We’ll show you 107 different ways to save big money, sorted by the potential savings of each tip. Saving money is a lot easier said than done. Yes, we can cut out coffee and save a few bucks a day to find more money. But how much does that really add up to in the end when those money savings are compared to a mortgage that could be costing someone thousands?
The best way to get big savings immediately is to make big adjustments. Go after the big holes where one is losing money and plug them first to stop the sinking and to start reclaiming a financial future. These big changes for big money savings right now can unlock thousands of dollars a year. That’s the kind of saving that positions us for retirement and security.
Yet there are also hundreds of small opportunities to save money that pass us by.
The longest journey begins with a single step. And many millionaires get where they are by being frugal and constantly keeping an eye out for ways to save money right away, both big and small. Here are a 107 ways to save money now. They start with the big ones. The changes that can really free up resources. Then the list offers up ways to go after the smaller leaks that can still add up.
These are some of the biggest ways to save money. Some of them require some drastic modifications or life changes, but focusing on them can result in some drastic payoffs as well. Here’s how to potentially save as much as five thousand a year… or more.
Downsize to a Smaller Home
Potential Savings: from $2,000 to $5,000 a year (or more).
This is a big move, but one that saves a great deal of money if pulled off. Americans are moving into larger and larger homes. In 1983 the average American home was a little over 1,700 square feet. Today it is almost 2,600 square feet and still growing. Somehow Americans survived in the 1980s.
The average American home payment is $1,295 a month. Reducing the size of a home payment by just $100 a month saves $1,200 a year. One could put the savings from their mortgage into savings or paying down debt and turn their financial situation around.
Renters can even more easily consider searching for a smaller place to live once their lease is up. Saving on rent every month will add up quickly.
Moving to a smaller place will also reduce heating bills, cooling bills, maintenance costs and more, all providing further savings.
Live Somewhere Cheaper
Potential Savings: tens of thousands
A tougher call, this requires a family to not only uproot their home but their jobs as well. The trick is to research salaries that are adjusted for “cost of living” to see if you’ll save money by moving somewhere cheaper. For example, moving to San Francisco where the median household salary is $105,000, over twice the US national median household salary average of $50,000. But the median San Francisco home is $1.1 million and the median US national home is $188,900. There’s a good chance of making twice the money there, but then having to pay almost six times as much for the house (or more for rent, as you’ll be lucky to find a house).
The trick is to hunt for places where the ratio between home and other expenses are not eating up the increase in earnings potential. Places like Houston, TX and Columbus, OH fare well when considering the ability to make money and save on living expenses. Thinking outside of the box and moving based on cost of living research won’t be easy, the benefit is potentially tens of thousands a year of savings if done right.
Refinance Your Home Loan
Potential Savings: an average of $6,000 a year for some 6 million Americans. Less for others.
A recent analysis of mortgage payments by Credit Sesame shows that some 6 million Americans are overpaying by almost $500 a month on average for the home mortgages. That’s a loss of some $6,000 a year.
Refinancing a home mortgage to save money will require documentation, including W2s and recent pay stubs. More for freelancers and small business owners. But the payoff can be thousands of dollars saved for many Americans who haven’t looked into this. Since homes represent a third of where American’s income goes toward, it’s important to at least check with mortgage specialists.
Save on Daycare
Potential Savings: $2,000 a year to $10,000
Having children is a big personal decision. According to the US Dept. of Agriculture, each child will cost $245,000 to the age of 18. That’s almost a quarter of a million dollar commitment for anyone who decides to have a kid. Of course, the decision to have a child is based on more than just a simple dollar amount. However, paying attention to the costs a child brings into the equation is an important part of succeeding financially, to the tune of thousands a year.
One of the biggest impacts kids have on the budget is the cost of daycare. In larger cities, daycare can cost upwards of $20,000 a year and no matter where in the country people live, daycare is a big hit to the bottom line.
Read more about ways to save on childcare in our article here!
Some parents work around this through parent sharing. A number of parents get together and rotate taking care of a group of children together. This only works if they’re able to work a day or so less per week. People with alternate work schedules or who work part time will have the best chance of making this work.
Parents should also pay close attention to tax benefits that can save them money. In addition to tax credits there are flexible savings accounts that can help lower taxes and pay for childcare.
Ditch Your Second Car
Potential Savings: $2,000 to $5,000 a year
Running and maintaining a car is expensive. The IRS uses a yardstick of 50 cents a mile to estimate the cost. Too few people add up the cost of insurance, maintenance and gas on a second car. Americans can spend anywhere from a couple thousand and on up a year for a second car and could save money instead. That money, invested in the stock market, represents hundreds of thousands in potential savings over a lifetime if invested. Some families could be millionaires off the money saved.
In many cases, it’s not feasible to slim down to a one car family to save money if jobs are in separate directions. But with scheduling sacrifice and some careful planning, slimming down to one car is feasible and well worth the savings.
How to Save Thousands of Dollars a Year
These tips offer some big rewards for following, with substantial savings. They should definitely be at the forefront of anyone’s list of ways to save money as they offer a lot of potential.
Do Home Repairs and Home Remodeling Yourself
Potential Savings: $1,000 a year or more
Home repairs and remodeling are expensive tasks. Americans spent $130 billion last year in home remodeling, up from the previous years. The rule of thumb for home repairs is that a house will cost on average one percent of the purchase price a year. Home remodels cost even more.
These repairs can seem daunting and huge. But the savings over hiring someone else to do it are huge. In the age of YouTube and online blogs, chances are someone else has tried to do the project you’re thinking of doing and has documented it online. Research the project thoroughly, talk to neighbors who are handy, see if you can get family or friends with expertise to come help or give you advice.
Make Your Own Baby Food
Potential Savings: $1,000 a year
Baby food can be marked up quite a bit. Particularly organic baby food, which can cost up to $1 a tiny jar and more. But what we sacrifice in convenience we pay in raw dollars. At around $100 a month, making baby food can save a lot of money. Bonus, making baby food out of the regular ingredients from a dinner already planned for others in the family means not only savings, but that babies get used to a wide variety of the family’s preferred foods.
How to save money making your own baby food? A powerful blender will make regular food become baby food in seconds. Consider a Ninja Professional, which offers a variety of different cup and pitcher sizes that go right onto the blender’s blades. It’s easy to puree food for the baby on the fly based on whatever meal you’re already eating (or puree fresh fruits and vegetables, which are cheaper than baby food).
