So, you’re earning a decent five-figure salary, but by the month-end, you’re out of money. You’re not spending big amounts on anything, but still, you’re not able to save money. Well, maybe you don’t know where you’re spending your money, or rather, wasting it.
In this article, we’ll discuss some secret ways to start saving more money.
Table of Contents
Wait for a purchase
If you’re about to purchase something, but if you’re not sure you need it or not, wait for a week. Many times, we purchase things out of impulse and not because we need them. A week of “wait-it-out” period could be ideal in helping you decide whether you really need something or not.
During the week, ask yourself the following questions.
Do I really need this?
Will I be still using it a month later?
Also, don’t buy something for the sake of buying it. As per the famous saying, “You should buy something only if it gives you money, inspiration, or pleasure.” If your purchase doesn’t bring any of these elements, it’s better to skip.
Lastly, you can also calculate how many hours you would need to work to make back the money you spent on the purchase. For instance, if a purchase costs $100 and you make $10 per hour, you’ll need to work ten hours to make up the cost. Having this mentality can change your purchase decisions.
Only buy what you need
It might sound obvious, but most people don’t follow this rule. Fast food, branded products, coffee, and more – there are so many things you buy that you don’t actually need. Think of how you can avoid unnecessary expenses. That being said, don’t become so frugal that you eliminate fun from your life. Just make sure you’re not overspending on things you don’t need.
Don’t buy stuff just because it’s on sale
Don’t fall victim to sales. Many retail outlets out a large red board with a 50% off sign, and people go crazy and start buying stuff they’d never think of buying at full price. It’s a marketing gimmick – creating a sense of urgency – and most people fall for it.
So, don’t waste $50 on something you’ll never use just because its original price is $100. That’s a waste of money. If you’ve needed something for a long time and waited for it to go on sale, it can be worth it. Otherwise, avoid buying it.
Move to a smaller house
You should be spending no more than one-third of your income on rent. If you’re spending more, you need to move to a cheaper place. If you’re spending one-third, reducing it to one-fourth is even better. There’s no point in having a big house just for the sake of having it.
You won’t feel happier in a bigger house, and you’ll end up spending more on rent. Instead, move to a smaller house – you’ll be happier, and you’ll save more money. Besides, living in a small apartment can also help you save maintenance costs and utility bills.
However, there are some expenses that come with moving. These include:
Real estate agent
Time in looking for places
Time and efforts to sell some of your things (as you’re downsizing)
Keep all these factors in mind before you decide to move.
Cook your meals
If you eat out a lot, this one can be a big one for you. An average meal out in the US costs about $15, whereas a home-cooked meal costs around $9. So, if you go out for dinner every day, you’ll need to spend $5,475 per year. Contrarily, if you cook your meal at home, you’ll spend $3,285 per year. That’s $2,190 in savings! And an extra two grand in the bank account sounds pretty nice, doesn’t it?
We’ve talked about how you should avoid shopping for unnecessary items. But at some point, you’ll need to buy things in life, like groceries, clothes, household supplies, etc. But if you’re simply heading out and purchasing them, you might be losing money. The times have changed, and the internet has taken over. Now, you can buy almost everything online.
When it comes to daily items like groceries and household supplies, use apps like iBotta, Checkout 51, BeFrugal, Shopkick, and Drop. Some apps like Ebates and Groupon even pay you to shop. Staying updated with these trends can go a long way in helping you save money.
And if you’re not about mobile apps and the internet, you can still save money by doing some local research. Instead of blindly purchasing items from one store, try different outlets in your area. You might find a significant difference in prices between different stores.
Negotiate your bills
For how long have you been using the same internet or cable company? Are you their loyal customer? Now, how many times have you called them and tried to negotiate your bills? If you haven’t done it yet, you might be paying more than you should be. And if you’re not comfortable negotiating your bills, solutions like Trim can help.
Did someone say cash? What is it?
Yes, we live in a cashless era where credit and debit cards are the primary ways to make payments. It’s fine if you use a debit card or wallet, but if you’re using credit cards and not paying the debt off every month, the interest will begin to pile up. This is where cash comes into play.
Lock your credit card, and only use cash. Give yourself a weakly budget, say $50. When you see physical money leaving your hand, you’ll think twice about spending on something.
Start a budget
How will you save money if you don’t know where it’s going? A budget helps you keep track of your expenses and tells you where you spend your money, instead of wondering where it went. When you have a budget, you’ll identify where your money is going, and you can then cut down unnecessary expenses.
This way, you can save a few bucks every month and use them to pay off your debt, build an emergency fund, or to invest.
Starting a budget might sound boring, but it’s not about having fun. It’s about regulating how much you’re spending on having fun and is there any way you can reduce it.
The hidden costs of bad habits
Smoking, drinking, drugs, gambling, partying, are all a burden on your budget. These activities can hurt you not only physically but mentally, too. Let’s take a look at the hidden costs of these habits.
Smoking: $2,300 per year
Drinking: $7,800 per year
Partying: $7,500 per year
Most of the time, we overlook these expenses, but they turn out to be the major factors affecting our budget. So, if you want to spend more money, reducing your spending on smoking, drinking, and other activities can be helpful.
Save as much money as you can, but don’t be frugal and degrade the quality of your life. Money is meant to improve your life quality, but make sure you’re not spending it on things you don’t need. And once you start saving money, don’t let it sit in your bank account. Instead, invest your money and make it work for you as hard as you.