How To Save Money: 18 Proven Ways
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We compiled several ways to save money, from adjusting daily habits, to cutting monthly bills, to making long-term changes.
18 ways to save money
1. Use an automated tool
Find an app or bank account that takes the work out of saving. Digit and Qapital both automatically transfer small amounts from your checking account to a separate savings account. Learn about apps that automate savings for you.
2. Count your coins and bills
Empty your pockets each day and start collecting that extra change. Then take your collection to the bank and put it directly into your savings account instead of your checking account. When you want to watch your spending, use dollar bills instead of credit cards. It’s harder to part with cold, hard cash.
3. Prep for grocery shopping
A little work before you go to the grocery store can go a long way to help you save money on groceries. Check your pantry and make a grocery list to avoid impulse buying something you don't need. Learn how to get coupons, and join loyalty programs to maximize your savings as you shop.
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4. Order smaller servings at restaurants
Opt for appetizers or split an entree with your dining companion to save money when you eat out.
5. Get discounts on entertainment
Take advantage of free days at museums and national parks to save on entertainment costs. You can also ask about discounts for seniors, students, military members and more.
6. Map out major purchases
Time your purchase of appliances, furniture, cars, electronics and more according to annual sale periods. Don’t buy anything hastily, either. Always wait a day or two before buying to limit buyer’s remorse.
7. Restrict online shopping
Make it more difficult to shop online in order to stop spending money on things you may not need. Instead of saving your billing information, force yourself to input your shipping address and credit card number each time you order. You’ll probably make fewer impulse purchases.
Before you build a budget
NerdWallet breaks down your spending and shows you ways to save.
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8. Make your own gifts
Go the DIY route or save money with affordable gift ideas, like herb gardens and gift baskets.
9. Reduce your gas usage
You can't control prices at the pump, but you can do several things to cut your gas use and save money. Try a gas app to pinch pennies when you do fill up.
10. Lower your car payment
Refinancing your auto loan and taking advantage of lower interest rates could save you considerably over the life of your loan.
11. Bundle cable and internet
You could lower your cable bill by as much as $40 per month by changing your cable package. And you could save more than $1,000 over two years by bundling your cable and internet service, depending on your carrier.
12. Switch your cell phone plan
Changing your plan is one way to save money on your cell phone bill, but it’s not the only way. Removing insurance from your plan could save you nearly $100 per year, per line.
13. Monitor your electric bill
Big and small changes in your energy usage can help you save hundreds annually on your electric bill.
14. Lower your student loan payments
Income-driven repayment plans can lower your monthly student loan payments by several hundred dollars each month.
15. Cancel unnecessary subscriptions
Uncheck the auto-renew option on any subscriptions you aren’t using regularly, such as subscription boxes or streaming services.
16. Track spending
Keep track of your monthly cash flow — your income minus your expenditures. This will also make it easier to mark progress toward your saving goal. Try a budget app that tracks your spending. (NerdWallet has a free app that does just that.) Or you can follow these five steps to help you track your monthly expenses.
17. Refinance your mortgage
Refinancing your mortgage to snag a lower interest rate can save you several hundred dollars each month. Use our mortgage refinance calculator to find out how much you could save.
18. Set savings goals
Set a specific but realistic goal. It may be “save $5,000 in an individual retirement account this year” or “pay off my credit card debt faster.” Use a savings goal calculator to see how much you’d have to save each month or year to reach your goal.
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How to save money with a budget
One smart way to manage your money — and hopefully hold on to more of it — is to follow a budget.
At NerdWallet, we think about a budget as a spending plan because saving money doesn’t mean you have to quit spending altogether. It just means you have to prioritize some financial goals over others.
We recommend the 50/30/20 budget for smart money management. Devote 50% of your income to necessities, 30% to wants and 20% to savings. If you find one of your allocations exceeds these percentages, make some adjustments to fit the formula.
As you work toward your ultimate financial goal, make sure to put your newfound funds in a good high-yield savings account to maximize your money. Some of the best online accounts pay interest rates that are much higher than large traditional banks.
Track spending by category, compare months and spot ways to save.