See 19 Unexpected Money Tips from Moms to See More About Making Your Own Baby Food
Use Public Transportation
Potential Savings: $1,000-$3,000 a year (varies based on car, distance from work, access to transportation)
One way to cut back on car use is to try public transportation to save money. Biking and walking to work, if options, are ways to save on money. They require a change of habits and trying new things. But over time the health and savings benefits might make them a welcome change of pace.
Interested in how much can be saved by taking public transport? There’s a calculator for that. Americans who use public transport save thousands of dollars a year.
Using public transport also gives riders back something precious: their time. Time spent not driving can be invested in catching up on business emails, preparing for work and more.
Potential Savings: $1,000-$2,000 a year
Another way to save money on a car is to car pool. Find someone at work who has a home nearby and offer to split the costs for a ride. One can also ask around to see if neighbors are making a commute in a similar direction. Again, it requires synching up schedules and not having as much freedom. But it can allow a family to get down to one car.
Even if someone can’t reduce the number of cars owned, reducing the amount of mileage on a car will help save money. Reduced maintenance, shared gas costs and few miles on the car helps it keep its value. Additionally, as in public transportation, time spent not driving can be invested in preparing for work or catching up on other things.
Potential Savings: $1,000 – $4,000
The American average spend on vacation is almost $4,500 for a family of four. The average American bank balance is somewhere around $4,400. The average American can sacrifice a vacation and double their savings. Of course, we’re not average, our amounts are different. But canceling or reducing vacation plans and banking the difference is a fast way to building up savings.
Potential Savings: $1,000-$3,000 a year
On the practical, money-savings daily impact, a smoker can spend anywhere from $1 to $2 million in a lifetime on cigarettes. A pack a day habit can begin at $10 a day. Imagine what that money could do for them if invested!
Stop Going Out So Much! Have People Over…
Potential Savings: $1,000-$2,000 a year
According to the BLS, the average American spends over $2,600 a year on food outside the home. One hack to cutting back on entertainment and food costs is to bring people over to your own home instead of going out as much. Without forking money over to bands, movie theaters or bars outside it can still be possible to have a great time with friends. Cooking favorite recipes, having potluck dinners, getting together to watch movies or mixing favorite drinks can still be a lot of fun while saving money.
Stop Drinking Bottled Water and Soda and Save Big
Potential Savings: $1,000-$1,200 a year
The average household spending on soda is over $800 a year. That’s almost $1,000 a year for flavored sugar water that is bad for our health. Meanwhile, bottled water, which Americans spend an average of $346 a year on, has been shown to contain more contaminants than tap water. In the USA, standards for tap water are more stringent than for bottled water plants. Buy a decent water bottle and fill up, then quit tossing money away for designer water.
Prepare Your Own Lunches
Potential Savings: $1,000 a year and up
Packing lunch takes time and prep. But it saves a lot of money, as the constant little cost of a daily meal adds up quickly. Even if you could find a good meal on your lunchbreak for $7, that’s $35 a week, or almost $1,750 a year in lunch out.
Brown bagging it may not seem like much fun. But those meals add up quickly over the months.
Wait for Out of Season Clothing
Potential Savings: up to $1,000 a year
Buying clothes out of season is another big way to save money. Start winter shopping for the following winter at the very end of winter and spring. Deals on winter coats and boots are thick on the ground when the season is finishing up, if you have the discipline to store the clothes away for eight months or so.
Savings range, but are often easily 50% off! As the average American family spends almost over $2,000 a year on clothing this can save a lot of money.
Potential Savings: thousands a year
Yard sales and consignment stores are places to find great deals on used items. One easy hack is to drive to areas that are from a higher socioeconomic strata than you are to find expensive, name brand items on sale at consignment stores. It’s best to look for non-chain consignment stores as some of them sell the best stuff or ship it out of the area it was donated in. Local used stores keep their inventory local.
Potential Savings: $1,500 a year toward the latter half of a person’s life
The CDC estimates that being overweight can add $1,500 a year to medical costs, particularly towards the latter half of a person’s life. Additionally, studies on workplace promotions and hiring show weight discrimination: overweight people with similar credentials and achievements make less money over a career. It’s unfair, but for those focused on the money bottom line reducing the waist line will actually save money in both health costs and might even boost career earnings potential.
Raise Your Credit Score
Potential Savings: thousands a year, depending on what loans you have
The lower a credit score, the higher the APR paid on any loans of any kind. This may not seem like much when buying something cheap, but over the life of a loan it can add up. If you’re planning on buying a house, a higher APR can lead to someone paying tens of thousands of dollars more than they would have with a strong credit score.
Taking the time to learn how a credit score works and what affects a credit score are critical to saving money long term on loans.
Don’t Shop Hungry
Potential Savings: $1,000 a year or more
This doesn’t seem like a tip that could save you thousands of dollars a year. But people who go grocery shopping while hungry buy more food. Studies show shoppers buy 60% more when hungry. Because they’re hungry everything they see looks good. And people with lower blood sugar are known for making worse decisions, so not only will people who are hungry buy more they’ll also buy things they don’t need.
They’ll also run the risk of buying things that are more expensive as their brain is literally not getting the fuel it needs to run at its best.
Thoroughly Research Car Purchases
Potential Savings: $1,000 a year or much, much more
There’s nothing worse than buying a car and then finding out it has a common problem with that model. While it’s hard to avoid lemons like that with brand new cars (one has to trust past models), looking for reliable used cars and past models in that line or manufacturer can help buyers increase their chances of avoiding lemons.
Every year Consumer Reports puts out an entire book of research from mechanics and subscriber polls rating car reliability. Having to spend money on repairs or a whole new car does nothing for the bottom line. Edmunds has a Total Cost of Ownership tool online.
A little research can save a lot of money down the road.
Buy Off-brand or Store Brand Products if They’re the Same Quality
Potential Savings: $1,000 a year and up
Everyone has a brand they love and won’t sacrifice on. But many off-brand products are made in the very same factory that the on-brand product is. Just as many are not. Experimenting with off-brand products that are acceptable is key to saving money while out shopping. Experts ballpark the savings of using off-brand products at 25%.
We don’t want to buy crappy things that will break sooner or taste worse, running up the bill longer term. But we also don’t want to be paying for extra advertising if our pasta is made in the same factory.
How to Save $200 to $500 a Year
These tips can all save you $200 to $500 a year or maybe even more. Setting aside hundreds of dollars a year adds up and is worth saving. Some of these tips can be done in under an hour or two. That’s like getting paid hundreds of dollars an hour!
