It's just about getting the most value out of your money!
Welcome to our section of Savings Ideas. Unfortuately the word savings has a negative ring to it for most people. I don't want that to be the case for you. I want you to have positive associations with savings. It doesn't necessarily have to mean that you are missing out on anything, so no need for FOMO (Fear of missing out)!
I want it to mean that you are in control and that you know what is truly important to you and you are just making sure you get the most out of your money!
A bit further down, we have listed some of the things you can do to make sure you get more value out of your money, keeping more money in your pocket! Just scroll through the list and take in what you could potentially keep in your pocket every year if you just adopted a few of these savings ideas.
It's all about mindset!
If you experience a “bad” feeling as soon as someone talks about savings, I want to you start working on changing that feeling. Every time you get that feeling, I want you to stop that thought and say to yourself:
“I just want to get the most out of my money, is this the way to do that?”
By learning to get the most out of your money, you will be able to do so much more and you won’t have to be afraid of missing out as you will always have money at your disposal. Saving money doesn't have to mean being cheap or stingy (although you can go there if you want to), it is only about you making sure you get the most out of your money. You earned it so why not make the most of it?!
Some things you might want to eliminate or reduce, just to make sure you have money for other more important things or experiences. Although it can also be about acting smarter with your money and still get the same things or experiences but for less money! This is what our savings ideas below are about.
The choices that we make are creating our habits and those habits will lead to a result and that result will be the same until we change that habit. So, if you never have any money but always do the same thing (spend it all), you will never have any money until you change that behavior. The same goes for those of you who always have money, continue doing what you are doing and you will always have money!
A couple of examples would be:
Coffee: Let’s say you buy a coffee every day and it costs you 3 USD. Maybe you could get a coffee, potentially even a better coffee but for 1.50 USD just by trying a few different places out. If you do, you still get your coffee but you get more value out of your money and you will have more money in your pocket (by the end of the month it will amount to 45 USD more!). If you wanted to, you could of course eliminate this expense completely and just drink the free coffee in your office and you would have 90 USD more in your account by the end of the month instead.
Mobile plan: Just use a comparison site to make sure you have the best deal for you, based on your usage. This might be one of the easiest ways of saving 10-50 USD per month! Again, you will still be able to do all the things you do with your phone, the only difference is that you will have more money in your pocket!
Motor Vehicle Service: When you need to get the service done on your car, don't just go to the same garage you have always used. Just call a couple of different ones up and ask them how much they charge for your specific service and what is included. By just comparing a few, I am sure you will find there can be a massive saving to be had! More money in your pocket!
Remember - every dollar you spend has been taxed!
I just want to remind you of the fact that every dollar you spend is a dollar on which you have paid tax (income tax). What this means is that if you spend 100 USD less, it is the equivalent of 150 USD of income if you are paying 33% in tax. If you are paying 50% in tax, then it's the equivalent of 200 USD!
This means that if you save that 100 USD, it is the equivalent of you working and getting an income of 200 USD! Every dollar you spend is a taxed dollar so the saving you make is actually worth more than the dollar amount just saved. Just think about this next time you are about to spend your money. Try to make this reflection and then decide if it's actually worth it or if you want to do something different with your money.
The Money Mindset Hacks to change (or just question) your behavior
If you really want to change things, you will have to start taking control over your mind and how you think and relate to money. The best way to do this is by checking out our posts How to change your money mindset and The Language of Money - a language for life. The sooner you start incorporating these money mindset hacks, the faster your will see clear financial and emotional results when it comes to money.
We want you to feel great talking and thinking about money and we for sure want you to know that you always have enough. Whether or not you are actually going to use them every time an “opportunity” arises, is completely different though. The key thing is to take control and knowing what one's priorities are, then these decisions and temptations will be so much easier to handle or ignore.
One of the key questions to ask yourself is: Is this purchase more important than my financial security?” In most cases it will not be. If it is, then just make sure you get the most out of your money when purchasing it. I would also urge you to avoid impulse purchases as they tend to be both unnecessary and expensive.
Get the same product or experience for less money!
The only thing I really want you to do here, is to question what and in particular how you purchase these products or services. By learning more about your purchase, it will be so much easier to compare and make sure you get the most for your money.
In the end it's all about your priorities and I am not going to tell you what to do or not. I just want to give you some savings ideas, show you a few of the things you could possibly change and what an impact they would have on you and your finances. A life on your terms is one where you have both time and money and by spending them wiser, you will have more of them. This should also free up more of your time or get you to “retirement” much faster. It is up to you whether you want to apply any of these savings ideas or not. The same goes for how you want to live your life, both now and in the future.
