Did you know you can learn how to save money? It’s true, LeFou!
Saving money doesn’t take incredible discipline or million dollar paychecks. It isn’t reserved for the Buffets and Rockefellers of the world. Real people can save money too! Understanding how to save can be taught, and it’s one of the most important life skills you can learn.
Even today’s super savers had to start somewhere. Heck, there was a time when I had no clue how to save money. I was broke, in debt, and barely scraping by. It wasn’t that I hated saving money. I just didn’t know where to start.
Once I learned a few simple but effective techniques, my life changed forever. Now, I don’t live paycheck to paycheck. My family doesn’t worry about scraping by. And, even if we lost our income, I know we’d be OK because the money-saving skills I’ve learned will carry us through.
Let’s be clear, there are two ways to look at all of this, the ways to save money (put it in the bank) and ways to spend less. The first part of this post will look at ways to save money. We will cover these eight ways to save money:
- Use a Budget
- Track Your Spending
- Keep an Emergency Fund
- Pay Yourself First
- Make it Automatic
- Destroy Your Debt
- Focus on the Big Items
- Track Your Progress
After that, check out our HUGE list of ways to spend less money. Be sure to read until the end where you’ll find a list of our favorite money saving tools! And once you know how to save, check out this list of ways to make extra money.
So, what do you say? Let’s get started!
8 Effective Ways to Save Money Fast
As you probably know, there are a bazillion ways to save money. Sure, most these techniques work, but some are clearly more effective than others. To save money quickly, you need to focus on the right savings strategies. Here are 8 tips to help you save money faster!
1. Use a budget.
I know you don’t want to hear this, but a budget is the most important tool you have to help you save money. For most people, the thought of using a budget conjures up visions of ramen noodles and clipping coupons. But, a budget doesn’t have to be scary or restrictive. It doesn’t mean you have to go without. In fact, a budget actually helps you get the things you want by encouraging you to use the money you have more efficiently.
Simply put, a budget is your financial plan for the month. That’s it. You’re creating a plan for how you’ll use your money. With a zero-sum budget, which happens to be my favorite type of budget, you account for every penny you make that month. This helps you:
- Control your money and make it do what you want.
- Remember and plan for bills while avoiding overspending.
- Get what you really want by using your money more efficiently and effectively.
Seriously, a budget is one of the most powerful financial tools at your disposal. Once you understand how to create a budget and control your finances, you’ll learn how to save money in no time!
2. Track your spending.
Tracking your spending is your budget’s sidekick. While your budget lays out the plan for the month, tracking your spending provides the actual results. Additionally, it helps you to identify and fix any problem areas within your budget itself.
When you know exactly what and where you’re spending, finding ways to save money becomes even easier. You’ll have a clear picture of where your money is going, be able to determine if you stayed within your budget, and have a running total of your expenses throughout the month. If you happened to spend more than you planned for, don’t fret. By tracking your expenses, you’ll know exactly where to make adjustments in next month’s budget.
3. Keep an emergency fund.
When learning how to save money, most people are naturally excited to get started. However, excitement only carries you so far. Expenses will pop up that you didn’t expect, and – unfortunately – most people don’t have a cushion. If these expenses derail your budget, it’s easy to feel defeated and quit, costing you big bucks in the process. That’s why you need an emergency fund.
An emergency fund is a pile of money you keep stashed away to cover emergencies. You already know things are going to break, problems are going to happen, and money sucking issues will arise. The best way to prepare is to start an emergency fund.
Start by saving $1,000 for emergencies. To do this, save just 10% of your take home pay in your eFund until you’ve hit the mark. Once you know how to save money, try to squirrel away even more. A fully funded emergency fund should have 3 to 6 months worth of expenses stashed in it. When you hit that mark, you should be adequately prepared to handle almost anything thrown your way.
4. Pay yourself first.
If you want to save money, you have to make it a priority. There’s no better way to save than to pay yourself first.
Think of your savings as an expense – your most important expense. Before you pay your other bills, you need to save money for yourself. That means sticking some money in your 401(k), stashing money in your savings account, and putting a big fat check in your Roth IRA BEFORE you pay other bills. That way, no matter what happens, that money won’t disappear. You’ve made saving your most important financial priority.
Also, take advantage of free money whenever you can. If you have access to a work sponsored retirement account, save at least enough to qualify for your employer match. So, if your employer matches 4% of your salary, save at least 4% of your own money to max out the benefit. That’s free money just waiting for you to claim it. Don’t let it go to waste!