Lower Your Credit Card APR
Potential Savings: depends on the credit card debt held , likely in the hundreds
The average American household has over $7,000 worth of credit card debt and the average APR is a little over 15%. That’s a minimum payment of about $157. Lowering that APR down to 12% will cut the bill to $140, saving $17 a month (or $204 a year).
How to cut your credit card APR down? That can be just as simple as calling your credit card company and asking them if they’ll lower your APR. If you’ve been improving your credit score this should particularly pay off. Even if not, it doesn’t hurt to ask. The result may surprise you?!
Other options to lower your APR can include explaining that you’ll switch to another credit card or that you have a better offer on hand. It’s a ten minute phone call and the savings could be well worth it.
Buy in Bulk
Potential Savings: $200-$400 a year, depending on dry goods and grocery spending
If you can plan ahead, buying in bulk can save serious cash. In particular dry goods that won’t spoil are worth buying in bulk. Things like paper towels and cereals, pasta and rice and canned goods. According to the USDA the average saved by buying in bulk is 12% for meat and 6% on grain products.
But beware, many stores know buyers are trained to look for bulk buys to save money and trick buyers by overpricing larger quantities. Always do the math beforehand to make sure you’re getting a deal. Being aware of consumption behavior is critical. If someone buys three month’s worth of alcohol, which stores well, but drinks it all in a couple of months, they won’t end up saving. Many stores with bulk purchases only put lower prices on some of the items, but raise the price on others. Always comparison shop!
Drink Less Alcohol
Potential Savings: up to $500 a year on average
It’s not time to bring prohibition back, but cutting back on alcohol can save big money. Americans spend almost $100 billion a year on alcohol! Sure, that’s going to vary a lot per person, but seeing as that American spend more on alcohol than tobacco, keeping an eye on alcohol spending is worth it.
The average American spends $400-$500 a year on alcohol. Even cutting alcohol spending back to half would save money.
Potential Savings: up to $500 a year
Read more: How To Quit Cable and Save Money
Cable is $700-$800 expense a year on average for Americans. Many Americans pay over a $100 a month. But it’s under $100 a year for Netflix. The same for Hulu. Swap out cable for Netflix and Hulu to save $500 a year.
Buy Refurbished Devices
Potential Savings: depends on personal upgrade cycle, hundreds a year on average
Worried about them breaking again? They have the same exact warranty as a new device. Apple even sells refurbished phones and iPads.
Buy a Fuel-Efficient Car
Potential Savings: hundreds of dollars a year
When deciding to buy a car it’s worth spending the time to look at what gas mileage it gets. That money saved at the pump will have a big impact on future spending, particularly if (or when) gas prices rise. A sporty car that gets 30% less gas mileage may seem exciting, but if you’re a commuter that’s going to eat into your pocket. Just a 10 mile per gallon difference in efficiency will add thousands to the cost of fuel over the life of the car. Thousands of dollars that won’t be in your pocket.
Even just buying a car that displays live fuel efficiency in a readout can help drivers calibrate their driving toward more fuel efficient habits. Thus saving money.
Americans spend $2,000 to $3,000 a year in gas. A 10% more fuel efficient car on the next upgrade will save hundreds a year.
Potential Savings: hundreds of dollars a year
It’s tempting to hammer the accelerator to get up to speed. But taking the time to drive in a smooth manner can save gas. The Department of Energy estimates this to have anywhere from a 5% to 33% impact on fuel efficiency. Flooring the accelerator at highway speeds has a 33% reduction in fuel efficiency! That means taking it slower on the ramps and while overtaking other cars on the highway will mean big savings at the pump.
Look for Education Discounts
Potential Savings: $200-$500 a year
Teach at a school? Have a kid in school? In school? Work for a school? Take out your ID the next time you’re buying a piece of technology and see what kind of discount you can get. At the Apple store you can get a 5% to 10% discount on hardware. If you were going to buy the laptop or iPhone anyway, it’s worth jumping through an extra hoop to save $150 on a laptop.
Calculate True Cost of Various Possible Modes of Travel
Potential Savings: hundreds a year
It’s worth sitting down to calculate the cost of a trip using multiple modes. Will a car really save money once all the gas, plus wear and tear, is calculated? Will paying for the speed of a plane be worth it once a connection is delayed and factoring in security wait times and the drive to the airport? Although trains aren’t as popular for very long hauls, they sometimes can surprise with certain routes for convenience and lack of hassle. Usually a plane works out for long hauls but for mid-length routes trains can sometimes surprise with cost effectiveness.
Taking the time to calculate the mileage and true car costs as well as look up train possibilities can be a pain, but it is worth it to save money on the travel.
Use Online Bill Pay
Potential Savings: hundreds a year
Stamps and envelopes cost money, month after month. Writing out a check, placing it in an envelope, putting it outside for the mail, all of that takes time and money. Use online bill paying instead and save on stamps. Even better, using online bill pay means never having to wonder if the check really did get through the mail to its recipient.
All it takes is one missed credit card payment to raise the interest rate tremendously! The rate can end up going from an average of 15% to a high of 29%. That can add hundreds of dollars a month of interest to the average American’s credit card payments.
Slow Down While Driving
Potential Savings: $200 a year
According to the Department of Energy’s research a car is roughly 17% less efficient at 70 miles per hour than it is at 55. Every 5 mile per hour increase in speed costs directly at the pump, yet drive on a highway on any day and everyone is rushing around at top speed and in a hurry.
Taking it easy can reduce gas costs every week. No one has to hypermile to enjoy these effects, just shave some speed off. Sitting a safe distance behind a truck can save gas as well, through drafting.
Use cruise control to set speeds and keep the engine ticking over evenly, no matter what the speed chosen. This helps reduce gas usage from accelerating at varying rates.
Hunt for Savings on Prescription Medications
Potential Savings: up to $500 a year on average
Prescriptions add up quickly. One quick way to save money is to request a ‘generic’ or store-brand version of the medicine. If it’s available, generic brands of medicine can cost a quarter of what the name brand does.
Telling your doctor you are on a budget and asking if there is a cheaper prescription that gets the same result is also an option.
Coupons help. There are now apps like GoodRx that hunt for coupons and let you compare local and online drug prices for your prescription.
Online pharmacies can save money, but watch out for frauds! To make sure an online pharmacy is legitimate, use a National Association of Boards of Pharmacy certified online pharmacy when looking for cheaper prices online.
Make Your Own Products
Potential Savings: $200-$500 a year
Check out our article on 19 Unexpected Money Tips From Moms to see how to make your own baby wipes as well as save on many other childcare products.