Before making any larger purchases, one should always compare prices online and in real life. Just compare a couple of different providers so that you know you are getting the best value for your money and still the product or service you are after. Another key thing is to make sure you are only paying for what you need and not for a lot of other things which you don’t need or might never use. This is particularly important when you are buying insurance. If you get it wrong, you might not be covered for what you want or you might be paying for a lot of things, not applicable to you.
Start your journey of having more money in your pocket by applying the simple savings ideas in this post: How to save +1000 USD in a couple of Hours!
SAVINGS IDEAS - Same purchase but for less money:
Anything you are about to purchase and which is standardized, always compare it with a few different providers! This goes not only for products but for everything you buy as any money you might save will stay in your pocket. The more you know about what you are purchasing, the easier it will become to make sure you get exactly what you want/need and that you only pay for exactly that!
Banking fees: You have to know how much you are paying in different banking fees (card fees, account fees, overdraft, commission etc.). Double check it and then just compare online what a different bank would offer for the same services and only the services you need! The ones who know the least (or who don’t pay any attention or can’t be bothered), are the ones paying the most fees! The amount you can save here will vary extensively depending on your banking needs but I am guessing you could save at least 100 USD per year if you are in the 50% tax bracket (even if you think you hardly use the bank...) Remember, you would have to make 200 USD of income to have this amount after tax.
Cashback: There are numerous sites and cards offering you cashback on your purchases. The best ones I would say are the ones online where you create an account and every time you enter a website with whom they have an agreement, you automatically get a cashback! Now you don't have to take part in each cashback program of every company. Instead you just sign up with one provider (who in turn has agreements in place with loads of different companies). This doesn't mean that you should buy more stuff of course, but the stuff you normally buy online, might automatically give you a cashback.
We recently bought some supplements online and were given a cashback for that. Just find the one in your jurisdiction that offers the best value and has the best setup. I am guessing the average is around 5% so if you purchase for 300 USD per month, that is another 180 USD per year in cashback going back to your pocket and if you are in the 50% tax bracket, you would have to make an additional 360 USD of income to make this amount…
Car insurance: Just use a comparison website and make sure you only pay for what you need and not more. Then compare the different prices and choose a provider you are comfortable with. The average car insurance premium in the states is 1,200 USD and the average household has two cars… If you can lower that with 20% by just comparing online, you should, as that would mean 480 USD more in your pocket! If you are in the 50% tax bracket, you would have to make an additional 960 USD of income to make this amount!
Car rental: Always use a comparison website like rentalcars.com but don't only look at the price as you also want to make sure you use a decent company. You should also check what kind of insurance you have with your credit card provider. Personally, I have a credit card which covers the excess on rental cars (so if there is an incident, my card provider covers the excess). This means that I don't have to buy the “additional” insurance they always want to sell you once you are picking up your car which can amount to 10-20 USD per day! Still, you always have to make sure you have the coverage you need.
Most likely the site you are using should also be linked to your cashback program which means you immediately also get money back on your purchase. Remember to always pay in the local currency if you pay when picking up the car, else you might be charged a very high currency conversion fee. You should be saving at least 10-20% compared to just using the usual car provider site. If you rent a car for two weeks per year, that could be a saving of 84 USD if we don't take the additional insurance savings into account. It would of course be even more if you were to compare the most expensive with the cheapest provider (for a similar car), then the difference would be hundreds of dollars!
Coffee: Let’s say you buy a coffee every day and it costs you 3 USD. Maybe you could get a coffee, potentially even a better coffee, for 1.50 USD just by trying a few different places out. If you do, you still get your coffee, but you get more value out of your money and you will have more money in your pocket (by the end of the month it will be 45 USD more!). If you wanted to, you could of course eliminate this expense completely and just drink the free coffee in your office and you would have 90 USD more in your account by the end of the month instead.
Eating out: If you have to go to the same place, see if there are any vouchers or deals for that specific restaurant that you want to go to and use them if available. If not and you still absolutely must go, try limit the amount of alcohol significantly as that tends to be the largest cost for most… Drinks can end up being half the bill and if you dine out once per month, that might be 30 USD (or much much more) in savings per week. That would be 1,560 USD per year and if you are in the 50% tax bracket, you would have to make an additional 3,120 USD of income to get this amount after tax.
Grocery shopping: This is usually one of our biggest expenditures so if you are able to do something here, you can have much more money in your pocket! I have written a quite extensive post about this one but the key point is that you can most likely find the exact same products in different stores at different prices. My comparison here in Sweden showed that the price difference of the exact same product was around 20%!! The only thing we had to do was to change the shop from which be buy our products. The average family in the US with two kids spends around 900 USD per month and if you can lower that cost by 20%, it would mean another 180 USD in your pocket!