5. Make it automatic.
If you have trouble saving money, make it easy for yourself. Automate your savings so you don’t even have to think about it. Saving money automatically eliminates the need to make physical deposits. It also decreases the chances that you’ll spend it before you save it. In fact, when you automate your savings, it’s almost like you never had the money to begin with.
Most employers offering retirement plans allow you to directly deposit money into your account. You can do the same thing with other types of savings accounts too! Just directly deposit money into savings accounts, Roth IRAs, and emergency fund accounts.
If you want, you can even automate the rest of your financial life. After automatically transferring money to the proper accounts, set up automatic bill pay to pay your bills on predetermined days each month. The initial setup takes a little time, but you’ll spend just a few minutes a week once you’re done. Just check in a few times a month to make sure everything is running smoothly. You’ll save more money, pay your bills on time, and have a good idea of how much you have left to spend each month.
6. Destroy your debt.
One of the best ways to save money is to get out of debt…and to do it fast! Here are some great ways to make extra money, to put towards destroying that debt! Debt is the biggest obstacle standing between you and the life of your dreams. It crushes your ability to save and clouds how much things are actually costing you. Besides that, you owe interest on all of that debt, so the purchase price is always higher – sometimes by a lot.
So, how do you get out of debt? Paying off high-interest credit card debt is a good start. When I was in credit card debt, my future wife taught me how to save money by using a good balance transfer card. I saved money on interest and got out of credit card debt fast. Here’s how I did it:
- I moved all of my credit card debt to a balance transfer card with an introductory 0% interest rate.
- I immediately started saving money by not having to pay interest on the balance.
- I made larger payments than the minimum, which destroyed my debt even faster.
- I paid off the card balance before the intro 0% APR adjusted.
There are plenty of balance transfer cards available, but I think the Chase Slate® Card is easily the best option. Most balance transfer cards offer an introductory period with 0% interest, but the Chase Slate® does one better. It is the only card I know of that doesn’t charge a balance transfer fee. And when you’re looking to save money by transfering thousands of dollars, that can save you even more.
7. Focus on the big items.
When searching for ways to save money, start by tackling the big stuff first. Yes, clipping coupons and eating leftovers can have a positive effect on your bottom line. But, initially, these small measures aren’t going to save enough to keep you motivated.
Eliminate your credit card debt. Look for ways to lower your rent or car payment. Eat out once a week instead of once a day. Learn how we save over $1,000 a year by using a discount cell phone provider. Pick the low-hanging fruit first, then make smaller adjustments. Instead of saving pennies at a time, you’ll be saving hundreds!
8. Track your progress.
When you do something long enough, things get tedious. Even for super savers like me, saving money can get boring. That’s one more reason to track your progress. You need little wins every once in a while. By watching your net worth grow, you’ll get the chance to pop champagne and celebrate every once in a while. Plus, you’ll be able to tell if all of these awesome changes are getting you where you want to go.
Ways to Save Money on Food
One of the biggest black holes in our budget used to be meals. Before we got out of debt, we were practically eating all of our savings to death! Here are some great ways to save money on food.
9. Learn to cook and eat at home.
If you’re not careful, eating out can cost you a small fortune each month. I know, because that is where most of our flexible income used to go. Not only do you have to worry about the price of the meal. There’s also the tip, drinks, and more.
Once we realized that we were spending close to $1,000 a month on food, we immediately made the switch to eating at home. By learning to cook and eating in, you can stash that money away and provide an immediate boost to your savings!
10. Brown bag it to work.
Grabbing lunch to during the work day is habitual for a lot of people. But, those quick lunches could be costing you big time. Let’s assume you spend just $10 a day on lunch, plus $1 for a drink. That’s $400 a month. If you stopped eating out for lunch, you could save enough for a vacation in just a few months.
That’s real money player, and you could save it just by bringing your own lunch to work! What would you do with an extra $400 a month?
11. Eat leftovers once a week.
One night a week, try eating leftovers for dinner. Not only will this give you the night off from cooking, it will save you money as well. Eat what you have and save. How simple is that?
12. Try breakfast for dinner.
OMG! I love me some breakfast for dinner! Eggs, pancakes, french toast – it doesn’t matter. Having breakfast for dinner isn’t just delicious, it’s one of the best ways to save money on food.
Don’t like breakfast for dinner (you’re wrong, FYI)? Try serving something else that is cheap one night a week. Find a cheap dish you like, and have at it. When a meal is cheap, it makes it all the more tasty!
13. Shop for sales.
When you’re at the grocery store, don’t just buy products based on their brand name. Shop for sales and save yo’self some dough! Instead of sticking with Kellogg’s, try the General Mills brand that’s on sale instead. Better yet, go generic. These days, store brands taste just as good as their brand name counterparts.
