While you can increase your income with passive income opportunities, saving on reducing expenses is another way to improve your financial situation. Telling a friend or family member to save their money is generally good advice. The problem for many, though, is that saving is easier said than done.
Some people would love to save, but they either do not know how or cannot afford to. Even though it might seem impossible to set aside money, the odds are that with some planning and a few cuts, most people can save more than they might otherwise expect.
How to Save Money Fast
Regardless of what catalyzed your sudden interest in saving, doing so is a good thing.
You might be thinking about saving for the first time, already have something you need to save up for, or, perhaps, you are looking for some help to finally achieve your goal of setting aside some savings. Regardless of your situation, there are some things you can do in the short term to meet your specific savings goals. Here are 12 strategies that actually work to save money fast:
- Audit Yourself
- Make Your Savings Automatic
- Consolidate Debt
- Use “Spending” Cash
- Use the 24-Hour Rule
- Go on an Amazon Detox
- Get Off Social Media
- Switch to a Cheaper Cell Phone Plan
- Use Coupons
- Plan Your Grocery Shopping
- Put Air in Your Tires
- Use a Water Filter
1. Audit Yourself
If you are wondering how to save money fast, the first thing you need to do is audit yourself. What this means is, you need to go through several months’ worth of bills (preferably three or more), and then break these bills down into categories so you can start to get a clearer idea of where and how you are spending most of your money.
If dissecting your finances manually sounds daunting, do not worry—there are apps that can help like TrueBill and Acorn. Also, many online banking apps have a section that automatically breaks your spending up for you. So, conducting a spending audit is probably easier than you think. As you analyze your spending habits, try to break them down into the following major and minor categories.
Major Spending Categories
· Rent or Mortgage: A good rule of thumb is that about 30% or less of your monthly salary should go to rent or mortgage payments. If you are paying more than this, it may be time to think about moving out or scale down your housing costs.
· Car Payments: You should not be paying more than 10% of your monthly income toward your car payments. If you are, you may have overextended yourself. It is better to figure this out before you sign on the dotted line and end up owning an overpriced vehicle.
· Gas: Paying for gas is a necessity for most. If you feel you are paying too much in gas, you can get a more fuel-efficient vehicle, or you can start carpooling or research cheap gas stations that may save you a few cents per gallon.
· Food: Food costs are one major area where most people can save. Figure out how much you are spending on food on a daily basis and then see if you can save by cooking at home. You may be able to afford to eat out once or twice a week, but if you want to know how to save money fast, you should increase your at-home cooking and decrease how often you are going to restaurants.
Minor Spending Categories
· Utilities: Depending on whether your utilities are included in your rent or something you purchase on your own, you may have little or complete control over this category of spending. If you can, try to reduce your consumption of heating fuel, water, and electricity. Unplug appliances that do not need to always be plugged in, take a shorter shower, and turn down the thermostat a couple of degrees.
· Entertainment: Entertainment can include things like renting movies, streaming service subscriptions, books, and the like. Spending a small percentage of your income on entertainment is nothing to chastise yourself about. But, if you want to save money fast, you should try to limit your subscription payments. Instead of subscribing to Disney Plus, Hulu, and Netflix, you can pick just one—at least for a while.
· Nightlife: Nightlife expenses like admission fees and buying drinks are another major area where most young people can dramatically cut costs. Rather than wasting money on overpriced drinks, you can try new hobbies, have friends over at your place, or simply find a cheaper bar.
· Retail Purchases: It is harder now than ever to cut down on retail purchases as companies like Amazon and others target product ads at us every time we go online. One way you can reduce your spending is by staying off social media and reducing how much exposure you have to ads. Also, you can create a set amount of money that you are allowed to spend on retail purchases every month and refuse to go above it.
After breaking up your spending like this, it should be much easier to see where you are spending too much and to track your monthly spending. This can help you to know that you are progressing in the right direction.
2. Make Your Savings Automatic
Not having to think about manually taking money out of one of your checking accounts and putting it into your savings is an essential step in learning how to save money fast. By leaving more money than you need in your checking account, you are making it easier for yourself to overspend. Create automatic savings rules that remove “X” amount of money from your checking and put it directly into your savings or some other account—preferably one that collects at least some kind of interest.
3. Consolidate Debt
Consolidating your debt is a good way to organize your bills, and it can also help you save more money fast. By bundling multiple loans and other expenses up into one unified bill, you can often reduce interest rates and save yourself money in both the short and long term.
4. Use “Spending” Cash
If you need to know how to save money fast, you can use cash exclusively. Rather than walking around with a debit or credit card that you can easily swipe, give yourself a weekly allowance that you cannot go above. This will force you to manage your money better and will also teach you to be less frivolous about how you are spending your money. Why? Because there is something about using cash versus a plastic card. Using cash feels more substantial and gives you a moment of pause before purchasing something you probably do not need.
5. Use the 24-Hour Rule
Another way to save money fast is by initiating a “24-hour” rule into your life. Any time you are thinking about making a purchase greater than $100, make yourself wait for 24-hours before proceeding. This will break your habit of unnecessary, impulse buying.
6. Go on an Amazon Detox
This may be difficult, but one effective way to save money fast is by going on an "Amazon detox." Simply stop buying things off Amazon for a month. Full stop.
Social media is one of the main ways that people are introduced to new (usually unnecessary) products and services. By limiting your social media usage, you can reduce how often you are exposed to advertising and marketing and, therefore, decrease your desire to spend money on things you do not need.
8. Switch to a Cheaper Cell Phone Plan
You may be overpaying for your cell phone plan. Do some research and talk to your friends about what they are paying. If you are paying substantially more, either talk to your carrier or consider switching to a new cell phone provider.
9. Use Coupons
Yes, coupons are still a thing. And yes, they can still save you money. Using coupons does not mean you need to cut little squares out of your local newspaper. Instead, you can use sites like Groupon and BeFrugal to save money.
10. Plan Your Grocery Shopping
Before you walk into a grocery store, make a plan so you know exactly what you need to buy. Impulse buying in grocery stores is rampant, and it can cost you big bucks. One way to avoid impulse buying at the grocery store is to never go shopping hungry. Eat a big meal and then head to the grocery store. If you make a list on your phone, you can be in and out in no time with more money in your wallet.
11. Put Air in Your Tires
This one may sound odd, but adequately inflated tires can save you a surprising amount of money on gas. Invest a few quarters into an air machine and track the dollars you save.
12. Use a Water Filter
Instead of buying bottled water, get a water filter (in this case, yes, you can use Amazon) and save yourself some money. Also, using less plastic is good for the planet, so that is an added bonus.
Now that you know at least 12 strategies on how to save money fast, you can start thinking about applying some of these same tactics over the long term to save money slowly and consistently for your retirement and future self. It is never too early to start thinking about tomorrow!
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