You know the drill – the holidays are over, and it’s time to get serious about your finances. All the gifts and parties probably dented your savings, but that doesn’t mean you can’t reach your financial goals this year. The new year offers a fresh beginning and new motivation to be smarter with your spending. Don’t worry; you don’t have to make drastic lifestyle changes to save money. With a few simple tweaks to your spending habits, you’ll have more cash in your wallet and accounts.
Proven Ways to Save Money in the New Year (or Anytime)
Making resolutions you can keep will set you up for financial success. Read on to learn easy and realistic strategies to save money without depriving yourself. Little changes add up, and soon, you’ll hit those savings targets.
1. Easy Budgeting Tips to Save More
Here are some tips to help you save money with minimal effort (and pain):
- Set up automatic transfers to your savings account. Even small amounts like $15 or $25 per paycheck will add up over time.
- Use cash back rewards from credit cards to directly deposit into savings rather than spending the rewards.
- When you get a raise or bonus at work, increase your automatic savings transfer by the same amount. Pay yourself first before lifestyle inflation kicks in.
- Review monthly expenses to identify any subscriptions, memberships, or other recurring costs you can cancel to free up funds. Every little bit counts.
- Try the 52-week savings challenge. Start by saving $1 the first week and increase the amount by $1 each week. You’ll save over $1,300 in a year!
- Use windfalls like tax refunds, gift money, or reimbursements to bulk up your savings instead of spending it.
- Set a monthly or annual savings goal to stay motivated. Seeing your savings grow can be one of the most rewarding feelings.
Making small changes to your spending habits can also lead to big savings over time. Here are some easy ways to trim the fat from your monthly budget:
- Cut the cord on cable TV and switch to a streaming service. Going with a basic Netflix or Hulu plan can save you between $55 and $250 a month.
- Make coffee and breakfast at home instead of stopping at a cafe every morning. Those $5 lattes and $10 avocado toasts add up fast.
- Pack your lunch. Nearly half of Americans (42%) spend $11 to $20 per person per meal, and 24% spend between $21 and $30. Bring sandwiches, a salad, or last night’s leftovers instead of spending hundreds of dollars per person dining out.
- Look for more affordable cell phone plans, shop around for cheaper car insurance, and call service providers to negotiate lower rates. Small reductions across bills can equal hundreds or even thousands in annual savings.
- Take quicker showers, fix that leaking sink, wash your clothes in cold water, and switch the lights off before leaving a room. These changes may seem small, but they effectively reduce household bills.
- Don’t be ashamed to use coupons or buy generic brands. Meal planning and creating a list also helps reduce impulse purchases and food waste.
- Stay away from “that one store.” Many of us have a go-to store – the one that tempts us to spend so much money on stuff we don’t need. Unless you’re purchasing necessities like groceries, don’t even think about it!
With a little effort, you can trim your recurring expenses without drastically altering your lifestyle. You can put the money you save toward other goals, such as debt repayment, retirement, or fun experiences. Give it a try!
Further reading: Nine Effective Ways to Get Out of Debt Within a Year and The Success Behind Debt Snowballing
2. Smart Investment Strategies to Grow Your Savings
Explore these clever investment and money-saving tactics:
- Invest in a Roth IRA. This retirement account lets your money grow tax-free. The earlier you start, the more time your investments have to compound. Even small automatic contributions accumulate over time.
- Utilize your employer’s 401(k) match if offered. For every dollar you save in your 401(k), your employer will wholly or partially match your contribution.,
- Consider index funds. These investments track entire stock markets and have lower fees than actively managed funds. Great for hands-off investors.
- Look into a health savings account. HSAs have triple tax advantages and the money rolls over year to year. Use it for medical expenses now or down the road.
- Diversify your portfolio. As the saying goes, don’t put all your eggs in one basket. Spread your investments across different assets like stocks, bonds, and real estate.
- Invest in yourself through education and training. Building in-demand skills can unlock higher earning potential.
- Automate savings and investments. Set up automatic transfers from checking to investment accounts. Money you don’t see is money you won’t miss or spend.
3. Selling What You No Longer Use or Need
Letting go of unused possessions takes a weight off your shoulders while earning extra cash. It’s a double win!
- Take an inventory of your closet, jewelry, shoes, handbags, accessories, and home decor. Be ruthless and make a pile to sell.
- Biltmore Loan and Jewelry makes it easy to sell designer items, jewelry, collectibles, and more for competitive prices based on market trends and industry insights. Find out what we buy and get a free appraisal.
- eBay and local Facebook groups are also great for unloading random stuff that’s collecting dust around your house.
- Have a yard sale or use an app like OfferUp to sell locally. Meeting up to hand off items is fast and you get cash right away.
Use the proceeds to pad your savings and investment accounts, helping you build good financial habits that will serve you well for years to come.
The Bottom Line on How to Save Money: It Starts With You
You don’t have to take dramatic steps or totally overhaul your lifestyle to save more money. With a few easy modifications and smart strategies, you can spend less and set aside more cash for your future. Stick with the above money-saving habits and watch your account balances grow.