You can save money by making a budget, quickly paying down high-interest debt, and cutting out luxuries like dining out at restaurants and buying designer clothes. You can also shop around for the best deals, use coupons you get online or in the mail, and earn credit card rewards on the purchases you do make. We’ll run down some more ways you can save below.
23 Tips for Saving Money
1. Make a Budget
When you make a budget, you plan out how you will use your income to cover your expenses. This allows you to prioritize your necessary expenses and reduce your discretionary spending, so you can save more. To make your budget, you need to:
Figure out your income: Add up all your sources of income, such as paychecks, alimony, or Social Security benefits, so you know how much you get paid every month.
List your expenses: List where your money is going and how much you are spending on each expense. You should separate your essential expenses (rent, food, and gas) from your non-essential expenses (streaming services, dining out, and vacations) to make it easier to determine which ones you can cut out or reduce spending on.
Set spending limits: Set a strict limit for non-essential purchases and stick to it. You can base your spending limits on popular budgeting strategies like the 50/30/20 rule or create your own limits using a method such as envelope budgeting.
Put leftovers into savings: Any money that you are able to save after reducing your discretionary spending can go into your savings.
Learn more about making a budget.
2. Set Savings Goals
Trying to save money may be difficult if you don’t have a reason to save, so create a goal that can motivate you to save more. Some examples of goals include:
- Buying a house
- Going on vacation
- Paying off debt
- Getting a new car
- Wanting to retire comfortably
- Paying for your child’s college education
3. Cut Out Some Luxuries
Sometimes, people don’t realize just how much they spend on things that aren’t essential. For example, cutting out an extra coffee, movie, designer clothing item or other luxury item every week or month can add up to a lot in the long run.
4. Shop Around for the Best Deals
One store may sell an item for significantly less than another store. Prices even vary between brands within a store, and generic products are often just as good as name-brand goods but cost considerably less. In fact, Consumer Reports found that you can save 20% to 25% just by choosing generic products over name brands at the grocery store.
5. Install Money-Saving Apps
Certain apps, like ShopSavvy or BuyVia, for your phone or computer can help you save money by finding the best prices on items. They may also automatically apply discount codes you wouldn’t have known about. In addition, apps like Ibotta and Rakuten can provide cash back on your everyday purchases.
6. Use Coupons
Go through your “junk mail” and take the time to clip any coupons for merchants you visit frequently. You can also find coupons on merchants’ websites and some third-party sites.
Households can save $1,465 per year just by using coupons, according to a study done by CouponFollow. We list some of the average savings by category below.
- Groceries: $316 per year
- Household supplies: $272 per year
- Dining out: $264 per year
- Entertainment: $160 per year
- Clothes: $135 per year
7. Get Rid of Memberships You Don’t Need
If you pay for a gym membership, streaming service subscription, monthly subscription box or other membership you don’t use, cancel it. You can use an app, like the WalletHub app, that offers a subscription manager to help you find subscriptions you may have forgotten about.
Even if you only save a few dollars a month from this, it will add up over time. This falls under the category of cutting out luxuries, but it’s important enough to reiterate.
8. Set Up Automatic Savings From Your Checking Account
You can set up an automatic transfer of a certain amount of money from your checking account to your savings account each month. This will help ensure that you don’t spend money you want to put aside for the future.
9. Use Less Energy
U.S. households spend an average of $366 per month on utilities. You can try to find ways to reduce your energy use at home to save money on your utility bills. These could include:
- Taking shorter showers
- Using more energy-efficient lightbulbs and appliances
- Turning off and unplugging electronic devices that are not in use
- Lowering the temperature on your water heater
You could also look into getting solar panels, which could be expensive upfront but help save money (and the planet) in the long run.