Reconsider Your Cellphone Bill
Potential Savings: $200 a year
The average American spends almost $100 a month for their cellphone. It’s important to pay attention to our cellphone bills to make sure they’re still working for us. A tweak here or there can save enough money to pay for a whole new cellphone.
Read more: 3 Steps to a Cheaper Cellphone Bill
People can also switch to prepaid cellphone plans after they’ve paid off their existing phone or finished their current contract.
Cancel Your Land Line
Potential Savings: $200-300/year
You have to think carefully about whether you want to lose the quality of sound that comes with a land line. You’ll also have to worry about making sure a phone is charged in case of needing to dial emergency services, as not all states allow disconnected phones to dial 911. But it’s a quick and easy way to save money when a basic land line can cost up to $25-$30 a month.
Don’t Buy As Much as You Can Afford
Potential Savings: $200-$500 a year, or more with high end cars
There are debates as to whether to lease, buy a new car or buy used. A new car loses almost 10% of its value the very moment its driven off a lot, though, making a new car something few financial experts advise people to purchase unless they make a lot of money.
While many people use their car as a way to demonstrate how well they are doing, a car is usually a depreciating asset. Getting as cheap a car as possible without sacrificing reliability will pay off in spades. The extra money saved per month can go towards savings.
Change Air Filters Often
Potential Savings: ~$200 a year
The air filter prevents debris from entering an engine as it sucks in air to power the explosion inside the engine that drives the car forward. But as an air filter becomes clogged, it slows clean air from getting to the engine. This reduces the engine’s efficiency and ability to work well. Changing fuel filters regularly can increase fuel efficiency by up to 14%. The average American spends almost $2,000 a year on fuel, so the filter doesn’t just pay for itself but can save hundreds of dollars a year.
Not changing the air filter can also add to engine strain, eventually putting your car into the shop sooner. It takes minutes, it’s cheap and it saves money. Manufacturers recommend changing filters anywhere from every 30,000 miles to 45,000 miles. Check your vehicle’s manual or online to see what’s advised.
Consult a Travel Expert
Potential Savings: $200-$500 a year, depending on frequency of travel, more if a heavy traveler
Or did it?
Figuring out the best time to buy a ticket and knowing for sure the price was right isn’t always easy to do when we have a busy life and little time to figure out how exactly to best plan a trip. Should one use points or cash. Should one buy far in advance or closer to the trip? It turns out travel agents still exist and their expert knowledge can save enough money they’re worth consulting.
Figure in the time spent browsing for deals per hour and multiply that by how much you charge for you time. Did you come out ahead? This US News article quotes travel agents who’ve seen customers save hundreds of dollars per ticket thanks to their expertise.
Shop For Used Clothes for Kids (Particularly Play Clothes)
Potential Savings: $200-$500 a year
Kids grow so fast that all the cute outfits are going to be too small before anyone realizes what just happened. As a result, most clothes can be purchased at consignment stores for a big savings in price. Even if parents are worried about appearances, for play clothes and clothes around the house, kids won’t ever know the difference between brand new and previously owned.
Some neighborhoods do clothes swaps between parents a couple times a year. Keep an eye out for announcements. Watch area online garage sales for lots of clothes and mom-to-mom sales.
If you have to have that brand clothing, consignment stores in upscale neighborhoods are worth the drive to.
Use LED Lights
Potential Savings: $500 a year
According to Energy Star, LED lights use 75% less energy than a regular bulb and last 35 to 50 times as long. Replacing all the lights in a home with LED lights will have an impact on electrical bill. It will also save time on replacing burned out bulbs.
How much can you save? The monthly cost of incandescent bulbs can run around $40-50 of an energy bill, where as the same amount of light a month would be cut down to about $10 with LEDs. That savings adds up.
Get More Home Insulation
Potential Savings: many hundreds a year
Just as sealing windows can help save on heating bills, insulating a home can pay back dividends. The older the home, the less insulation it likely has. The US government has a page where you can estimate how much insulating your home will save you, and also includes tips on how to get an assessment to determine how much energy is being lost through bad insulation.
This doesn’t just include more insulation in the roof, but making sure that cracks around doors and windows are properly sealed as well. All of those are places where cold air can seep in or hot air escape.
Ambitious home owners can purchase a thermal energy detector on their own. Here’s one on Amazon for $30. That $30 might be able to save a home owner far more on energy bills per month if they weatherstrip, caulk and seal all the places in their home where energy is being lost due to insufficient sealing.
The average American home spends anywhere from $800 to $2,000 a year on heating, depending on whether they use natural gas, electricity, propane or heating oil. Insulation can cut that down as well as pay back the cost of installing.
Set Up a Rewards Account for Existing Spending
Potential Savings: $200-$500 a year, maybe more
Using rewards accounts to maximize shopping is a great hack. Use one airline for travel repeatedly, then a rewards card for that airline can pay off. The same goes for gas stations, department stores and bulk grocery stores like Costco or Sam’s Club. But be careful, getting a store card can lead to increased spending if discipline isn’t used. This only saves money if people buy things they already had to buy, not if they use the lure of savings as an excuse to overspend.
Americans spend an average of about $2,000 a year on gas. Some of the better gas rewards cards offer five points a dollar spent on gas. Nearly 10,000 points, redeemed as cash, would be worth about $100. Add in cards aimed at groceries and department stores, it’s easily possible to save hundreds a year.
Look for Repeating Automatic Payments You Don’t Need
Potential Savings: $200 a year
Falling into the habit of setting up automatic payments and then walking away is easy. But an audit of all the automatic payments set up in the past is important, as sometimes things no longer used can still be set up to charge us. Sometimes mistakes can be make by the bank, as well. Once a quarter, checking to make sure that all automatic payments are actually payments you want to keep paying can yield savings.
Someone who no longer uses Netflix can save $7.99 a month. That’s almost $100 a year. Find just two repeating payments just under $10 a month and someone is saving in the $200-$500 a year range!
Change HVAC Air Filters in Your Home
Potential Savings: $200 a year
In order to shove the air through those ducts, HVAC systems first have to push the air through a filter. If that filter is clogged with dust it takes more fan power to push the air around the house, raising the electricity bill. By changing the air filters you not only save money and make heating and cooling more efficient, you get cleaner air as well.
Changing filters can cut an average of 10% of utility costs. With the average America household spending $2,000 a year on heating and cooling this tip can save hundreds easily.
Potential Savings: $200 or more a year
When doing home improvement it can be very easy to buy the latest and coolest tools for the project. Yet many people aren’t going to be doing home improvement all year long for years to come. The more specialized the tool, the more expensive it can be. All the savings from home improvement could be well flushed away by a parade of shiny new must-have tools. Asking around among neighbors, friends and family to find who has tools that are needed can save a lot of money.