14. Double up with coupons.
If you really want to save money at the grocery store, combine sale items with a store or manufacturer’s coupon. You don’t have to go full-on extreme couponing. Just grab the savings where you can and stash it away to use later.
15. Plan meals ahead of time.
Saving money on food is a lot easier when you plan your meals in advance. Before you go shopping, browse the weekly ads and look for coupons. Plan your meals around the sale items, be flexible with your plan once you’re there, and you’ll cut your grocery bill down in no time.
Meal planning systems, like the $5 Meal Plan, can save you a lot of time and money. For just $5 a month, you can get an entire month’s worth of meal ideas that will save you the headache of searching for recipes. Plus, most meals cost just $2 a person or less. If you want to save time and money on your meal planning, they are definitely worth checking out.
16. Go meatless once a week.
Want more ways to save money on meals? Try going meatless once a week. Buying meat can be expensive and really increase the size of your grocery bill. Besides that, most of us eat too much meat as it is. Instead of basing every meal around the meat, go vegetarian one night a week. You’re sure to discover new foods you didn’t even know you liked, and you’ll save money doing it.
17. Use restaurant coupons.
When you do go out to eat, make sure to use coupons. Heck, when we go out to eat, we plan where we’re going based on the available coupons. Just because it’s a special event doesn’t mean you can’t save money either. We’ve even been known to use coupons for birthday and anniversary dinners! It might sound lame to you, but we’re laughing all the way to the bank!
Ways to Spend Less Money on Monthly Bills
Want specific ways to save money on bills? Here you go!
18. Automate your bills.
Many companies will give you a discount if you agree to make automatic payments. Additionally, you should never miss another payment and incur a late fee. Automate your bills and stash that discount away in your savings. –BONUS– Try paying every bill you can with a cash back rewards credit card. That way, not only are you getting the discount for automatic payments, you are also getting more money back into your account.
19. Actively seek ways to cut your spending.
Nobody is going to save money for you. You need to take action and do it yourself. Every few months, go back through your expense tracking sheets and look for ways to cut out the waste. Keep your eyes peeled and your ears open for new discounts and promotions. Don’t get complacent with the bills you have. Always look for a better deal.
20. Ask for discounts.
Usually, when you want something, you have to ask for it. Again, most companies aren’t going to give you a discount just for being you. However, if you ask, you might find they offer discounts for making your payments on time. Or, you can just flat-out ask for a rate reduction because you’ve been so loyal. The worst they can say is no.
21. Threaten to leave…and mean it.
When a company jacks up your rates, the best thing you can do is ask them for a discount. If not, threaten to leave…and mean it. There are plenty of other companies who would love to do business with you. Plus, your current provider probably spent a lot of money to secure you as a customer. They’d rather not see you go. Ask them to reduce your rate, threaten to leave, and then do so if they won’t.
22. Cut the cord to cable.
Speaking of leaving, one of the best ways to save money each month is to ditch your cable company. Gone are the days where cable TV is your only option. New technologies and streaming services can help you cut your cable bill by thousands each year. Read all about how you can do it here.
23. Use a discount cell phone provider.
Speaking of old habits dying hard, you can also save thousands of dollars each year by switching cell phone companies. The big dogs no longer have a monopoly on good cell phone service. You can leverage new technologies and discount providers to get high quality cell phone service. Heck, you can even get a rad smartphone. Two of our favorite companies are Ting and Republic Wireless. Just click the links to learn more about them.
24. Turn down the heat.
One of the simplest ways to save money is to turn down the heat. When it’s cold outside, you don’t need to crank the heat to 75 just to stay warm. Throw on a pair of slippers, cover up with a blanket, and watch the savings roll in.
25. Open the windows.
In the summertime, nature provides a great way to cool off your house. It’s called a breeze, and you can take advantage of it by opening up your windows. Just crack those babies open, enjoy the fresh air, and save money on your electric bill. If you want to get really wild, create an awesome draft by opening a door or using a fan! Now that’s some serious savings!
26. Question everything.
At least once a year, take a look at everything you spend money on and question it. Do you need it? Can you find it cheaper? Is there a better option? This includes entertainment, insurance plans, investment programs – everything you have. Question it, shop around, and find more ways to save money!
Saving Money on Entertainment
Everybody loves to have a good time. Even if you’re paying off debt, you need to let loose every once in a while. Here are a few ways to save money on entertainment.
