5 Easy Ways To Save More Money–Saving money seems like a good idea, but according to census bureau statistics very few Americans actually do. The average savings rate in the U.S. is -.06%. A negative savings rate means that we are not only failing to save money, but we are spending more than we make and going in to more and more debt as a result of our spending.
If you would like get your money flowing in a more positive direction, try these 5 Easy Ways To Save More Money:
1. Make a Visual Goal.
The best way to save money is to decide on a specific reason for saving. Having a vague desire to “save money” rarely works. Set a savings goal and find a photo to represent what you are saving for.
For example, if you are saving for vacation, place a beautiful beach photo on your refrigerator to help you remember why you may want to skip ordering the pizza this Friday night.
2. Set up a second account.
You’ve heard the saying,”Out of sight, out of mind.” Use this principle to help you save money by opening a second account and transferring money every time you get paid. If you don’t see the money in your primary account, you are more likely not to spend it.
You can set up a savings account, but we have found it helpful to have a second checking account dedicated to bills and unexpected expenses. You can read more here about how we use our second account.
3. Use automatic withdrawal.
Automatic withdrawal works for the same reason as item number 2 above. If you have money deducted from your paycheck automatically and direct deposited into a savings account, you will probably not even miss it. What a great “surprise” to check your online savings a few months later and realize you actually have money. Yay!
4. Use cash.
Using cash rather than plastic actually makes a connection in your brain that you are spending money. By taking out cash for your miscellaneous and entertainment expenses and using envelopes for the money, you can clearly see how much money you have left in a category. Once the money is gone, spending is done until the next pay check. (Of course, this means you have to be disciplined not to make a run to the ATM for more money. 🙂 )
5. Collect your change.
A great way to “trick” yourself into spending less and saving more is to collect your change at the end of the day and place it in a “savings” container.
You can even commit to never spending $1’s or $5’s. Whenever you get change, the one dollar or five dollar bills go into a special place in your wallet and then into the savings container when you arrive home. You will be amazed at how much you can save this way!
What are some methods you use to get more money into savings? Share in the comments.
Great tips- THANK YOU!!! 🙂
My pleasure Tina! 🙂
Hi Tina – great question! It’s tough to balance all the demands on our budget. We do a few things to make less of an impact on our overall budget.
(1) For families who need an extra meal we have a few options that cost very little and can be frozen such as Chicken Soup and Hamburger Casserole. Add some homemade bread or a salad to make a more complete meal;
(2) As far as gifts for birthday parties, I look for clearance items when I am out shopping and I place them in a basket in our closet. The kids know that they can choose from that basket or use their own money to purchase gifts;
(3) For church giving and other charity situations we have a set amount we give each month and once that is gone we don’t give any more. It can be difficult to say “no” but you are saying “yes” to your family’s financial health which needs to come first. Don’t let anyone guilt you into sacrificing your family’s needs for the sake of any cause.
Hopefully that helps!
Could you please help me with a budget question Kimberlee? We’ve cut out as much as we can and are focusing on paying off debt and sticking to a budget, but what do you do when so many unexpected voluntary costs come up? I’m talking about bringing a meal to a family with a sick family member, donation requests at church, unexpected invites to kids birthday parties, neighbor kids that are fundraising, etc. I know saying no will keep us within our budget, but I also feel terrible about saying no to some of these unexpected voluntary costs. We’re stretched so thin, even putting $20 aside per week just for this reason wouldn’t be easy. Help please!! 🙂
I actually did the envelope method from Dave Ramsey’s Book and also did the savings envelope where you start with $1 the first week of the year and then the second week go to $2 and so on until you get to $52 dollars at the end of the year. We did save $1,300. but it was very difficult in November and December to make those payments. So for the savings envelope this year we are going to try a different method. Still saves over $1,000.
Good for you for saving $1300 Janice and for continuing to save! Thanks for sharing that idea.
I actually did the envelope method from Dave Ramsey’s Book and also did the savings envelope where you start with $1 the first week of the year and then the second week go to $2 and so on until you get to $52 dollars at the end of the year. We did save $1,300. but it was very difficult in November and December to make those payments. So for the savings envelope this year we are going to try a different method. Still saves over $1,000.
Good for you for saving $1300 Janice and for continuing to save! Thanks for sharing that idea.
Hi, Kimberlee. The Visual Goal has encouraged me, and I plan to prepare one. I have heard of it and may have even seen one or two posted at some point. You are right that the desire sometimes is not enough as a Visual. Thanks for the encouragement.
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There is nothing like the power of cash! You need to feel the money,
My debit card automatically rounds up my purchases to the next dollar, and the difference is automatically deposited into our savings account.
We have done this for years on our own & the banks are now using this commom sense as a marketing tool. We are teaching it to our kids as ell.
I don’t agree that using cash is a good idea. Many credit/ debit cards offer rewards (points) which can be used for cash back, travel, ect. Also, tracking expenses is much easier when using cards. Websites such as Mint.com is great when you want to keep track of expenses- you can create budgets and goals and see exactly where your money is going.
Anna,
I love your point but have learned there is no free lunch. Many rewards and points are of relatively little value. Besides, the money to fund these programs comes from somewhere and ultimately it is the consumer’s cost. Yes, some consumers derive more benefit from these than others and there are undoubtedly some who actually come out ahead. I know I would not be one of them. I would spend more. I would spend more freely. I would not negotiate for lower cash prices on large items. I would lose track of due dates or spend more points on items than if I bought them for cash or simply use my points on things I would otherwise do without.
All of these would ensnare me into a higher-cost, higher-debt way of life.
If you can do it, great. But even paying off balances monthly, watching for changes in the prime rate, and re-reading the fine print is not a substitute for me for paying cash. I am not sure why but somehow over time my self-discipline with credit slackens, a great sale or emergency comes up, and some how we have always ended up sliding back into debt despite good intentions.
Great points Ben – thanks for taking the time to comment.
HI Anna,
I used to feel the way you did about debit cards and credit cards. The problem I had is I would end up spending more than I had budgeted and ran into trouble. Now what I do is I save my receipts for the week and update my checking account once a week. I split the transactions for my cash withdrawals and that way I still know where my money goes. If I don’t get a receipt like when I buy gas for the car or go to the self serve car wash, I make a note of it either on another receipt or a scrap pad.
I keep my checking account balance book in Excel and have the formulas worked out so that the credits are rounded down and the debits are rounded up. (Similar to saving change but it works for my check card!) I started this on 1/13/12 and as of today, I’ve saved $284.87!
That’s great Kim!
My husband and I are just moving from our “poor” college days to his first job. I’m not quite done with school but we are about to come into more money than we have ever seen, and we are so grateful for this wonderful opportunity. One thing we have planned to do is to be sure to control our “fun” expenses like our hobbies by saving the same amount as we spend. So if we want to spend a hundred dollars on something for camping, then we also put an extra hundred in our savings or towards our student loans. I think this will help us enjoy ourselves but maintain our financial goals. Love the blog!
That is a really great idea Ali–everything in balance. 🙂
My husband and I have agreed to save our change for the whole year and that will be our Christmas budget for each other.
Neat idea Anna–thanks for sharing. 🙂
We have around 5 different savings accounts, lol. =) Each one is for different things, like auto maintenance, vacation fund, baby fund… we have automatic transfers set up each week for them. I also get cash tips, so we just use that for whenever we want to eat out/get ice cream, so we don’t touch the debit card for that.
Love this, we went on vacation once w/ the change we had collected for about 2 years:) It was fun being able to go & enjoy ourselves knowing that we had the money for it. We are saving again, & have used it for different things over the years.