Additionally, asking for tools and advice can lead to advice that could help shorten the amount of time spent on a project.
Or, You Can Rent Specialized Tools
Potential Savings: hundreds a year
If you cannot find tools to borrow it’s time to search around for a tool rental place. Specialized and complex tools that you’re only going to use once, or a for a few days, can be rented to save on money. But the money saved on not having to buy the tool will be worth the hassle of calling around to find a rental place, as well as having to return the tools when done.
An auger for digging post holes can cost $600-$700. Renting it for a day? $60.
Plugin a Smart Strip
Potential Savings: anywhere from $100-$300 a year
A second approach is to use a device like a Kill-a-Watt that detects how much power is actually being used. Old or malfunctioning devices or appliances could be using more power than expected. Checking power usage with a monitor can help anyone find their biggest energy wasters and figure out a plan to replace them or turn them off.
Women: Watch Out For the Women’s Tax!
Potential Savings: upwards of $200 a year
Women can save money by buying men’s razors and skin-care products, which are often the same item but slightly marked up.
Potential Savings: $200-$500 a year
Not everyone wants to become an extreme coupon hunter. It might not be worth the hours. But there are online coupons now that are easier than ever to search through. Many grocery stores now have online systems that automatically deduct your coupon ‘clipped’ via an app. When buying a big ticket item, it’s always worth typing in the name of the item you’re about to buy into Google and then adding the word ‘coupon’ to the search to see if anything happens. Why leave money on the table?
How much can coupons save? Many families can cut hundreds of dollars a month off their expenses with coupons. And with coupons being even easier to find and use on smartphones it doesn’t need to take hours of cutting and planning. Just download an app.
Read more: 10 Best iPhone Coupon Apps to Save You Money
Potential Savings: $200 a year
Fans move air throughout the home. That means during the summer they move cool air through the house. The movement of the air over your skin helps cool you down. It also means the cooling air moves into all the warm spots in the house to cool them down evenly.
The reverse holds true for winter. Fans distribute the hot air throughout the home and helps even out the temperature variations. No more cold spots!
Fans can cut heating and cooling costs by 10%, and the average American yearly spend on heating and cooling is about $2,000.
How to Save Hundreds of Dollars a Year
These tips can save you somewhere in the vicinity of $100 to nearly $200 a year. Fold in a few of these together and the savings can add up, but some savers might not find the time to do them matches up with how much savings can be found.
Don’t Finance when Buying a Car
Potential Savings: varies by APR and fees, but hundreds a year over the life of the average American car payment cycle
There are two reasons to strong consider rejecting financing when buying a car. The first is that paying cash forces the buyer to consider what they can truly afford. It also prevents affordability creep. Often car salespersons focus on trying to find a monthly amount you can ‘afford’ and then they backtrack from there to figure out what the maximum amount of car a buyer can afford is. Coming into negotiations with a cash amount prevents someone from drifting upward. Paying cash also means that financing costs aren’t added to the cost of a car. A $10,000 car with a very low 3% APR over 4 years will still cost $624 extra. Not everyone has the kind of credit score to get a low APR. Someone getting a 7% APR car loan will be adding $1,494 to the cost of the car due to financing. That’s almost a 15% ‘tax’ due to financing.
There are two reasons not to pay cash when buying a car. The first is if someone can get an APR that’s less than what they could make off investing the cash the car would have cost. The second is if a buyer cannot afford a reliable car with the cash on hand. Buying a $2,000 junker that will break down in 8 months will not be cheaper in the long term than an $8,000 used, reliable car on a four year loan.
Buy a Chromebook
Potential Savings: $100-$150 a year over a typical computer upgrade cycle
Cheap laptops and desktops used to be hobbled by off-brand software that wouldn’t let do what needed to be done and were horrifically underpowered. But with Chromebooks most of your work is handed off to the cloud, letting manufacturers develop cheap computers that do most of what everyone needs with minimal fuss.
Chromebooks are also super easy to administer, if something goes wrong you can wipe everything off a hard drive and start over from scratch in just minutes by logging off and on again. Instead of spending thousands, a good laptop that does most of what people need can be found for under $200.
Cut Back on Expensive Coffee
Potential Savings: $100-$150 a year (depending on consumption)
It seems that almost every article about saving money talks about coffee. But that’s for a good reason. A daily latte, like a daily lunch, adds up. Break the habit and bank the money. Or make your own and save! There’s a reason everyone keeps talking about how small habit changes can save money.
Fancy coffees have gotten even more and more expensive, even just switching to plain black coffee with some creamer can save money when added up daily over the years.
Pack Your Own Snacks When Traveling
Potential Savings: $100-$150 a year (depending how much you travel)
Grabbing dinners at expensive road-side diners or pricey travel plazas and buying over-priced snacks can quickly add to the cost of getting from point A to point B. Airport food is also expensive and food on the airplane where you are a captive consumer is even far more expensive. Planning goes a long way toward saving on food costs while traveling. Shopping at the grocery store ahead of time for snacks that preserve well will go a long way to make car trips, plane trips or any kind of trip a lot cheaper.
Buy Videogames Used or Use a Videogame Subscription Service
Potential Savings: $100-$180 a year
It’s easy to want the latest and greatest videogame. But they’re expensive on launch day. After everyone has had a chance to play them and they’re not brand new, prices drop. You can also buy used off Amazon or at Gamestop.
Another way to save is buy using a subscription service. Gamefly has monthly rentals of games for as low as $15.95 a month for a single game out at a time. You can also buy used games from Gamefly.
Upgrade a Year Behind the Latest
Potential Savings: $100-$150 a year
Waiting for the latest model of any computer or cellphone before purchasing it means you can buy the older model for far cheaper. This will add up over a life time and you’ll avoid getting sucked into buying newer models of things that are getting the kinks worked out. Fewer bugs, less money spent.
Sign Up for a Utility Time of Use Plan
Potential Savings: up to $170 a year
Many people don’t realize this, but utilities often try to encourage their customers to delay their electricity usage until later in the day, when they don’t have as heavy a load. Sign up for a Time of Use Plan, and utilities will offer cheaper night-time rates. Set a washer and dryer to run later at night when the load is lower and you can save on your electricity bill. Same with your dishwasher.
Savings can be as high as 13% off your bill, depending on the utility and how well you can take advantage of it.
