How to Save Money: Daily, Monthly and Long Term

 

NerdWallet

Knowing where to find savings and how to divide your income can stretch your dollars further.

Imagine what would happen if you found extra money in your monthly budget. Could you finally afford a real vacation? Could you sock something away for emergencies? Perhaps you’d be debt-free at last.

Figuring out the right steps to take to get where you want to go often requires some assistance. This guide can help you learn how to save money on everyday and monthly expenses. Plus, it includes tips on setting aside funds for the future.

Let’s get started.

How to start saving money

Saving money begins with your mindset.

Avoid thinking of money-saving techniques as restrictive — although they can often feel that way. 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.

Depending on how much you want to save, here’s how to do it.

Daily savings

Simple tweaks to your daily routine can yield small savings that add up over time. Check out the links below to find ways to save on everyday activities like grocery shopping, dining out and entertainment.

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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. Bank of America does the same each time you swipe your card. Click here to learn about apps that automate savings for you.

Take manual savings actions: 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.

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, then use coupons and loyalty programs to maximize your savings as you shop.

Order smaller servings at restaurants: Your social life doesn’t have to suffer for you to save money. Eating out every day will deal a major blow to your bank account, but you can still dine out and stick to your budget. Opt for appetizers or split an entree with your dining companion to save money when you eat out.

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 other discounts when purchasing tickets for everything including movies, concerts and theme parks.

Make your own gifts: The cost of birthday, wedding and graduation gifts can quickly add up. Go the DIY route or save money with affordable gift ideas, like herb gardens and gift baskets.

Map out major purchases: Time your purchase of appliances, furniture, 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.

Restrict online shopping: Make it more difficult to shop online. When you shop regularly at a retailer’s website, it’s convenient to create an online account to save your billing information. But if you force yourself to input your shipping address and credit card number each time you order, you probably will make fewer impulse purchases.

Monthly savings

Lowering recurring payments may require some legwork, but the potential savings make the effort worthwhile. You could save as much as $40 per month by changing your cable package or more than $50 per month by refinancing your car loan. Keep reading for more ways to save on monthly expenses.

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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. Click here to find more ways to save on internet service.

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. For starters, you may not need insurance. Removing it from your plan could save you nearly $100 per year, per line.

Monitor your electric bill: Big and small changes in your energy usage can help you save as much as $550 annually on your electric bill.

Lower your car payment: Refinancing your auto loan to take advantage of lower interest rates could save you $1,000 or more over the life of your loan. But that’s just one option. Click this link to discover other ways to cut your car costs.

Lower your student loan payments: Income-driven repayment plans can lower your monthly student loan payments by several hundred dollars each month.

Long-term savings

Saving over the long term — to build an emergency fund, take your dream vacation or make a down payment on a new home — doesn’t just happen. It requires planning and discipline. Learn how to set goals, track spending and save on your biggest expenses.

Set savings goals: Think about why you’re saving. Is a wedding on your horizon? Are you getting ready to buy your first home? Keep that picture in mind. It’ll help keep you motivated. Then set a specific but realistic goal. It may be “save $5,000” or “pay off my credit card debt faster.” It’s OK to start small. Little steps add up.

Track spending: Get a true picture of where your money goes today by keeping track of your monthly cash flow — your income minus your expenditures. This will also make it easier to mark progress toward your saving goal. Not sure how to get started? These five steps will help you track your monthly expenses.

Refinance your mortgage: Refinancing your mortgage to snag a lower interest rate can save you several hundred dollars each month. You need to get your ducks in a row before refinancing to maximize your savings, so check your credit score and avoid taking on new debt. Use our mortgage refinance calculator to find out how much you could save.

Get serious about a budget

Ready to get started? 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 put your spending plan into action, your efforts will bear fruit in your monthly budget. Remember to put your newfound funds in a savings account as you work toward your ultimate financial goal.

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Additional resources

Visit one of NerdWallet’s Life Event hubs to get financial advice for your current situation and to help you plan for whatever is on the horizon.

Use NerdWallet to discover small changes that can lead to big savings. Sign up for free to see what we can find for you.

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