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Effective Money-Saving Strategies
Admit it. Saving money is easier said than done! Most find it difficult to save. Why is that?
When you are struggling financially, you might promise yourself that you'll save more money only if you made more of it.
Then, you find additional work, and what happens? You spend your new income. Sound familiar?
When you picture yourself being frugal, is the image bleak? It shouldn't be. By making a few small changes, like switching from a name brand to a generic brand, you can save a lot of money.
Related: 5 Financial Planning Mistakes That Cost You Big-Time (and what to do instead!) Explained in 5 Free Video Lessons
Use the Money Saving Calculator to find out how much money you're missing out on by not taking the following frugal steps.
Simple Ways To Save Money
Saving money isn't complicated, but it will take intentional effort. Here are some ways you can save money:
- Pay off your debts – The more debt you pay off, the less interest you'll be paying, and the more you can save.
- Stop using your credit card – Some people purposely leave their credit card at home when they go to the mall. If you want to use your credit card when shopping, just make sure that you pay the total amount in full when it is due. This way, you can save money on interest.
- Pay all your bills on or before the due date – You can avoid penalties and other fees when you pay your bills on time. Set up an automatic debit to pay your bills so you won’t forget.
- Replace expensive brands with generic brands that have the same quality – Take the time to read and compare product descriptions before buying. For example, there are many name-brand medications that can be replaced with lower-cost generics that have the same ingredients.
- Don’t buy just because the item is on sale – Don't buy items just because you'll get a deal. Remember that no matter how small the value, these temptations can blow your budget.
- Negotiate prices where possible – Negotiating a deal on items you're already intending to buy isn't a bad idea. Make sure you understand the appropriateness of negotiation in any given situation before you do so.
- Make a shopping list – When you go out for groceries, make sure that you list all the items you need for the week. That way, you won't have to make extra trips and pay more for transportation.
- Avoid incurring small fees – ATM fees, parking fees, payments for plastic shopping bags, overdraft fees – they all add up.
- Reduce the habit of eating out – Try to cook your own meals and pack your lunch for the office. Try to limit yourself from eating at restaurants to once a week.
- Reduce your mobile phone expenses – If you have a postpaid mobile phone subscription and you’re not able to fully utilize the plan or if you have difficulty controlling your mobile expenses, it might be more practical to switch to a lower cost, prepaid plan.
- Cancel subscriptions that are unnecessary – It may be your magazine subscription that you don’t read at all or your mobile data subscription if you have Wi-Fi at home. You can also switch to watching video on-demand online instead of having a cable TV subscription.
- Buy or rent DVD movies instead of watching movies in theaters – Not only will you save money, but watching a movie at home allows more time for family bonding and the show can start at your convenience.
In order to save more money, you're going to need to change your mindset. It's not enough to know you need to make some changes, you're going to need to see the benefits of doing so. This saving money calculator can help you see those benefits.
As you continue to save money, you may need to treat yourself every now and then. But when you do this, remind yourself about your goals so you won’t overindulge. This is all about behavior modification – master your spending and it'll pay off in the end.
Money Saving Calculator Terms & Definitions
- Saving – The term used for setting aside a certain amount of money for future use.
- Expected Lifespan – The number of years you expect to live from birth to death.
- Price – The amount of money paid for an item or service.
- Return on Investment (ROI) – The annual percentage rate of return you can expect if you were to invest money.
- Expected Retirement Age – The age at which you anticipate leaving your job or ceasing work.
- Withdraw – The process of taking out money from your investment account.
- Name-Brand Product – A product with an easily recognizable brand that usually has a higher price than its generic equivalent.
- Functional Equivalent (Generic) Product – A product lacking a heavily advertised brand name, normally including a brand associated with the store from which it is bought. Generics typically have a lower price than their name-brand equivalents.
Related Savings Calculators:
- Savings Goal Calculator: How much should I save each month to reach my savings goal by a given date?
- Savings Account Calculator: How long until I reach my savings goal given the amount I'm currently saving each month?
- Compound Interest Calculator – Monthly: What will my monthly savings deposits grow to when compounded monthly?
- Compound Interest Calculator – Daily To Yearly: What will my savings grow to when varying the deposit intervals and the compound intervals from daily to yearly (and everything in between)?
- Future Value Calculator: What will be the future value of my savings growth after adjusting for taxes and inflation?
- Inflation Calculator: How has inflation effected the purchasing power of my savings from one year compared to any other year in history?
- Interest Calculator – Simple Monthly Payment vs. Compound Growth: How much will my savings earn if I spend the interest every month vs. compound it for growth?
- Latte Factor Calculator: How much do small, regular expenses (like a daily latte) really cost me in terms of savings?
- Spending Calculator – True Cost To Own: How much does that one-time expense truly cost me over many years?
- Millionaire Calculator: How long until I grow my savings to a million dollars and what will it be worth after adjusting for inflation?
- Present Value of Annuity Calculator: What is the present value of a series of equal cash flows to be received in the future?