Did you know that the average American household has over $145,000 of debt? That includes credit cards, medical bills, student loans, mortgages, and more. For most people, looking at the number and wondering how you’re going to climb out of it can be overwhelming, and even frightening.
Even if you don’t have any debt (consider yourself lucky!), there is likely no one in this country, or in the world who doesn’t understand the value of saving money.
One of the biggest mistakes most people make, however, is trying to save too much too quickly. While it’s important to have goals, you need to be able to separate short-term and long-term goals.
Saving for something very specific, like a trip or a new car, is a short-term goal. It’s a relatively easy goal to accomplish, too. You simply have to make a few changes for several weeks or months, and you’ll reach that goal.
Unfortunately, those goals don’t often lead to permanent changes in your saving habits. So, while they aren’t necessarily bad, it’s also a good idea to have a few long-term financial goals in place, too. Simply saving for your future can cause you to develop better habits with your finances, so you can save money bit by bit over time.
Not sure how to get started or what “little” things can help? Let’s cover ten clever ways you can save money to enjoy later.
Create a Budget
The first place to start when you’re trying to save money is to create a budget. Look at your spending habits and consider some of the biggest costs that might need to go. Where is your money going each month? Can you live without anything? Should you be shifting money around to pay off debts so you’ll have more money to move around later?
Creating a budget makes everything so much clearer, and it allows you to layout a long-term game plan and financial strategy.
Save Money Automatically
Did you know that in many cases, you can transfer a small portion of your paycheck into a savings account each time you get paid? Talk to your bank and your employer about it. Or, if you’re self-employed, commit to setting aside a percentage of what you make each week to put into a separate account.
The good news? It really doesn’t need to be much at all. You might be surprised at how quickly a small chunk of what you make each week starts adding up over the years.
Pay Off Debt Now
The reality is, you’re never going to be able to save as much as you want on a long-term basis with debt looming over your head. While things like auto loans and mortgages are different, it’s important to pay off credit card debt as soon as possible. Take a look at your budget again and decide on a few things you can cut. You can put that money directly toward your debt, and pay it off sooner.
Once you’re able to do that, you will feel more confident about long-term savings, plus you won’t be so stressed out over your debt and what might happen because of it.
Break Down Your Goals
Thinking about saving a large sum of money over many years is a hard concept for some people to fully grasp. That’s especially true because we live in a society that has grown used to instant gratification.
So, to help yourself stay motivated with your saving, create smaller goals, and milestones. They could be weekly, monthly, or even yearly. Seeing tangible results on a regular basis can help you to see that your plan for saving is working. It could even inspire you to find new ways to save more throughout the years, so you end up with an even larger “nest egg”.
Do the Math
Another way to stay motivated with your saving is to do a little bit of math. When you choose a savings account that builds interest, any money you put into it will grow over time. Something like an interest rate calculator can help you to see how much you’ll make from interest depending on the rate, and how much money you have in the account at any different time.
Play around with some of the numbers to determine how much you want to put in that account, and how much you want to see it grow. That will help you to decide which accounts will most benefit you over a period of time, and which ones might be better to avoid.
Wait 30 Days Before Making a Big Purchase
It’s easy to start falling into spending habits, even if you’ve been saving diligently for a while. Maybe you’ve had your eye on a new car for a while, or another large purchase that may not be a necessity, but feels like something you really want.
Instead of buying it on the spot or trying to ignore it, give yourself 30 days. Consider the pros and cons of the item, how much it costs, where you are financially, and if it’s really something you need. That amount of time can give you a clear picture of whether you should make the purchase. Sometimes you will, sometimes you won’t. But, giving yourself time to think about it and research is a smart financial move.
Lower Your Utility Bills
Don’t let anyone ever tell you that small changes can’t make a big difference. You can lower your utility bills by quite a bit each month and put those savings in a special account by just making a few adjustments and upgrades to your home. Some quick tips to keep in mind that can lower your utility costs include:
- Taking shorter showers
- Only run full loads of laundry/dishes
- Sealing your doors and windows
- Unplugging appliances when not in use
If you start practicing all of these (and more), you’ll start to notice your bills going down right away, so you can save more each month without having to sacrifice much at all. If you have a family, turn it into a game to see who can find the most ways around the house to lower energy use and/or water use. A little competition can go a long way, and your wallet will benefit from it!
Be a Grocery Guru
If you have a family, chances are you’re overspending each week on groceries. Even if you’re single or a couple, you still might be spending more than you have to.
One way to combat that is to have a strategy in place before each grocery tip. Create a list of everything you need, and once you’re at the store, don’t stray from it. Additionally, make sure to eat something – even just a snack – before you go shopping. Some studies have suggested that grocery shopping on an empty stomach may make you more impulsive when it comes to buying things you don’t need.
Buy Used Items
One of the best ways to save money is to change your spending habits. That may include not buying everything brand new.
Gently-used items from thrift stores or places like Goodwill or the Salvation Army are often in great shape. You can also find items from garage sales or online sites that look barely used, and they are a fraction of the cost as a new product.
It can take a little digging to find great used items, but if you know what you’re looking for and you’re willing to browse, you can often find incredibly great deals on perfect products, so you can use the money you saved to put away.
Create Extra Income
Nowadays, the idea of having a “side hustle” is the norm for thousands of people. Technology has made it easier than ever to have a small business or work in the gig economy for a bit of extra money. You don’t need to give up your day job to do it, and you can often work when you want to, picking up side jobs as needed.
Most side hustles are based on skills or talents you already have. If you’re a great writer, consider copywriting for businesses or other blogs. Do you have graphic design skills? Create website designs or commission pieces. Whatever you’re already good at can undoubtedly make you some extra money when you market yourself the right way.
Thinking about saving money for years doesn’t have to be overwhelming or daunting. By educating yourself, making a few subtle changes, and perhaps even adding a bit extra to your income, you will quickly see how easy it is to become a long-term spender.
Putting these ideas into practice now will allow you to reap the rewards later. Whether that means you have a nice college fund set up for your child or a comfortable retirement fund for you, you can take pride in knowing you saved the right way, without having to sacrifice too much at any given time.