When I was 25 I didn’t have many money saving ideas. At that point, I was in graduate school and my best money saving idea was to not spend money at all. While that is a somewhat reasonable mentality for a 25-year old graduate student, it’s not really a practical philosophy for the long term.
Thankfully, over time I’ve learned some more detailed and creative ways to save money in my budget while still allowing myself to spend on the things that are necessary. Here are the top 5 ways I’ve learned to save money:
1. How to save money on food
You don’t have to be an extreme couponer to save money on food costs. In fact, you don’t technically have to use any coupons in order to be frugal in this area of your budget. What you do need to do, however, is buy only what you need and eliminate excess spending.
It’s surprising that many of us spend a lot of money we don’t need to when it comes to food. That’s fine if you have the budget for it and if that’s what you want to spend money on, but if you get to the end of the month and wonder where all your money went, or if you’re trying to pay off debt, then you need to cut out those excesses.
But how? First of all, no more restaurant meals. Or at least, keep them to one per month. Instead, do some meal planning before you go to the grocery store every week and decide what you need to buy in order to make dinners (and lunches) at home that week. Create a menu for the week and stick to your grocery list when you’re at the store so that you get the ingredients you need.
Also, give yourself some kind of reward for your “at-home” dinners – make it fun by eating by candlelight or give yourself a special dessert or listen to your favorite podcast. You can even invite friends over (and ask them to bring a dish) if you’re craving a more social dinner.
Here are some other great resources on how to reduce your food budget:
2. How to save money on entertainment
Another big part of your budget you can save money on is entertainment. The “normal” thing is to spend at least $50-$100 on cable TV and another $50-$100 (or more) on other types of entertainment, including Netflix, trips to the movie theatre, going out with friends, etc.
For those in a money-saving mindset, spending $200 per month on entertainment is not wise and not necessary! In order to reduce your budget, first you should strongly consider eliminating your cable TV subscription. These days, you can watch a lot of TV shows online for free on sites like Hulu. Or if you want a wider variety, you can keep your Netflix subscription – which is still much cheaper than having cable.
And start getting in the habit of finding fun things to do for free instead of paying top dollar for concert ticket, a visit to the movie theatre, or a night out at a bar. Trust me when I say this will make a huge difference in the long run!
Here are some blog posts to help you save money on entertainment:
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3. How to lower your interest rates
One of the most frustrating things you can spend money on is interest charges on debt. It’s never good when your money goes toward something that provides you no benefit – and that’s exactly what happens with interest charges. This is particularly true with credit card debt – some credit cards have over 20% interest rates! That means you could end up paying $200 in interest per year for every $1,000 of debt on the credit card.
So how to get a lower rate? The most straightforward way is to call your lender and ask them to lower your rate. You’d be surprised how often this actually works! Use the script provided in the link to talk through your request once you have a customer service rep on the phone.
If you aren’t able to lower your rate with your current lender, you might be able to find a lower rate with another lender. If so, you can do a balance transfer or a debt consolidation loan – just be sure you read the fine print to understand how much it will cost you.
Here are some great tips on lowering your interest rates:
4. How to reduce transportation costs
Everyone has transportation costs – they’re basically unavoidable. But regardless of whether you take the car, bike, subway, or bus to work each day, you can make sure you minimize the amount you spend each month.
The first question is how drastic you want to be. For many people the monthly car loan payment is a substantial part of their budget. If you are struggling to meet your obligations each month, then you might want to consider an option like downgrading your vehicle. If you’re not underwater on it, then you can probably sell it and buy a replacement that has a lower monthly payment or even buy with cash (if you have some money saved up).
For a less drastic approach, you can take steps to save money on transportation by (1) shopping around and negotiating for a lower car insurance premium, (2) minimizing your long-distance trips and combining shopping trips into one in order to save gas money, (3) consider using public transportation if available in your area – you can often buy a monthly or yearly pass that is considerably cheaper than the cost of driving, (4) compare prices when it’s time to get your car serviced. A lot of people take their car to the dealer for maintenance, but in many cases it’s cheaper to find a reliable local mechanic (you can use Yelp to find a good one).
Here are some more resources on saving money on transportation costs:
5. How to spend less on housing costs
There are certain bills that you pay every month regardless of whether you’re a renter or homeowner. Usually these include your electric bill, gas bill, and in some cases garbage bill. To save money on these utility bills, first look at ways to regulate the temperature in your apartment so you can use less energy on cooling it during the summer and heating it during the winter. A simple way to do this is invest in some “blackout” curtains that cover windows and can reduce energy costs by up to 25%.
Another part of housing costs is maintenance and repairs on the house. (This applies more to homeowners, although renters occasionally are expected to help with repairs too) If you need to save money, you can sometimes do house maintenance yourself, or barter your own services such as errand-running, bookkeeping, tutoring, writing, etc., in exchange for the repairs, or hire someone who is willing to use you as a laborer to cut costs. By working alongside them, you can significantly cut the cost of the repair.
The biggest part of most people’s budget is their rent or mortgage payment. While it may not be feasible for many people to move, that can be an impactful way to cut your monthly expenses. If you’re a renter, be sure to research comparable places in your area whenever your lease is up so that you don’t get locked into a higher rent than is fair. And for homeowners, evaluate your mortgage payment to make sure it is affordable and makes sense for your budget. It’s okay to sell your house if your living situation or income has changed since the time you bought it. Don’t feel like you have to stay there if it is going to cause you long-term financial problems.
Here are some more resources for saving money on housing costs:
Hopefully these tips help you with your money saving goals! Let us know if you have more tips in the comments and we’ll share them here. And if you’re working to get out of debt, you should try signing up for ReadyForZero (it’s free!) and reading our post on How to Get Out of Debt.