The key to financial security is having a savings cushion, but many people struggle with how to save money. Saving a percentage of your income is one method that works, but there are other ways to ramp up your savings.
Start by making a budget, so you know how much you’re bringing in and what’s going out each month. Look for places where you could cut back, like cancelling memberships and subscriptions or minimizing restaurant spending. Then, try shopping with cash only to avoid impulse buying (or if you do use plastic, shop with an app that rounds up your purchases and puts the difference into a separate savings account).
Shop at warehouse chains like Costco, BJ’s or Sam’s Club to get items in bulk for a lower markup. This saves you money in the long run, especially if you’re stocking up on nonperishable foods or household supplies.
Plan your meals and grocery shop with a list. Research shows that people who do this spend less money overall compared to those who don’t. You’ll also be able to take advantage of sales and coupons that can help you save even more.
Use a service to automatically transfer a small amount of money into a savings account each time you receive your paycheck. This helps you stay consistent and can add up to a significant amount over the course of a year. Or, you can use an envelope budget system that involves setting aside a certain amount of cash for each spending category and filling the envelopes as they get empty.
Look for free events in your area to save on entertainment costs. It can be tough to find free things to do in a high-cost city, but the local newspaper or alternative weekly may have listings of events and venues that are cheap or free.
If you have a credit card that offers rewards, use it to save on normal expenses. But, be sure to pay it off each month to avoid interest charges.
Don’t be afraid to try DIY projects around the house. It can be a lot cheaper and more fun than buying ready-made products. For example, you can make your own cleaning solutions with items from the pantry, and you can grow your own herbs to cut down on food costs.
Invest in your future by investing in a retirement account, such as a 401(k). If your employer matches your contributions, that’s an extra way to boost your savings.
If you’re thinking of moving into a new home, consider looking at older homes or neighborhoods that are less expensive than more recent developments. This is a great way to increase your home value while saving money on mortgage insurance and maintenance costs.