Get a Programmable Thermostat or Turn Down Your Thermostat
Potential Savings: up to $180 a year in energy costs
One of the fastest ways to cut home heating and cooling bills is to get a programmable thermostat. These used to be clunky devices that were hard to program and thus hardly ever used. However with the advent of the Nest thermostat the user interfaces of programmable thermostats have come a long way. Coupled with sensors that automatically detect if anyone is in the house and cut heating and cooling accordingly, iPhone apps that let users track how much energy they’re using or saving, a programmable thermostat is a fast way to cut the bills.
Cutting back on the thermostat can cut 5% to 15% a year off energy costs.
Subscribe to Frequently Used Baby Products
Potential Savings: $100 a year and up
Amazon.com offers subscriptions to frequently used products, like diapers or baby wipes. Commit to getting packages monthly and save from 5% and up, including coupons on the initial purchase. A year of diapers and wipes can cost upwards of $1,000 a year. 5% off that will save parents $50 or more. Amazon Mom offers 20% off on diaper subscriptions, boosting the savings up even more.
Homeowners: Check for Free Mulch
Potential Savings: $150 a year or more
Landscaping can get expensive. A large part of that is mulch, which costs $3-$6 a bag. But many municipalities have free mulch. The town takes all the branches and trees back to be mulched. They often also let local residents add to their brush pile. At the beginning of summer, they’ll offer free mulch to residents. It’s worth checking into, as it can save a lot of money when landscaping or gardening.
Entertain Your Kids (or Yourself) For Free
Potential Savings: $150 a year
It’s hard to be the sole source of entertainment for your kids. It can be easy to set them down in front of a screen when there isn’t money for day trips to places that will entertain and intrigue them. But with some scouring and planning, entertainment that doesn’t cost (much, a lot) can be found.
One source is museums that offer free kids days or free passes (or even 1/2 price days). Parks are usually free and are great for letting kids tear around. Hikes through nature preserves and trails are low cost ways to entertain kids and enjoy the world.
At home cheap crafts from stuff already at hand can keep costs down. Not crafty? Get online: YouTube videos offer a plethora of cheap home crafts that walk anyone through the whole project. It’s a learning experience for everyone.
Stop Buying Things That YOU Want for Kids
Potential Savings: $150 a year (or far more, depending on family spending habits)
Many parents purchase cute outfits and toys that they want their kids to have. This has more to do with the parents than the children. One way to save money is to focus more on what the children need and keep things simple. The same goes for toys that children may not really be interested in.
Hang Clothes to Dry
Potential Savings: as much as $190 a year
To help a dryer last even longer and save money on energy costs hang clothes out to dry. Lighter undershirts and shirts can easily be put on a drying rack inside the house. But a clothesline with some pegs outside can be surprisingly fast. Depending on the cost of electricity and the number of loads run, a dryer is responsible for $20 to $50 of a home’s electrical bill per month. Hanging clothes out to dry puts money right back into the wallet. Even just using the dryer for heavy clothes and drying lighter clothes inside can help cut the electrical bill.
How to Save a Hundred a Year
The following tips will save roughly a hundred dollars a year for an average person. While $100 a year isn’t that much, someone trying to really cut some extra corners to save money can chain a few of these together and make sure to put that money aside.
Watch Out for Pricey Razors
Potential Savings: roughly ~$100 a year
Five blades, six blades, moisturizing strips and flexible heads; razors are getting more and more advanced. And that means they’ve gotten more and more expensive. Some brand name razor blade heads cost as much as $5 a pop.
In addition to watching for sales and coupons, online services like Harry’s or Dollar Shave Club that ship you razors via subscription for $5 to $9 a month can save money. Bonus: never running out!
Use Your Local Library
Potential Savings: $102 a year
Libraries don’t just have books. There are DVDs available that can cut the cost of entertainment if you’re willing to wait on the latest movies. It’s a great way to catch up on classics or revisit some favorites. You can also save on new book costs by utilizing libraries and inter-library loans to get almost any title you need.
Change Your Own Oil
Potential Savings: $80-$140 a year
Changing oil in a car can seem somewhat daunting the first time. But it can save $100 or so a year. Changing the oil every three months or 5,000 miles helps keep the engine’s parts well lubricated and is an important piece of preventative maintenance.
Raise Car Insurance Deductible
Potential Savings: $80-$110 a year on average
Call your car insurance company and see how much raising the deductible will save you every month. Then put that difference into a savings account. Once it matches the deductible, you’ll be ahead of the game.
Car owners will have to think carefully about whether the yearly savings is worth having a small deductible, however.
Use Less Water
Potential Savings: $100 a year or more if methods are combined
Water bills can vary, depending on location. If paying a municipality for water shaving a little bit of money off that bill can help. Some areas of the country are seeing rising water prices. The biggest water cost is for those with large lawns. Switching to a more drought-resistance lawn strategy and not watering a lawn can save a family $10-$20 a month.
Other water-saving tips include using a faucet aerator on taps, using low-flow showerheads and putting a brick in the toilet tank. Individually any of these will be small decreases, but combined will have an impact on the water bill. The EPA has a calculator to help you see how much WaterSense labeled products can save you money.
Seal Your Windows for Winter
Potential Savings: $20/window a season
Windows are great because they bring natural light into the home. However they’re often the biggest source of heat leakage. One quick way to save big money on heating bills is to seal the windows for the winter. Most hardware stores sell window sealing kits. They can often be installed in minutes no extra tools other than a hairdryer. The trapped barrier of air between the plastic wrap and the window prevent the home from losing hot air as quickly, thus saving money during winter.
A $15 kit takes care of five windows, saving $80.
Raise the Deductible on Home Owner’s Insurance
Potential Savings: $100 a year and on up, depending on the value of the house and amount insured for
Another place to look closely is home owner’s insurance. Protection against disaster is necessary, but by raising the deductible on the insurance policy the monthly payment can be reduced a little bit. Just make sure to have the deductible set aside somewhere, in case a claim needs to be made.
In some cases this may not save enough to make a difference, so it’s important to call your home insurance agent and walk through the options with them.
Eat More Rice
Potential Savings: $100 a year
Rice has been used as the center of many dishes for centuries and is the primary focus of many different societies. It also is a great way to fill out a meal cheaply. Use a bed of rice and then expensive meats and sauces for flavoring.
Almost half of humanity does this to keep food costs down, it’s one of the oldest tricks there is for stretching a food budget.
Make More Soups and Stews
Potential Savings: $100 a year or more
It’s simply stunning what can be put into a large pot with water that turns into delicious stews and soups. Handy parents have been making expensive ingredients last longer with soups and stews since time immemorial.