Home insurance: Just use a comparison website and make sure you only pay for what you need and not more. Then compare the different prices and choose a provider you are comfortable with. The average home insurance premium in the states is 1,200 USD and if you can lower that with 20% by just comparing online, you should! 240 USD more in your pocket! If you are in the 50% tax bracket, you would have to make an additional 480 USD of income to make this amount.
Hotel booking: Always use a comparison site or take advantage of offers or points. Most of the times when choosing where to stay, there are other more important factors than just staying at a specific hotel. Personally, I often use booking.com or AirBnb depending on where I am and the availability. Booking.com gives me rebates as I often use their site but my cashback site also gives me some extra money back when using that specific site. Average saving, I would estimate at 10 USD per night so for 30 nights, that is 300 USD per year and if you are in the 50% tax bracket, you would have to make an additional 600 USD of income to make this amount after tax.
Interest: The money you pay on your loans or credit cards is a cost or fee that you pay for the luxury of being able to borrow the money. Interest can cost you loads and since there are so many providers it is quite easy to compare the interest they charge. Even something seemingly small can add up to a lot of value, especially if you just keep on paying and do so over a long period of time. High interest or a large loan (house) significantly impact the amount of money just evaporating from your account. Take control, compare and use the best ones! The average person in the US has a credit card debt of around 5,000 USD. If you are a couple (10,000 USD) and pay 10% more than what you could potentially get, you are paying 1,000 USD extra in fees every year! If you are in the 50% tax bracket, you would have to make an additional 2,000 USD of income to make this amount after tax.
Mobile plan: Just use a comparison site to make sure you have the best deal for you, based on your usage. This might be one of the easiest ways of saving 10-50 USD per month! Again, you will still be able to do all the things you do with your phone, the only difference is that you will have more money in your pocket! This could be a saving to the tune of 350 USD per year and if you are in the 50% tax bracket, you would have to make an additional 700 USD of income to make this amount after tax.
Motor Vehicle Service: When you need to get the service done on your car, don't just go to the same garage you have always used. Just call a couple of different ones up and ask them how much they charge for your specific service and what is included. By just comparing a few, I am sure you will find that there can be a massive saving to be had! More money in your pocket!
Pre-party! I bet you remember this from school. You bring alcohol over to a friend’s place and you have a little party before hitting the club or bar. Often these gatherings tend to be more appreciated than the actual clubbing… By doing this, you will most likely half your cost of drinks and be in great shape when you are heading out! If you host it at your place, there is a great likelihood that there will be plenty of drinks left so next time you don’t even have to buy any. Let say you do this twice per month and you save 30 USD per occasion, that equals 720 USD per year and if you are in the 50% tax bracket, you would have to make an additional 1,420 USD of income to make this amount after tax.
Savings rate! This is more like a reverse saving. By making sure you are getting the best interest on your savings and checking account, you are making sure more money ends up in your pocket! Just do an online comparison and open a savings account with the regulated financial institution paying the highest interest (check all the terms of course). This is just making more passive income, which is great!!
Second hand: Buy the stuff you really need second hand. It will save you loads of money. Many times, you can buy stuff that looks like new for a fraction of the price of a brand new product. No one will notice the difference but you will have so much more money in your pocket (or more stuff for the same amount of money). Let's assume you spend 300 dollars like this, that would probably equal 1,000 USD worth of spendings. So you would save 700 USD and if you are in the 50% tax bracket, you would have to make an additional 1,400 USD of income to make this amount after tax. Then of course there is also an environmental gain with second hand shopping.
Utilities: This is something we all need so we can't just eliminate these costs but we can always adjust how we handle them. Even if you don't change your consumption one bit, there are still savings to be made. Just use a comparison site every year to make sure you have the most appropriate (cheapest) provider. On average, a household of two should be able to save around 20% and that would amount to 500 USD per year (it of course depends on your annual consumption)! Again, this is money you save after tax so in order to make up for these 500 USD you might have in unnecessary high costs, you would have to make an additional 1,000 USD per year (if you are in the 50% tax bracket).
Water: This one I find quite outrageous. Why spend loads of money on water when in most of the western world, our tap water is of good quality? If this is not the case where you live, then maybe you want to pay for it or just get a filter. Let's just make the assumption that a person buys a bottle of water per day and it only costs 1 USD (yes, cheap). That is still 365 USD per year and the only thing one would have to do differently is to spend 1 USD the first day and then just recycle that bottle and fill it up at home in the morning for basically nothing. Carrying half a liter of water is not that hard and on average the bottle is not going to be full anyway! Buying expensive water is just money down the drain, keep it in your pocket instead! As you can see it all adds up. If you are in the 50% tax bracket, you would have to make an additional 730 USD of income to make this amount after tax!!
