10 Ways to Save More Money Each Month

You’ve probably heard someone tell you already that you need to be saying more money if you want to make a big purchase (like a down payment on a house) or be able to retire someday. But between all the bills and expenses, that’s easier said than done.

Fortunately, living paycheck to paycheck does not something that you have to deal with forever. There are ways you can break the cycle and put plenty of buffer between you and financial ruin. In this post, we’ll go through ten tips for how to save more money each month.

1. Try Using Cash for Everything

There’s something painful about paying for things with cash instead of using a credit card. And for anyone who’s trying to cut down their spending, that’s a good thing!

This is something that happens because humans are psychologically wired to be loss adverse. When we swipe plastic, it’s not the same feeling of separation that we experience as parting with physical cash. Put this trick to use by making purchases using cash only over the next 30 days.

2. Plan Your Purchases in Advance

There’s an old saying that says “when you fail to plan, you plan to fail”. Nothing could be more true, especially when it comes to the way you spend your money.

A budget is a plan for how you’ll use your money this year. You should already have a pretty good idea of what you need or want to buy this year. So why not lay it all out and make sure you can actually afford it all?

Once you get started, it’s easy to stay on top of your purchases by using a budgeting app like Buxfer. Buxfer automatically connects to your bank and credit card accounts to sync all transactions. This is an awesome way to ensure you’re always on track and make any adjustments right away if needed.

3. Refinance Your Loans

When was the last time you refinanced your mortgage, auto loan, or student loans? If it’s been more than a couple of years, then you may want to start shopping around.

Renegotiating the terms of loans can put more money back in your pocket. For example, let’s assume you’ve got a 30-year fixed-rate mortgage of $250,000. At 3.5 percent, your payment would be $1,123. But if the going rate is now 3.0 percent, then your payment will drop to $1,054. That’s $69 you can add back into your monthly cash flow.  

4. Use a Flexible Spending Account (FSA)

Do you have medical bills or daycare payments that you make regularly? Did you know that you have the opportunity to pay for them using tax-free money?

An FSA or “flexible spending account” is a special type of plan that employees can use to defer a portion of their paycheck tax-free. Users can later reimburse themselves after qualifying purchases are made. 

As of 2022, savers can elect up to $2,850 for health expenses and $5,000 for dependent care expenses. If you’re interested in starting an FSA, check with your employer (or your spouse’s employer) to see if they offer one.

5. Make a Grocery Shopping List 

Food is expensive! And part of why we tend to spend so much at the grocery store is because we buy way more than we think we need. According to MarketWatch, Americans throw out $1,500 in wasted food each year.

A great way to save some money and buy just what you need is to plan your meals ahead of time. Make a list and itemize everything you’ll need for the week. Then when you go shopping, stick to those things and those things only.

For even more savings, try visiting discount grocery stores like ALDI and Save-A-Lot. Even if you buy a fraction of your goods from one of these places, it could save you hundreds per month.

6. Get the Sandwich Instead of an Entrée 

Speaking of food, eating out at restaurants is a great way to try new dishes that you wouldn’t normally make at home as well as spend some time with family and friends. But at nearly $20 per plate plus drinks and a tip, the bill can add up fast.

A clever way to save more money every time you eat out is to opt for a lighter portion. Choosing a sandwich or salad over one of the main entrees will often cut your costs in half. In addition, there are added health benefits since the smaller portion size will usually have about half the calories and fat as an entrée (especially if you skip the French fries).

7. Pay Attention to Your Utility Usage

Your house may require a lot of heat, energy, and water. But there are ways to cut the usage of these utilities down so that you’ll pay less.

  • Use a programable thermostat to use less heating and cooling when you’re not home. Experts estimate this can reduce your energy bill by 12 percent.
  • Wash your clothes in cold water. Hot water not only costs more but also makes detergents less effective as well as causes your clothes to shrink and fade.
  • If you’ve got cold spots in the house, consider adding more insulation to the attic or weather stripping to the doors and windows. This will help to keep more heat inside and require less usage of your furnace.

8. Cancel Unused Subscriptions

Realistically … how often do you watch Netflix, Hulu, HBO Max, or any other streaming video service? Do you have premium accounts with Spotify, Pandora, or Apple Music? When was the last time you went to the gym?

Most services are now subscription-based plans which can seem cheap and convenient at first but can really add up quickly if you have too many of them. Be honest with yourself and cut out the ones that you don’t actually use anymore.

9. Eliminate Your Debt

You’d definitely have more money to save each month if you didn’t have debt payments. But with outstanding balances in the thousands, these aren’t likely to go away very easily.

Two effective ways to eliminate your debt are the debt snowball and debt avalanche methods. Each one involves systematically focusing on one debt at a time and putting as much extra money as you can find towards it. Once gone, you then focus on a different debt and redirect those same funds towards getting rid of that one. One by one, you’ll eliminate them all and move towards becoming debt-free.

10. Use a Retirement Plan

One of the easiest ways to stretch the dollars you’re saving is to elect to have them automatically put into a tax-advantaged retirement plan like a 401k or IRA. These types of plans allow you to deduct your contributions to your taxable income for the year, which then reduces the tax bill. In other words, for every dollar you save you’re also saving on the taxes that you would have had to pay.

But the benefits don’t stop there. With 401k plans, employers will often match your contributions sometimes as high as dollar for dollar. Additionally, your contributions get invested in funds that have the potential to compound and grow over time. It’s one of the easiest ways to turn your savings into a nest egg that could be worth millions of dollars in the future.

Featured image: Pexels

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