The best ways to save money are to make a budget, work on paying down high-interest debt, and cut out luxuries. For example, most people could save a lot of money every year by not dining out, considering that the average American spends $2,000 to $3,500 per year at restaurants, depending on the state.
There are plenty of other ways to save money, too, and it’s important to always be on the lookout for savings opportunities, whether you’re struggling financially or currently living comfortably. The more you learn how to save money, the better you’ll be at budgeting and managing your finances in general. You’ll also have more spare cash for pursuing your goals or guarding against future financial insecurity.
Top 21 Tips for How to Save Money
- Create a budget. First, plan out what you need to spend on all of your necessities. Then, set a strict limit on non-essential purchases and stick to it. Put the leftover money in savings.
- 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.
- 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 but cost considerably less.
- Install money-saving apps. Certain apps 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.
- 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.
- 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. 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.
- 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.
- Use less energy. Ways to reduce your energy use include taking shorter showers and using more energy-efficient lightbulbs and appliances. You could also look into getting solar panels, which could be expensive upfront but help save money (and the planet) in the long run.
- Eat out less often. You can save a lot of money by making your own food – potentially a few thousand dollars per year if you eat out as often as the average American. Ordering out less often also helps you avoid costly delivery fees on top of expensive food charges.
- 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.
- Stay close to home on vacation. Travel costs 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.
- Consider switching service providers to lower monthly bills. Check with different internet, phone, utility 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.
- 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.
- 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.
- 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.
- Save pocket change. If you still carry physical money, you might be surprised by how much your loose change adds up to over time.
- 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 in the right company.
- 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.
- 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 $2,000 per month for a family of four.
- 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.
- 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).
Ask the Experts: Money-Saving Tips
WalletHub posed the following questions to a panel of experts in order to provide readers with even more money-saving advice. Click on the pictures of the experts below to read their bios and responses.
- What advice would you give to people looking to save money?
- How much money should people save in an emergency fund?
- What do you think is the biggest obstacle to Americans saving money?