Add in a decent crock pot and it’s easy to start a soup or stew on the way out of the door and return to a delicious, hot meal after work. Even better, an affordable meal!
Eat More Vegetables and Fruit
Potential Savings: $100 a year or more
They’re also less calorically dense than sugar or corn-filled processed snacks and far better for you.
Check Tire Pressure
Potential Savings: $100 a year
Underinflated tires can cause up to a 5% loss in fuel efficiency, costing money at the gas pump week after week. Even worse, underinflated tires can cause tread to wear 25%. That means having to replace tires far sooner than needed. On the flip side, overinflated tires can blow out, again causing car owners to have to replace tires far sooner than needed. A pricey mistake.
What pressure should your tires be? To find that out, look at the driver’s side door frame with the door open. The car manufacturer will list a cold air PSI number there. The PSI number on the tire itself is not the recommended PSI for your car and tire, it’s actually the tire’s maximum PSI.
How to Save Under a Hundred a Year
Don’t Go See Movies Right Away
Potential Savings: $25-60 a year and up
New run movies cost a lot. And theaters barely make any money off just the ticket sales, they run up the costs of concessions to make their profits. Getting out to see a brand new movie can add up quickly. It requires some personal discipline, but waiting for the movie to come out in a dollar theater can save a lot of money. It could save you from going to see bad movies on opening night. Let someone else take the hit!
Waiting for movies to come out for rental saves money as well. Why not enjoy a movie at home with cheap popcorn you make? You can pause it when you need to, as well. And if you enjoy talking during a movie no one shushes you. And if you can’t stand hearing people talk during a movie, you can have a totally silent room.
The average American watches almost 4 movies a year, with an average cost of $8-9, so this could save $25 to $60 a year on concessions and ticket sales.
Only Use Your Bank ATM to Avoid Fees
Potential Savings: on a couple transactions a month $60-$70 a year
Take the time to pull cash out from your own bank ahead of time, or limit the impact by taking out a larger amount of cash infrequently.
Shorten Dryer Vent Hose
Potential Savings: $20-$30 a year
Visually inspect driver vents. They should take the shortest possible distance out of the house. The longer the hose is, the more power the dryer needs as will have to pump harder to get the steamy air out. The hose also needs to be free of lint. Lint clogging up the hose will make the job harder, so a clean hose will save energy long term. It will also help the dryer last longer, saving money in the long term.
Install Dimmer Switches
Potential Savings: $10-30 a year
By installing dimmer switches the overall light usage in a home can be cut back.
Turn Down the Thermostat on a Water Heater
Potential Savings: $20 a year
Heating water takes energy. The water heater in a house gets the water in a tank heated up quite a bit. But is water that hot really needed? Experimenting with dialing down the heat could save electrical costs or natural gas costs. In some cases contractors leave the water heater turned up higher than its needed. Anyone who has turned on the shower to piping hot and had to jump back knows the water can be far too hot.
Insulate Hot Water Pipes
Potential Savings: $8-$12 a year
Since water takes a lot of energy to heat it, the last thing anyone needs is for the hot water to get cooled off on its way through the pipes. Insulating hot water lines keeps the water hot as it moves around the house, saving energy and saving money.
Lighten Your Car
Potential Savings: almost $2 a year per 100 pounds
The US Department of Energy estimates that every 100 pounds extra inside a car decreases fuel mileage by 1%. So make sure the trunk is empty of anything that could weigh the vehicle down. Estimates on how much gas this can save vary depend on the fuel efficiency of the car in question, but some experts estimate it can save money throughout the year.
Use Rechargeable Batteries
Potential Savings: $60 a year
With so many devices using so many batteries, not to mention so many kid’s toys using batteries, it’s worth buying an extra large battery recharger and stocking it full so that there’s always a fresh one to reach for. Over time, being able to recharge batteries saves money over just tossing them out after a single use. However, rechargeable batteries and the charging pack cost a lot up front. It will take a while to recoup the costs.
Behavioral Changes That Will Save You Money
These ideas will save money, but it’s hard to say how much. They are behavioral changes that set the stage to help people save. Some of these tips could turn someone’s entire financial life around or just make it easier to keep on track. All of them are worth considering.
Keep Cheap, Healthy Already Purchased Snacks Around
When shopping it can be easy to justify not buying any snacks because we want to save money and focus on the essentials. But we know we often need to snack throughout the day. If there are no healthy, affordable snacks lying around one will be strongly tempted to spend money at the snack machine where the markup is going to be very high. Why? Because they know they’ve already got you.
Start the Day With a Solid Meal
A breakfast with slowly digested complex carbohydrates and some protein will fill you up. Heck, just eating any breakfast helps.
Take this as a challenge: eat your leftovers! How many times do we come home with a doggy bag of food from a restaurant that we couldn’t eat… that just sits in the fridge until it goes bad? Too many of us have gotten used to the idea that each meal needs to be something prepared new. Or we often forget that container pushed toward the back of the fridge until it’s time to clean the fridge.
Grow Your Own Food
We can’t all start turning our back yard into a cornfield, sure, but some of the most expensive grocery store items can be grown on your own. Herbs are often the most expensive per ounce item at the grocery store and they make great starters for new gardeners. Herbs grown in small decorative containers right in the kitchen where they can be harvested on the spot for cooking can be quite a hit and help save money. Peppers and garlic are two other favorites that can be pricey in the store.
Make a Meal Plan
It’s hard to really save without a plan and that goes for meals as well. By planning out the week’s meals and designing a shopping list accordingly, one can budget out the food expenses for the week ahead and control spending.
The plan might change, as no plan survives contact with reality. But without a plan to adjust from how can we expect to tackle the chaos?
Freeze Prepared Meals
The freezer isn’t just a tool for grocery store frozen foods that are convenient to defrost and serve later. It’s one of the more underutilized savings tools around. Double the amount of food in a recipe and freeze the other half of the meal for heating up next week. Spend a single day of the week prepping and freezing meals for the rest of the week. Buy in-season fruit and freeze it to use later in the year.
Crock pots are a magical food prep hack. Put in a roast with veggies and potatoes in the morning and you can come home to a house full of the smells of an amazing, slowly simmered tender roast sitting in a bed of sides. No cooking needed that night, just an instant dinner in less time than it takes to get fast food and for less per serving. Crock pots will also make stews, soups, briskets, chilis, stroganoff, casseroles and more.
In addition to crockpots there are bread machines, rice cookers and even sous vide machines like Mellow that will all let you set the time you want a meal ready.
