20 Simple Ways to Save Money

Table of Contents

“Don’t save what is left after spending; spend what is left after saving” is the advice given by the world’s most successful investor Warren Buffet. The importance of saving money cannot be overemphasized. Saving is an excellent habit that you must inculcate early on in life to ensure your financial security.

Saving and paying your debts depends mainly on a few criteria which are: If EMIs interest rates are low then save money first before paying EMIs. Secondly, if your rate of interest is high then pay your dues first and then save money. Thirdly, check your income and spending together by making a proper budget plan, then decide how much cash you have. Due to COVID-19, people don’t know what will happen in the future so decide accordingly.

Use this free savings calculator to estimate your investment growth over time. Calculate certificates of deposit growth or estimate how long it will take to save for a down payment on a house. With this growth calculator, you can set a goal and figure out how much you need to save each month to hit the mark.

If you’re interested in the idea of retiring early, our savings calculator can help you work out forecasts on how to achieve the goals you want to hit.

1. Create a Budget

Remember, the budget plays a very important role to deal with any financial process. Prepare your budget in such a manner where you can divide your savings and spending accordingly. Due to pandemic lot of people lost their jobs, there are salary cuts and businesses are shut. So, income has reduced suddenly. One should revise their budget and plan according to the needs. Check what is more important first; your savings or paying the debt. Reduce the limit of your budget by cutting down all useless expenses. Spend less and save more should be the mantra these days.

2. Track your Spending

We can fall into the trap of thinking spending on big things is what gets us into trouble, when often it’s the little things that end up costing us more. That’s why it’s important to keep track of your day-to-day spending, so you don’t live beyond your means. Your bank statement will tell you how much money is going into your bank account and how much is going out. You can then compare it with your budget to see whether you’re sticking to it or not. You can then identify areas where you can save. Just the thought of having to track our spending can ward off impulse purchases.

3. Save Automatically

If you have to manually transfer money into your accounts, you may be more likely to forgo saving altogether. Try having a portion of your salary automatically deposited to a savings account to keep you contributing consistently.

4. Avoid Debt

Pay off your cards every month to keep your debt from piling up. If possible, avoid going into debt in the first place by spending within your limits and keeping your credit card at home. With a savings built up, you won’t have to put unexpected expenses on a card.

5. Invest in Quality

Think about spending a bit more money on things that will last you longer. For example, it can be worth it to buy some higher quality clothes (as long as they’re not for growing kids), because you won’t have to buy new ones for a long time.

6. Find a better Bank 

Ideally, your bank should have no-fee checking, a wide ATM network and good online banking services. If your bank regularly hits you with account maintenance fees or ATM fees, look for another bank. Here are some great full service banks that offer these features and some great online-only banks that excel at online banking in particular.

7. Consolidate Debt

Talk to a financial advisor about your options regarding your debt. You may find that consolidating multiple high-interest payments into one lower interest payment is an effective debt management strategy.

8. Cancel Unnecessary Subscriptions and Memberships

Don’t worry, we are not asking you to cancel your Netflix subscription. But you surely can cancel your gym membership as you can’t really use it during the corona virus lockdown. Similarly, you can find out other such memberships and subscriptions which are either not feasible or can be avoided during the lockdown.  

9. Set Savings Goals

One of the best ways to save money is by visualizing what you are saving for. If you need motivation, set saving targets along with a timeline to make it easier to save. Want to buy a house in three years with a 20 percent down payment? Now you have a target and know what you will need to save each month to achieve your goal. 

10. Ideal distribution of Income

Ask the human resources department at the organization you work at to divide each of salary amount between your checking and savings accounts. If you keep a definite percentage to routinely deposit into your savings so you are not likely to touch that while out shopping or pubs. Another perk here is that interest rates are normally more for savings accounts than they are for others.

11. Record your Expenses

The first step to start saving money is to figure out how much you spend. Keep track of all your expenses that mean every coffee, household item and cash tip. Once you have your data, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. Use your credit card and bank statements to make sure you’re accurate and don’t forget any.

12. Take Public Transportation

Try replacing your drive to work one day a week. This can save you both money and time because you can get other things done on the bus while saving money on gas and wear and tear on your car.

13. Monetize Your Passion

Make your free time earn you money as well. If there’s a hobby or skill you do for fun, consider selling the fruits of your labor. If you love photography, try selling photos on stock websites, or if you find yourself writing at the end of the day, try starting a blog.

14. Replenish Savings

Throughout all this, remember that whenever you need do dip into your liquid savings account, replenishing it becomes your new primary goal. Rebuilding those emergency funds will be critical for a future, unexpected expense. To do this, you may need to pause your other goals for a short time.

15. Plan Cash Withdrawals

If you end up using ATMs more often, plan each visit sensibly to evade usage fees. The first few times, you are allowed free transactions, after which it will be charged INR 20 per transaction and INR 10 per enquiry. Stick to your own bank’s ATM as much as you can. When it is time to take out cash, see if you can swipe your card.

16. Utilize Your Savings Account

Your current bank may offer a savings account with interest that can make your deposits easy to make and retrieve. Some even offer the ability to divide up the money in your savings account by what it’s for. Help motivate yourself to save by watching you the funds for your specific goals grow.

17. Long-Term Savings

Once you have paid off the high-interest debt, start on your savings for any bigger goals you have. These could include a new car, home, college savings, or other larger expense.

18 Decide on your priorities

After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. Be sure to remember long-term goals it’s important that planning for retirement doesn’t take a back seat to shorter-term needs.

19. Use a Savings Calculator

Putting money away consistently is hard enough as it is, so utilize an easy online tool that can calculate interest over years and help you determine how much your savings may grow in the years to come.

20. Build up your Emergency Savings

 You’ll need to continue paying current bills but aim to have $1000-$2000 in your emergency savings account before tackling longer-term goal savings or paying off debt that you may have. Not only will that money provide peace of mind and increased psychological well-being, but it will be critical for the unexpected expenses that will inevitably come. It is important to avoid additional borrowing as you’re paying down other debt and having that cushion will help to do so.