10. Eat Out Less Often
The average American spends around $3,200 per year eating out, according to data from the U.S. Bureau of Labor Statistics, so you could save a lot of money by making your own food. In fact, you can save around $10 or more per meal by cooking at home, according to SoFi, since a meal cooked at home will cost you about $4 to $6, while eating a meal at a restaurant can cost you $15 or more. In addition, ordering out less often helps you avoid costly delivery fees on top of expensive food charges.
11. Avoid Credit Card Interest
Try to only use your credit card for things you can afford, then pay your bill in full each month. This will help you avoid expensive credit card debt. Credit card APRs are much more expensive than the interest rates on mortgage loans and auto loans.
12. Stay Close to Home on Vacation
Travel can be extremely expensive, so a “staycation” may be a better idea for people trying to save money. Chances are there are some cool things near you that you’ve never had a chance to visit.
Staycation Ideas to Try
- Set up a tent in your backyard for camping
- Indulge in a spa day
- Go to a local amusement park
- Stay overnight at a nearby hotel
- Hike a state park
- Check out a museum
- Go on a day trip to a nearby city
- Take an art or cooking class
13. Consider Switching Service Providers to Lower Monthly Bills
Check with different internet, phone, and insurance providers to see what price they can give you. You don’t even necessarily have to switch – just saying you might switch could be enough to get your current company to lower your bill.
14. Remove Yourself From Email Lists That Tempt You to Spend
If seeing the latest offers from various merchants in your inbox is something that drives you to spend a lot, simply clicking “unsubscribe” will remove that source of temptation.
15. Focus on Paying Down Existing Debt
The less debt you have, the less interest you will have to pay over time. Plus, once you’re debt-free, you can set aside whatever you were paying toward your debts every month for savings instead. You can use WalletHub’s debt payoff plans to find the fastest and cheapest way out of debt.
16. Don’t Spend Your Tax Refund or Other Unplanned Income
Whenever you get money that you didn’t know you were going to have, you should stick it in savings rather than using it on luxuries. You were already planning to live without that money, anyway, so it shouldn’t be too hard to nip the temptation to spend in the bud.
Some examples of unplanned income you should save include:
- Tax refunds
- Work bonuses
- Inheritance
- Gifts
17. Save Pocket Change
If you still carry physical money, you might be surprised by how much your loose change adds up to over time.
18. Choose Sentimental Over Expensive
Thought counts more than money, especially when it comes to gifts, and there are plenty of free or nearly free gifts that you can give when the occasion warrants it. Similarly, when you go out with friends, family or a date, consider places with free admission over expensive locations. They can end up being just as fun if you’re with the right company.
19. Work Extra Hours
While this isn’t strictly a way to save money, it’s a good way to get extra money that you can then save. If you’re paid by the hour, it can be well worth it to put in a few more hours per week to make extra cash to put into savings. That’s especially true if you can get overtime.
20. Move for a Lower Cost of Living
While this takes a lot more effort than most of the tips here, having lower housing payments and related bills can be a game-changer for your financial life. For example, the difference between the cost of living in the New York City metro area and Albany County, NY is around $5,800 per month for a family of four.
21. Sell Things You Don’t Need
If you have possessions that are worth money but are no longer useful to you, consider selling them at a second-hand store, at a yard sale or over the internet. Then, put that cash into savings.
22. Take Advantage of Discounts
If you’re a senior, a student, a veteran or a member of a merchant’s loyalty program, you may be able to get discounts on your purchases. For example, AARP members can get discounts at many restaurants and other merchants, and students can get Amazon Prime Student for half the price of a normal Prime membership (with most of the same benefits).
23. Use a Credit Card With Rewards
A credit card with rewards may offer cash back on your everyday purchases or give you points or miles redeemable for things like hotel stays, car rentals, flights, statement credits and more. The right credit card can easily save you hundreds of dollars per year, according to our research.
It’s important to note that you should pay your credit card in full each month to maximize your rewards and minimize your interest. Letting interest accrue on your credit card eats away at any savings you may get from the rewards.
Learn about some more ways you can save money.
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