27. Don’t let others spend your money.
First of all, there are a lot of people who love to spend other people’s money. They’ll invite you to expensive events, ask you to buy expensive clothes and items to prepare for them, and then ask you to do it all over again next weekend. Don’t let them. Remember, you’ve made a change to be weird and save money. They’re the normos who are $15K in credit card debt.
Sometimes, you just have to say no. Explain what you’re doing and why. Don’t let them guilt-trip you into spending on what they want. Stand firm. The people who care about you will understand. You might even inspire some of them to join your new journey!
28. He who has the most toys doesn’t win.
We spend far too much time working our butts off to buy stuff we don’t need (and can’t afford) to impress people we don’t even like. Somebody will always have more. Stop trying to keep up with the Joneses. You’ll never win.
29. Save money on nights out.
When I was younger, I spent countless thousands of dollars at clubs and bars…and what did I get for it? A headache and a case of the runs.
It’s easy to spend a couple hundred dollars each weekend on entertainment. But, that frivolous spending is keeping you from being able to afford doing the things you really want. Eliminate it, and save money.
30. Invite friends over for a night in.
Rather than going out, invite your friends over for a night in instead. Turn on some Pandora, have a few drinks, and enjoy each other’s company. Play some cards or have a game night. Staying home can be a blast! Plus, you’ll actually get to hear each other when you talk.
31. Hit a matinée.
Still want to do dinner and a movie? How about lunch and a matinée instead? I love going to the movies, and seeing a matinée is an easy way to save. Prices are generally several dollar cheaper, so you can still see the show at a pretty steep discount.
32. Rent a movie.
Better yet, rent a movie and save even more. Now, you don’t even have to go to the video store. Just use your Netflix or Amazon Prime subscription to watch great movies on a dime.
33. Cut back on expensive hobbies.
If you’re really looking for ways to save money, cutting back on some of your most expensive hobbies can be a game changer. Look, I like golfing as much as the next guy; but, if I’m trying to get out of debt or save for a huge goal, I’ve got to cut out the most expensive hobbies. Maybe you love shopping or perhaps going to concerts is more your thing. Find out which expensive hobbies are costing you your dreams and get rid of them…at least for now.
34. Budget for it.
All of this isn’t to say that you can never have any fun. The best thing you can do with your fun money is to schedule it in your budget. If you budget it in, you’re being deliberate with your money. You’re not committing random acts of spending. Save on the things you don’t want so that you can spend on the things that you do. Stop spending. Start living.
Ways to Save Money on Clothing
Shopping for clothes is an addiction that many of us can’t kick. Here are a few ways you can save.
35. Don’t buy into the fashion game.
Ah, fashion…it’s such a shell game. Designers are constantly changing what is “in” and creating cool new trends for one reason only: To move more product. Don’t fall for the trap. You’ll spend thousands trying to keep up with this season’s new trends. Plus, they’re going to change in about 3 months. It’s a hamster wheel you’ll never be able to get off. Just say “no” to the fashion game.
36. Shop at garage sales.
Garage sales and consignment shops are a great place to find fashionable clothing at a huge discount. Why pay $40 for this season’s look when you can pay $1 on last season’s fashion and still look great? Garage sales are also a great place to find kids clothing, used furniture, and kid’s toys. Some places are hit and miss. Others are a gold mine.
37. Save on kids items.
Speaking of kids, don’t go out and blow your entire paycheck on kids clothing and toys. First of all, they don’t care what they wear or play with. They’ll be happy with anything you give them. Second, kids are hard on clothes and they grow out of things quickly. Save your money, buy used, and let somebody else take the sticker price hit instead.
Ways to Save Money on Travel
Traveling can be really expensive, but it doesn’t have to be if you know a few simple tricks. Here are some of our favorite ways to save money on travel.
38. Use credit card rewards.
Using credit card rewards is by far the best way to save money when traveling. We’ve used points and miles to take more than 20 domestic and international trips over the past 21 months…and for just pennies on the dollar. You can find our current list of the best travel credit cards here.
39. Travel at off-peak times.
One of the best ways to save money on flights and hotels is to travel during off-peak times. By traveling during the “slow” season, you can save up to 50% (or more) on some flights and hotel stays. For Europe, this means traveling between November and March. If you want to travel to the Caribbean, try May through November.
40. Pick the cheapest days to fly.
Just like traveling off-peak, certain days of the week are cheaper to fly. Generally speaking, Tuesday and Wednesday flights can save you a ton of money. Also, try flying out first thing in the morning!
41. Don’t commit to just one points program.
Be flexible with your favorite travel brands. You don’t necessarily want to commit to a single points program because they don’t always have the best deals, especially if you’re traveling on credit card rewards. Drop the brand loyalty and save money.
