How To Save Money: 2020 Edition
Learning how to save money is easier than you think. Establishing good habits and setting goals is an important part of how much you will be able to save. We’ve broken it down in two sections: Spend Less and Earn More.
These two basic principles can help you start saving much faster than you ever thought was possible.
How to Save Money: 10 Ways
- Pass on the Latest Tech
- Eat Out Less/Cook at Home
- Maintain Your Possessions
- Avoid Too Much Debt
- Automate/Direct Deposit Extra Income
- Earn More Interest
- Be Intentional/Set Goals
- Side Hustles
How to Save Money: Spend Less
Budgeting is probably the first thing you should do when aiming to spend less money. You need to tell your money where to go. Have you ever had $100 in your wallet and a week later it’s gone? You might not even remember what you spent it on. That is why you need a budget… to keep yourself accountable. With all of the fantastic tools and mobile apps out there, you can stick to your budget even when you’re on the go. Keep track of your income, debts and reoccurring bills. If you want to know how to save money, you need to know where your money is going.
Pass on the Latest Tech
No one would have thought 10 years ago that a cellphone would sell for more than $1,000. But that is the reality we’re living in. The newest TVs can sell for four times more than last year’s model. Cable TV, paid streaming services, online memberships and subscriptions are some other expenses that can really add up. Evaluate what you actually need. Quality of life definitely should be a factor. However, if you can wait two years and get the same “new” tech for half off… your savings account will thank you.
Eat Out Less and Cook at Home
Do you go to Starbucks every day? How many days a week are you going out to lunch or dinner? Depending on what state you live in, the average person spends between $2,000 and $4,000 each year dining out. You can save on groceries too. Instead of shopping at Whole Foods, clip coupons and shop at Trader Joe’s or Aldi. There are plenty of affordable stores. Buying generic can save a lot of money as well. Spend some time meal planning. Set a shopping budget. These simple habits will save you thousands, and you’ll be healthier too!
Maintain Your Possessions
Earlier, I mentioned passing on the latest tech. This also applies to appliances, clothing, cars and a whole bunch of other things. Keep in mind that part of not buying the latest and greatest car means maintaining the one you’re currently driving. If you buy quality items initially, they will last much longer. Being a good steward of your possessions is a prudent approach that will also save you money.
Avoid Too Much Debt
If you haven’t noticed, debt is one of the largest problems in society today. U.S. household debt continues to grow and currently stands at $13.86 trillion. If you want to know how to save money, a huge step is getting out of debt. That being said, large parts of our society are based around debt… namely the credit industry. You will want to keep this in mind if you are applying for loan in the near future. Some debt can be useful in proving you’re a responsible borrower. However, for most people, debt can be a mountain that seems too high to climb. If you want to learn how to pay off debt, check out How to Pay Off Debt Fast.
How to Save Money: Earn More
Deposit Extra Income
A lot of people think getting a raise will solve their problems. Extra income is definitely a huge help when figuring out how to save money. Unfortunately for many people, bringing in more income isn’t the problem. Extra income does not equal more savings. If you spend your raise or additional income instead of saving it, you will not reach your financial goals. Sure, your life may be slightly more enjoyable, but making sacrifices today will pay off in the long run. Make sure to directly deposit those additional funds into a savings or retirement accounts. You’ll be amazed at how much more you’ll be able to save once interest starts adding up.
Earn More Interest
An easy way to earn more interest is by simply finding the right account. Shopping around at various banks or credit unions can help you identify the right place to keep your money. High-yield savings accounts, like money market accounts, can have a big impact on your overall savings. This list from MagnifyMoney details some of the best high-yield online savings accounts currently available. Spending a little more time and being intentional will definitely pay off.
Be Intentional and Set Goals
It’s not enough to understand healthy saving habits. You need to be intentional about mapping your goals to desired outcomes. If you know your goal is to save an extra $1,000 this month, you can start getting creative about new ways to bring in income. Selling clothing or electronics, driving for Uber or taking online surveys are just some of the ways to earn more. Whatever your income stream is, being intentional means that you are being more thoughtful and actively engaging in the direction your life will take.
In addition to the items listed above, there are many options to increase income through side hustles. Teaching, freelancing and flipping used items are a few of the ways you can earn more. In a recent article, I detailed 10 proven methods on How to Make Money From Home.
With more and more people aiming to be their own boss, the number of ways to make money online is increasing by the day. As someone who has run numerous side hustles over the years, I can say it is amazing what you can do if you put your mind to it. You might start off making only a small extra amount each week, but in a few years’ time, your side hustle could pay huge dividends.
Saving your money is great. But a savings account alone is not going to help accelerate your overall wealth. Having a diversified investment strategy has proven over time to be the best way to build and grow your overall nest egg. Successful investing begins by embracing uncertainty. There will be ups and downs, but in the long run a solid reliable foundation will help you weather even the worst down markets. Fixed income, equities, real estate and alternative investments are some of the areas you should look into when building a diverse portfolio.
Want More Tips on How to Save Money?
There are so many ways to save money. The most important thing is to start today. Whether you’re paying off debt, starting a new side hustle or cutting your cable bill, the premise is the same. The more you invest over time, the more you’ll be able to save.
For more tips on how to save money, sign-up for our Free Investment U E-Letter today!