Some of the best ways to save money are to eliminate small inefficiencies in your budget and change a few personal habits:
- Stop throwing away receipts
- Stop thinking in dollars
- Reassess your eating habits
- Take charge of impulse spending
- Cut back on pay-as-you-go or per-use expenses
- Eliminate reoccurring or fixed expenses
Do you know how much money you spend each month?
While it may be annoying to keep track of all the money you spend, getting out of the habit of throwing your receipts away and into the habit of writing down how much you spend is incredibly useful. Once you have a clear understanding of where your money is going, you can make informed decisions about how you want to spend it. Doing your expenses monthly makes sense because so many of your other bills are also monthly, rent, phone, electricity, etc., and you get paid twice a month.
Stop thinking in dollars
Most people think about the cost of things in dollars, which is abstract. If you start thinking about the cost of things in how much work it will take to pay for it, it will be easier to decide if you really want it. For example, if you make ten dollars and hour, after taxes, and you want to buy a chocolate cake that costs twenty dollars, that’s two hours’ worth of work. Two hours is five percent of your 40 hours. Is the chocolate cake worth five percent of the time you spent at work that week? Only you can decide.
A great way to save money is to change your eating habits
If you are like most people, you go to eat at fast casual restaurants from time to time, especially if you didn’t feel like packing a lunch or if it’s a weekend. Most people probably spend more money on eating out than they realize. Do you know how much you spend on eating out?
If you are already writing down everything you spend money on, then you know how much money you spend on eating out and on groceries. Put a piece of paper on your refrigerator and make two columns. In one, writer down how much you spend on groceries each time you buy them. In the other, write down how much you spend each time you eat out. After seeing how those numbers add up, you’ll probably see that a few meals out could’ve paid your entire grocery bill for the month. After that happens, you’ll look at menu prices and automatically compare them to grocery prices.
Another easy way to reduce your spending on eating out is to plan your meals for the week and prepare them in advance if you can. It’s much easier to get yourself to cook if you don’t have to decide what to make every single night. If you can make a large soup and eat it for several meals, that reduces your decision-making and workload even further. Maybe you can make it in a large enough batch to feed multiple people and get your friends to buy the ingredients if you do the cooking. Now you’re getting free lunch!
Have you tried to reduce your impulse purchases?
Impulse spending is a great source of budget-crushing expenses. There are a few easy ways you can save money by changing your impulse purchasing habits:
- Make a list of things you want and rank them as Need, Want, and Like. Things in the need column you must have and will spend money on. Things that you want you’ll purchase slowly as the funds become available, in the context of your financial plan. Things that you’d like, you’d ask other people to get you as a birthday present, but you won’t spend money on them. Once you have that list, you can add to it every time you see something that piques your fancy in a store or online.
- Institute a 48-hour waiting period for non-essential purchases: This will give you time to determine if they are Need, Want, or Like and if you really need them or not.
- Purchase higher-quality goods. Not only will this put more pressure on you to decide if what you are purchasing is a Need or Want, and if it is, it will last longer than a cheaper product.
Turn off your lights and drive less
- Leave your thermostat lower in the winter and higher in the summer, especially if you aren’t home
- Be sure to turn off lights you aren’t using and, if you can, unplug electronics not in use
- Walk more and drive less. If you use public transportation a lot, buy a pass
- Take shorter, and colder if you can stand it, showers and turn the water off when you brush your teeth
Spend less on fixed-cost expenses
- Get rid of Netflix or other streaming services
- Use the public library to get your books for free
- Start negotiating on your bills. Many companies, like your internet provider, will give you a discount if you ask
We all have a lot of habits we take for granted that are making it difficult to save money. You can change a few of your everyday habits and start saving money. Once you start thinking about it, you’ll probably find a few great changes that we didn’t even think of.