use to save.
Create a 50/30/20 budget
Once you’ve paid off your high-interest debt, a 50/30/20 budget can be an invaluable tool for setting your savings priorities.
This approach means you use 50% of your after-tax income on essentials, 30% on desires, and 20% on savings or other financial goals. While it’s not a hard and fast rule, it’s a handy guideline that can help you create a savings plan that works for you.
Check your budget regularly
Once your budget is created, set regular rhythms to review it. This might look like reviewing your transactions every week and then reviewing total budgets monthly. Are you on the right track with the review? If money is left over, how would you like to spend it (or save, give away, invest)? If the budget is tight, which one or two budget items could be changed?
You can’t arrive if you don’t start
The desire for more savings will not make it. But implementing a few simple tips and tricks can get you on the right track. Remember that saving is not about how much money you make. It’s about how aware you are of where the money is going. Sometimes it requires uncomfortable decisions. But if you have that money available for future use — be it an emergency or a planned event — any short-term discomfort will be more than worth it.
Hunter Yarbrough, CPA, CFP, is a vice president and financial advisor to CapWealth. He is passionate about looking at personal finance holistically, including investments, taxes, retirement, education, estate planning, and insurance. For more information about Hunter and CapWealth, visit capwealthgroup.com.