Master a Work/Life Balance
While no immediate savings might come out of this, in the long term mastering balance in life can lead to reduced stress. Stress has negative medical effects, breaking down the body, which lead to higher hospitalization rates.
Workers who get enough downtime show improved productivity. The idea of the 40 hour work week came out of studies that show rapidly diminishing returns after 50 hours of work. We might think we’re working hard and people might expect 80 hour weeks out of us. But in the long term, all that will do is break our health down and burn us out.
Get Regularly Scheduled Medical Checkups
Just like making sure a car is tuned up, has fluids and the mechanic has checked it over before problems occur, it’s important for people to get checked over. Doctors, dentists and vision specialists can all spot early problems with our health that can then be addressed before they spiral out of control, thus costing far more than they had to.
Donate Unused Clothes, Get a Tax Credit and Reduce Clutter
According to people who study such things, as many as 80% of the clothes are rarely used. We tend to stick to a favored handful of items. As a result, it’s worth going through a closet to see how many clothes could be packed up for donation. Keep the receipt from donating and come tax time 80% of your closet turned in will now be a tax deduction, lowering tax bills.
Additionally the reduced clutter will save time. No more hunting for clothes that fit or for clothes you like better. Time saved adds up.
Adopt a Uniform
People can spend a lot of time trying to find the right outfit in the morning. Matching clothes up can take up time. When out shopping, decisions have to be made about outfits. Or… you can adopt a personal uniform. Famous leaders like Steve Jobs or the president of the USA, Barack Obama, have been on record as choosing two or three simple outfits so that in the morning only a couple seconds are spend on deciding what they’ll wear. Variety can be found via varying tops, which are alternated with just a couple bottoms. Standardizing on socks means no hunting around for mismatched socks.
You can find out more about ‘capsule wardrobes‘ on YouTube.
Find a Community of People Trying to Save
Studies show that we adapt our behavior to that of the people around us. Our friends, therefore, have a huge impact on what we do. Which means that if saving is important to us we have to carefully consider who we spend most of our time around. Are we surrounding ourselves with sensible savers who have tips and tricks to share and don’t suggest dinners out at expensive restaurants? Or are we only around friends who are always trying to ‘Keep up with the Joneses’ who could sabotage savings goals.
This doesn’t mean one needs to get rid of existing friends. But building a community of like-minded savers can help remind savers about their goals.
When facing a morass of credit cards the numerous bills can get overwhelming. Simplifying the payments can simplify and reduce stress. While getting a smaller, single payment will still leave interest gathering, but there are ways to get debt negotiated. The best way to do this is to talk to nationally certified debt counselors who can negotiate with the cards and find a workable plan to make repayments, as well as offer other debt advice. For more about debt settlement read our article Debt Settlement: How It Works and Why It Will Cost You More.
Of course, it won’t help if that money saved from negotiating a lower monthly payment is used to spend again. It’s important it go to savings.
Create Shopping Lists
Shopping lists put a hard limit on what people will spend when out shopping. No more forgetting what is home and what is needed. Planning ahead of time allows one to search online for coupons. It also allows for one to plan cheaper meals as well.
There’s a second use for shopping lists: delaying purchases. Non-grocery lists of things that are on a ‘wish to buy’ list remove impulse purchases from the equation.
Never Buy Something Instantly
Impose an arbitrary time limit on how long it takes before buying something. Thirty days. Ten days. However long it is, it needs to be enough for someone to lose just a little bit of excitement. This helps reduce impulse purchases and allows one to consider whether the item is truly needed.
Anyone who masters the art of waiting long enough then masters the ability of saving money by buying something once it has come down in price as well. Buy phones a generation behind buy just… waiting. Buy videogames six months after they’ve launched and save. See a movie after it can be purchased for cheap. Patience is one of the most amazing savings tools there is.
There is a lot of clutter in modern life. So much so that there are entire industries around offsite storage for people’s stuff because they don’t have enough room. By being extremely mindful about what is purchased, being reluctant to buy things just for the sake of shopping, one saves money. By committing to owning less stuff, less stuff will be purchased.
This is a radical shift in thinking and is not for everyone. But having less stuff saves money and for many reduces stress.
Family and Gift Giving: Set Pre-Agreed Limits or Get Creative
When families get together for the holiday season it can be a very expensive time. Setting up pre-agreed limits on gift costs is a first step to controlling the costs. Using a gift exchange combined with pre-agreed limits is another way to control costs. Gift exchanges consist of putting everyone’s name in a hat and randomly assigning each family member someone to get a gift for. It lets everyone get a slightly nicer gift for each other as well.
Some families exchange only hand-made holiday gifts to save money and surprise each other with neat, one of a kind gifts.
Start Learning More About Personal Finance
The more we study something the more likely we are to master it.
Cut Up Credit Cards
Multiple studies show that people using credit cards instead of cash spend more money. Being forced to give up cash in hand is more painful. As a result, we make different spending choices when we have to hand over actual cash. But a piece of plastic being swiped feels less consequential and leads to more carefree spending.
Getting rid of credits cards and living off cash can be a powerful behavior changer.
Create a Budget
Without a plan of attack for how to spend and save, it will be harder to hit financial goals. A plan is also called a budget. Budget may sound like a dirty word, but without a financial plan people are just spending money from day to day without any larger picture.
Successful savers have plans. Read more about how to create a budget here.
Track Your Finances
If you don’t track something, it can’t be improved. Tracking everything you spend can lead to awareness of what is actually being spent. Life is full of distraction; it can be hard to remember a few dollars here or there during the week. But over months that adds up quickly. By tracking it, we can tell where the money went. Both using a budget, or just plain tracking spending using an app, can increase chances of controlling and saving money.
Check out our guide to expense tracking apps.
Set Financial Goals
One of the reasons people don’t see the point in making sacrifices right now in order to save is because they don’t have any clear vision of what they’re saving for. Sitting down and thinking about all the big goals and reasons you need to save will let you work backwards and towards specifics that create a framework for planning.
Track Your Net Worth
It’s important to hit financial goals. By focusing on setting aside money while not keeping books balanced one could end up saving cash, while piling up debt somewhere else and not actually getting ahead. Net worth is determined by adding all the debt and adding up all the savings and assets one has to see what the final figure is. A house is an asset, the home loan is debt. Cash in the bank is an asset, a credit card is debt. According to the US Census Bureau the average American net worth is $68,828. That varies depending on age. 35-44 year olds have an average of $35,000 net worth. Average Americans close to retirement ages of 65 to 69 years of age average around $194,000.
Tracking net worth keeps one honest about the big picture and on track.