Most people have read the same generic money-saving advice over and over, such as “don’t drink fancy coffees every day” and “use coupons.” While making small changes such as these can help, saving money is also about a larger shift in mindset and lifestyle. The tips below can help you make big changes that mean significant savings.
Make a Budget
This is the first, necessary step for saving money. A budget is not just about deciding how much money you can spend on certain things. It also offers a snapshot of what you are spending and an opportunity to work out where you can cut back. There are apps that can help you budget, or you can make your own spreadsheet. You can even use a pen and paper if you prefer a low-tech approach. Some people find it useful to use what is sometimes called the envelope method. With this, you would put a certain amount of cash in the envelope each week or month, and when the envelope is empty, you have no more money to spend. Others find it useful to put everything on a card so they can track their spending.
Look for Lifestyle-Specific Savings
With a budget in place, you can start to look at where you could cut back. For example, if you are spending a lot of money on prescription drugs, could you save money by getting generics instead? Frequent travelers might want to look into credit cards that offer points on hotels, flights or rental cars. Some people are surprised to find how much money they are spending on eating out or takeaway. You can even look at whether you are getting the best deal possible from your bank or if you are paying unnecessary fees. Some banks offer interest checking accounts. Could your cell phone or internet packages be better? Whatever your lifestyle and budget, there are likely to be places where you can change your usual habits or providers and save significantly.
Refinance Student Loans
If student loan repayments make up a substantial portion of your budget, you are not alone. Many people are struggling to pay off their student loans, but refinancing to a lower interest rate has become one of the best ways to save money. Your savings will vary depending on your credit score and other factors, but you may be able to save a lot of money by getting a much lower interest rate. If your credit is poor, you might still be approved with a co-signer.
If you own or rent a big home or apartment, do you really need all that space? Could you save money by moving into a smaller place? You should also take a look at your commute. Would it be feasible and cheaper to take public transportation all or part of the way? You might even save on both gym membership and gas money if you commute to work by bicycle. Can your two-car family survive with one car? These types of options don’t exist for everyone so it may be a good idea for them to refinance, but for many others, they simply haven’t been seriously considered.