42. Set a travel budget…and stick to it.
Setting a budget while you’re on vacation can be difficult. Sticking to that budget can be even tougher. However, if you want to save money you’ve to to stay strong! Doing so could allow you to take two trips a year (or three or four!) instead of just one.
43. Drive when possible.
Flying to a destination, especially when you’re traveling with kids, can get expensive fast. If you have the option, try driving instead. For the cost of gas, you can reach your destination with some cash still in hand. Use that savings to enjoy your stay…or book another trip.
44. Fly coach.
45. Go to expensive destinations but book cheap hotels.
One of our favorite ways to save money on travel is to go to awesome locations but book cheap rooms! Why book a ridiculously nice room in Rome or Rio when you can stay for much cheaper. You’re traveling there to see the world…so get out of your room and do it!
46. Don’t eat at the airport.
Airport food is expensive and (usually) not very good. Pack some snacks, save some money, and don’t eat at the airport.
47. Buy a city pass.
If you’re traveling to a large city with tons of tourist attractions, try using a city pass to save money. These passes can help you get discounted admission to some of the city’s best sites, plus it may give you a few ideas of places you didn’t know you wanted to see. Additionally, these passes can usually save you a lot of time by giving you “skip the line” access. Some of our favorites include the New York Pass, London Pass, Paris Pass, Omnia Vatican & Rome Pass, Las Vegas Pass, Dublin Pass, and the Berlin Pass.
48. Visit the welcome center.
Another great way to save money when traveling is to visit the welcome center. There, you’ll be able to find information about area attractions, entertainment, and restaurants. More importantly, they usually have a bunch of coupons you can use for discounts all around the area.
49. Get the Southwest Companion Pass.
Earning the Southwest Companion Pass allows you a companion to fly with you for free on any Southwest flight you book with cash or points. We’ve used it to fly all across the US and the Caribbean – including flying our kids to Jamaica. Of course, earning it takes a little work. You can learn all about how to get it here!
Other Ways to Save Money
Need some more ways to save money? Here are a few more random ways to save!
50. Try “no spend” days.
Every few weeks, try having a “no spend” day. A no spend day is exactly what it sounds like – a day where you don’t spend any money. If you really want to get cray cray, challenge yourself with a no spend week!
51. Do your own taxes.
Using an accountant to do your taxes can get really expensive. With modern tax prep programs, there’s absolutely no reason you can’t do your taxes yourself. You can even start your taxes FREE with TurboTax Online Federal Free Edition. Start off free and upgrade as needed.
These programs are cheap, easy to use, and will save you a ton of money. Your taxes aren’t that complicated. I do my own and have for years.
52. Use a discount broker.
Don’t let your retirement savings get gobbled up by high fees. Use a discount online broker instead. There are several online brokers with a great reputation that can save you huge money by charging fees that are far less than typical brokerage houses. The best part is that a lot of them make saving for retirement completely automatic. Learn more about our favorite online brokers for beginners here.
Best Money Saving Tools
Here’s a list of some of our favorite money saving tools mentioned throughout the piece:
- Personal Capital: Our top tool for saving money! This free financial software provides awesome financial tools that we’ve used for years. The best part: It’s totally FREE! We love it…and we think you will too. Just click the link for more details!
- Ebates: If you shop online, you need to be using Ebates. Sign up for their free account, click through their links, and get great deals at thousands of different stores. Plus, you’ll earn cash back while you shop! Tough to beat that, right? Click the link to sign up for your free account now!
- Wealthfront: At Wealthfront, you can manage your first $10,000 in retirement savings for free! With super low fees and top-of-the-line automated investing services, Wealthfront helps you set it and forget it! Click the link to learn more.
- Discover Bank: Looking for a better rate on your savings? It might be time to check out Discover Bank! With high interest rate saving accounts that are hard to beat, Discover Bank may be the key to making your money work for you. Follow the link for more details!
- SoFi: If you’re buried under student loan debt, it might benefit you to refinance. With great rates and top notch customer service, SoFi can help! Just click the link to learn more.
- Free Travel Advice: Don’t forget, we give out free travel rewards advice. Just follow the link, fill out the form, and we’ll help you plan the trip of your dreams…on a budget of course!
Understanding How to Save Money
Saving money isn’t complicated, but it can be hard to do. Focusing on the right ways to save helps you see big results fast. That keeps you emotionally invested, which means you’ll save even more. And, once you understand how to save money, it’s a skill you’ll take with you for the rest of your life.
So, what are you waiting for? Use these tips to start stashing mad cash in no time!