You’ve researched tips on how to save money, and have even followed the advice on many of these lists.
But more than likely, you don’t have any more money at the end of the month than you did before. If you’re determined to build up that savings account, here’s how to use those money-saving tips to create a substantial savings account.
To do this, you first need to have a savings account. I have a separate online savings account that is different from my local bank, to make the money a little harder to get to. (It usually takes 2-3 business days to transfer money electronically).
Determine in advance that you are not going to withdraw funds from this account except in extreme emergencies (and no, a good deal on a new suit is not an emergency). Next, you need to keep track of how much money you’ve saved each week.
This will help in two ways: first, it will keep you motivated to find more ways to save even more money, and second, it will give you an amount each week that you would have normally spent, but didn’t.
Finally, once a week, transfer that final “saved” amount over to your savings account. If you think about it, this is money that you would normally have spent and won’t miss.
Here are 5 examples of money-saving tips and how much these can add up over the course of one year.
1. Drink water at restaurants
Sure, we’d save a lot more if we didn’t go out to eat at all, but we’ve had plenty of evenings where we decided at the last minute that we were too tired to cook and went out to eat instead. Instead of ordering a drink, choose water.
For a family of 4, drinks add around $10 per meal (don’t forget tip and tax). If you do this only twice a month, that’s $20 you can put into your savings account for a total of $240 a year.
2. Leftover dinner night
Once a week determine to eat leftovers. Or, if you typically don’t have any, make one night a week soup and sandwich night or another equally frugal dinner. So each time you serve a frugal dinner, consider that money you’ve saved.
A typical dinner costs a family of four $15. Even if you only consider each frugal dinner as a savings of only half that, or $7.50, that’s $30 a month you can put away into your savings account for an annual total of $360.
3. If you use loans, apply at reputable services only
If you need some extra cash to take you over some unexpected expenses, you can always opt for short-term online loans even if you have bad credit. Just make sure you are applying for a loan from a trusted loan company. And, of course, pay them back on time.
4. Air dry laundry as much as possible
If you’ve never air-dried laundry, try it for a month and then note the difference in your electric bill. I have a family of 6, so our electric bill dropped by $150.
But even if you have a smaller family and save only $50 a month, just make sure to put that $50 you would have paid into your savings account for a total of savings of $600 per year. (You do not need a clothesline or hassle with clothespins. I have a portable hanging rack and hang everything with hangars. Jeans can be hung by using the two notches in the belt loops).
If you use coupons, whenever you go grocery shopping, look at the bottom of your receipt for the total amount saved in coupons. (Not the total amount saved with a grocery store savings card, just the coupons alone).
Depending on how savvy you are with coupons, this figure is typically between $5 to $25. Use this figure as an amount you would have spent if you weren’t so frugal, and determine to put that amount into your savings.
At $10 per grocery trip once a week, that’s another $40 a month to put into your savings account for a total of $480 per year.
If you like to treat yourself to a morning cup of coffee/breakfast on the go/soda refills at local convenience stores, you know the cost of this can add up over time.
If this is your “treat” and you don’t want to give this up, how about just cutting down. If you buy 2 fewer gourmet coffees a week (at $3 a cup), that’s $6 a week or $24 a month you can put into your savings account. Annual savings? $288.
The problem with money-saving tips is that no one really notices the extra money gained from using them. So the trick is to keep track of the money you saved, and then actually saving it. I recommend transferring “saved money” once a week.
It’s easier to transfer $24 or $32 dollars, but if your monthly savings totaled $174, it’s very difficult to part with that much money at once, and it will feel like another bill. Also, keep in mind that electronic transfers are limited to 6 per month.
Note that I only listed 5 money savings tips, but just on these 5 tips alone, you can have a savings account balance of $1968 by the end of one year. Add interest, and you’ll have $2000 that was painless to save that you typically spent every year anyways.