Set clear financial goals with specific deadlines to make saving easier.
One of the best ways to save consistently is by setting up automatic transfers to your savings account, so you can build your savings without added effort.
Cash-back apps can help reduce your spending by giving you cash back or rewards on regular purchases like groceries, gas, dining, and online shopping.
Reducing utility costs, shopping around for insurance, and choosing generic brands can save you hundreds each year.
Using high-yield savings accounts and taking advantage of employer-matching retirement contributions can help your savings grow over time.
Saving money can feel hard, especially if your income only just covers your expenses. According to a survey by Bankrate, over one-third of workers (34%) live paycheck to paycheck, with little or nothing left for savings after paying monthly bills.
Having little or no savings can create stress in emergencies, lead to credit card debt for unplanned expenses, and make it hard to reach long-term goals like buying a home or retiring. Most financial experts recommend having at least three months’ worth of expenses in savings to manage unexpected events, like a job loss or major medical bills.
Building up this amount can be challenging, but it’s possible. Here are 14 effective ways to start saving money and increase your financial stability.
1. Review Your Spending
To start saving, begin by understanding where your money goes. Many bank statements come with categorized spending reports that show where you spend the most, helping you find areas to cut back. If you live with a partner, reviewing your expenses together can help both of you save.
2. Automate Your Savings
Automating transfers from your checking to your savings account every payday is an easy way to grow your savings. Budgeting helps you allocate money for savings while covering all your expenses. Budgeting apps can help track spending, give alerts, and set up automatic savings.
According to Melissa Almuttar, MBA, at H&R Block, starting with tracking your current income and expenses is key. Separating “wants” from “needs” gives a clear picture of where adjustments are possible. Budgeting strategies like the 50/30/20 rule (needs/wants/savings) or paying yourself first can help you prioritize savings and keep on track.
3. Use Cash-Back Apps
Cash-back apps like Rakuten, Ibotta, Upside, and Dosh let you earn rewards on everyday purchases, including online shopping, groceries, travel, dining, and gas. These apps give you a percentage of cash back, typically ranging from 1% to 10%.
Different apps offer various ways to earn rewards, such as shopping on specific sites, uploading receipts, or scanning barcodes. Once you reach a minimum amount, you can cash out through PayPal, gift cards, or direct deposit.
4. Reevaluate Your Mobile Plan
If it’s been a while since you reviewed your cell phone plan, now might be a good time. Companies like Mint Mobile, Ting, and Visible often offer competitive plans at lower prices than major carriers. Compare options to find the best deal. If you spend a lot of time on Wi-Fi, you might not need a large data plan.
5. Turn Off Spending Alerts
Your smartphone can help you save money, but it can also encourage spending with notifications for sales and promotions. Consider unsubscribing from promotional emails and turning off notifications to avoid unnecessary purchases.
6. Reduce Utility Bills
Simple changes can help lower your utility bills. For instance, switching to LED lights can save the average household around $225 per year, according to the U.S. Department of Energy. Sealing leaks around doors and windows, installing smart thermostats, and using low-flow showerheads can all help cut costs. You may also qualify for assistance through the Low Income Home Energy Assistance Program (LIHEAP).
7. Review Your Entertainment Costs
Rather than paying for a large cable package, consider switching to a more affordable streaming service, like Sling, Hulu, or Fubo. Amazon Prime offers a range of shows and movies and includes access to millions of songs, potentially saving you the cost of a separate music service.
8. Look for Free Local Events
Many museums, galleries, and other cultural sites offer free admission on certain days. Libraries might offer free passes to local attractions. Some banks, like Bank of America, provide free museum access to their customers through programs like Museums on Us.
9. Be Smart About Grocery Shopping
With food costs high, planning your grocery list carefully can reduce waste. Feeding America reports that U.S. households waste about $473 billion in food yearly. Planning meals and making a shopping list can help minimize waste and save money.
10. Choose Generic Brands
Generic brands for items like cereal, noodles, and spices are often as nutritious and high-quality as their branded counterparts but cost less. This also applies to non-food items, such as paper products and cleaning supplies. You can always switch back if a generic option doesn’t meet your standards.
11. Consider Other Banking Options
If you’re paying monthly fees for your checking or savings account, switching to an online bank could save you money. Many online banks, like Ally and Discover, have no monthly fees and offer high interest rates on savings accounts.
12. Compare Car Insurance
Safe drivers can often lower their car insurance premiums by shopping around for a new provider. Usage-based insurance, which charges based on how much you drive, might also reduce costs if you don’t drive often.
13. Use Coupons and Promo Codes
Using coupons, even online, can help save money. Extensions like PayPal Honey, Coupert, and Capital One Shopping automatically find coupons for you, saving time and money on your purchases.
14. Try a Spending Freeze
For a set time, commit to not spending on non-essential items. A spending freeze can help you see where your money is going and give you extra cash to put toward savings or paying off debt.
Next Steps
If you’re determined to reach your financial goals, these 14 tips are a good foundation for building savings. Now that you have the basics down, consider expanding your financial knowledge to strengthen your financial future.