SAVINGS IDEAS - Change or eliminate your purchase / usage and keep the money!
Car(s): Check the above on how to make sure you pay the right (and lowest) amount on your car insurance. The even better alternative is of course to make sure you only have a car (or two) if you really need to as they are eating money! When you are absolute sure of what you need, then make sure you buy a car based on your needs, not wants. Check out this post on why you have to wake the fck up if you are buying brand new cars.
The difference between buying new and second hand cars can be worth hundreds of thousands of dollars! The absolute worst thing you can do is to buy a brand new car as the value of the car drops the most during the first three years. Check out the full post linked above and just make sure you make a choice where you are fully aware of the consequences and the financial implications it will have on you and your family’s life! Most people can't tell if a car is one year or even ten years old as long as it is well taken care of, so you don’t have to think about what the Joneses think. Well, regardless of what they think, you should live your life on your terms and not on based other people's opinions.
Eating out: Try to limit or eliminate this cost which can be a very significant expenditure. If you eat out every day, maybe you can adjust to do it every other day or even less. If you dine out a lot during evenings, drinks tend to quickly add up to a large part of the bill. Let's just say that you are eating out every lunch and if you instead brought food to work, you could save 5 USD per day. Not that much but… over 250 work days, that would mean a saving of 1,000 USD and then we have not taken any dinners nor drinks into account! If you are in the 50% tax bracket, you would have to make an additional 2,000 USD of income to make this amount after tax.
Health Insurance: The absolute most important thing is to take care of your health and prioritize long-term wellness (check out our Health Section for more information and inspiration). Second step is to make sure you have an insurance fit for your needs. Make sure you have the things covered for which you want to be covered and that you pay the least you can for that coverage. In the US, the average annual premium is 7,700 USD so a 20% saving would be worth 1,540 USD or 3,080 USD if you are in the 50% tax bracket. Again, use a comparison website or potentially a broker (but they will cost you).
Though I of course want you to do the above, the key advise is still to take control over one's health and get another XX additional years full of vitality. How could one possibly put a monetary value on that? Don't sacrifice your health for money as no money in the world can bring your health back, only you can do that and the earlier you start looking after your health, the better!
Pay-TV: This can be a big one in so many ways. The average family spends around 100 USD on pay-TV every month. I would suggest you cancel it all together and do something different for that money like learning new skills, develop your interests or spend time together. Most people spend numerous hours per day in front of the TV and that is not giving you any value which you can use in the market place and it is also likely to impact your health in a negative way. Anyway, if you can't cancel your subscription, at least try to adjust it so that you only have what is an absolute must and not a whole bunch of other channels. They are just distractions, taking away time from what is truly important to us; our family and our health. If you cancel it all together, we are talking about a potential saving of 100 USD per month or 1,200 USD per year! Remember that this is equivalent of you making another 2,400 USD in salary if you are in the 50% tax bracket…
Presents: Always be a generous giver but give with your heart and brain, not just your wallet. By just buying something expensive for the sake of it, your generosity will soon be forgotten. Instead, by being creative and actually making something yourself or purchasing something unique, you will create a win-win. Think about something that is dear to the person you want to find something for and give them an experience instead, maybe something you can do together. Most of the time, experiences are much more appreciated and if they are a good friend, what they really want is just to spend time together. Spend quality time together, where you give them your attention and focus on the details so that they really know you have put effort into your gift. This is something they will remember forever, whilst a handbag will soon be forgotten…
Showering: Just take shorter showers or shower in the gym after working out. Install an efficient shower head to reduce the amount of water used which also impacts the amount of energy used to heat the water. A family of four people, where every person showers 10 minutes per day would cost around 500 USD per year. By showering at home only half of the times, you could save 250 USD. If you are in the 50% tax bracket, you would have to make an additional 500 USD of income to make this amount after tax.
Temperature: By reducing your temperature at home you can easily save more money. The rule of thumb is that for every degree you lower the temperature, you save 3% so if you lower the temperature with 3 degrees that is around 10% on your heating bill! It might sound like a lot but consider the possibility of lowering 5 degrees when you go to work and then increase it again when you get back home. You can do the same at night to have a lower temperature whilst sleeping, which is healthy. That would mean you would only have to lower the temperature 1-2 degrees compared to your “normal” whilst being at home and you would still be able to make that kind of saving. If your heating bill is around 150 USD per month, that would mean a saving of 15 USD per month or 180 USD per year. If you are in the 50% tax bracket, you would have to make an additional 360 USD of income to make this amount after tax.
I hope these savings ideas have given you some inspiration as to where you can start fine-tuning things. I would love to hear how you are doing, so please leave me a comment or let me know if you have any concerns.