The AARP Magazine published a list of 99 ways to save money on everything each year. This is not the first list out there, nor will it be the last. Something stuck out when reading it. In order for a list like this to work, you have to tie your actions to something more meaningful than just saving money, in general.
So it is important to ask yourself the following questions:
- What are you saving for?
- What are we trying to change about your life?
- What is important to you – right now?
If you tie your expense cuts to a meaningful reason or specific outcome, the likelihood of success goes way up. Additionally, who can remember 50 ways? It is about focus. So limit this list to the five things you can do that will cut small expenses that are meaningful to you?
Once you get these five things down, they will become habits. Then you can add one or two things every so often until they become habits, as well. You end up saving more and more each year that way.
Let’s look at 5 Ways you can save:
1. Set Up a Direct Deposit into a Savings Account.
The easiest way to save for most is to never have money hit your account. It may be $20/week that goes into a separate account at a different bank than your checking account is at, into a 401(k) plan, or whatever. The best way to save is to never lay your hands on the money to begin with. This should always be in a plan to cut expenses. Following the example above, $20/week will save over $1,000/year.
2. Pack Your Lunch.
Bringing your lunch to work versus eating out can save a lot of money. It is amazing how inexpensive an apple and a bowl of soup are per day for lunch! After some simple calculations, this combination costs roughly $1.70/day versus a $5 lunch special somewhere. With this example, you will pocket $858/year from these savings and you will be much better off diet-wise.
3. Grocery Shop Online.
By grocery shopping online, you will typically only buy the things you know you want versus the various things that catch your eye while walking up and down the aisles looking for what is on your list. Additionally, you can pre-select items that are on sale or have additional perks. Many of these grocery stores will also allow you to pick the order up at the store without ever getting out of your car!
There are various studies educating grocers how to use product placement to increase what we spend at the store, but according to a Credit Donkey article, a multi-person household spends 53 hours a year grocery shopping and spending $6,136 per year. Assume you end up spending an extra 5% on groceries each time because of ‘extra’ things that catch your eye. This will save you $307/year, plus save you a ton of time, as well.
4. Pick the Right Bank.
Fees add up, especially for ATM withdrawals. Not only do you get charged by the bank whose ATM you use, but many times your own bank charges you for using another bank’s ATM. The same goes for checking account fees. With the advent of internet banking, mobile accounts, etc. shop around and find the banks that have the lowest fees like the example below:
“I have an account at a bank that has no ATM’s of its own, but refunds fees charges by other banks up to $3/each. They also charge no fees on my checking account as long as I have my statements delivered electronically and have a direct deposit to the account once a month.”
If you use another bank’s ATM once a week, and typically pay $6/month for a checking account, this will save you $384/year.
5. Get a Gas Card.
Gas is an expense almost every one of us deals with commuting back and forth to work. Several gas stations now have ‘membership’ cards that entitle you to a discount of about 7 cents per gallon. If you drive about 20,000 miles a year in a car that gets 20 miles per gallon. That will save you $70/year without changing much!
What happens with these five savings ideas? Well, you will be eating healthier for one, and not spending as much time at the grocery store. In reality you will hardly need to sacrifice anything. With the examples above you will save $2,619 in a year’s time!
Saving money doesn’t have to be hard. It can simply include some small adjustments that can add up over time. Get started today! Answer the questions above about your goals and make your list of five ways you can save!