No doubt about it – the single best way to save money is to find ways to spend less and save more. However, spending less doesn’t mean you have lived like a miser. All you have to do is to spend money smarter.
You also need to use the right tools to better manage your budget and to regain control of your personal finances. Where you store your savings is just as important as saving itself. Even though the best no fee savings accounts are great ways to save, their returns are quite limited. Investing on the other hand can offer great returns, depending on the risk you’re willing to accept.
Here is the top 10 best ways to save more by spending less.
1# Better manage your debts
Managing your debt well is essential to saving money – the sooner you start to pay down your debt and get on top of it, the sooner you can direct that money towards saving. The fees changed on debt normally outweigh the returns of on savings and investments. If you have debt, make a plan of what you owe – then work on paying them off as quickly as possible.
2# Review your lifestyle and needs
To spend less, you must first know how you’re spending your money. The most convenient way to spot which expenses are putting the biggest dent in your budget is to study where your money goes every month, either manually via Excel/Google Sheets, or using an app like Mint.
Ask yourself the right questions to find out what you really need and what expenses can be avoided. Reviewing your needs to adapt your lifestyle to your current means will definitely help you save more money.
3# Create a budget and stick to it
Once you know how your money is used each month, you will be able to create a budget. Remember to always consider your financial goals based on your personal and professional situation, as well as your age.
This way, you will be able to better anticipate your expenses and ensure you save money each month. The money you save can serve as a cushion for whenever you need to pay for unexpected expenses.
4# Make a shopping list (and stick to it)
Grocery shopping is always a major expense for households. Before you go shopping, make sure you have consumed as much as possible of what you have at home.
To be sure you are not tempted to buy everything and anything: make a list of what you really need and follow it. Eat before you go out shopping (this cuts down on impulse hunger shopping) and don’t bring your children!
5# Do not follow your impulses when it comes to shopping
Impulse purchases are often regretted, especially when you have a tight budget.
You probably have a good idea of which products tempt you the most. So, avoid any temptation, control yourself and simply avoid the stores that offer your favorite products. Another great way to avoid impulsive purchases is to use cash instead of a credit card.
6# Renegotiate your contracts
Taking the time to renegotiate your contracts (loan, insurance, bank, car, phone/internet plan, electricity/gas/water) could save you several hundred dollars a year.
Also, don’t forget to look for better offers as soon as your consumption habits change.
7# Reduce energy costs
The first thing you should do to reduce your energy costs is to analyze them in detail.
This way, you will be able to determine what your biggest spending areas are and how you will be able to change your consumption habits.
8# Rethink your holiday budget
To save on your travel budget, review the way you travel – there are so many ways to reduce your expenses, such as house-swapping, cat/dog-sitting or carpooling, etc.
In any case, being flexible on dates/destinations and going on vacation outside school holidays will also cut down on what you spend. You can also book your airline tickets or travel package well in advance (or, at the last minute) to take advantage of better prices.
9# Always negotiate the price
Dare to negotiate the price of the things you buy or the services you want to use – especially if they are quite expensive services, or objects in big stores.
You will be surprised at the reductions you could get just by asking (between 5% and 15% isn’t unusual).
10# Set up forced savings
What better way to avoid spending than to have your money automatically sent to your savings account or investing account.
Determine a percentage of your salary that you will dedicate to your savings. Then, adjust your lifestyle to fit the remainder of your income.