13 Tips on How to Save Money Fast
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Saving money is a universal concern. Whether you’re an entrepreneur pooling together your resources to get your venture off the ground, an employee who needs a nest egg, or a high school graduate who’s soon going to have rent to pay, you’ll need to have a plan to save money.
But what are we really saying when we talk about saving money? We might be tempted to interpret saving money as ‘putting away some of our paycheck each month’, but does this mean those without jobs or regular income can’t save?
Not at all. Saving money is more about reevaluating spending than it is about putting money away. It requires a detailed survey of all the money coming out of your accounts due to living expenses, and assessing ways in which you can decrease that amount. This allows more to accumulate in different areas.
In this post, we’re going to examine the concept of ‘saving money’ in just such a way. Read on and learn about all the different areas in daily life you can cut expenses and, as a result, learn how to save money fast.
How to save money fast in a nutshell
- Approach saving money from both a long term and monthly perspective
- Look into finance apps to help with budgeting and investing, and review your current subscribed services
- Consider whether changing energy provider or bank account will lead to some savings
- Pay close attention to your credit card bill and make sure you are taking advantage of the rewards
- Find ways to cut down on car travel by carpooling and choosing days to cycle or commute
- Review your food shopping: make better lists, choose generic brands, and cut your overall budget
- Define your long-term savings goals clearly and learn how to invest intelligently
- Get the help you need on your tax declaration and review your insurances: don’t overpay and don’t underinsure yourself
How to save money each month
Saving money is a long-term goal, but long term goals are achieved with short-term achievements. The runner completes a marathon by putting one foot in front of the other, over and over. Approach saving money in the same way, on a month-by-month basis. Every month has regular expenses:
- Mortgage payments
- Health insurance
- Personal hobbies
- Social events
And surprise expenses:
- Vehicular repairs
- Appliances breaking
- Birthday gifts
Saving money monthly means assessing a lot of these and finding ways to manage them better: identifying pain points, planning ahead, and brainstorming.
Here are a few helpful ways to approach saving from a monthly perspective.
Use finance apps
Downloading and using finance apps is like employing highly specific, automated accountants to help manage your daily budgeting and long term savings plans. Because there’s such a variety of choice within finance apps, you’re able to cover many aspects of your savings needs.
This also means you should choose carefully and think hard about what you need the apps to assist you with. It would be an unfortunate irony to sign up to so many finance apps with the intention of saving money that you ended up losing money on subscription fees.
Read our article on finance apps for an in-depth assessment of the best ones for certain purposes, or take a quick look below at the kinds of options you’ll have:
- Budgeting apps simplify the often complex process of coming up with a budgeting plan by helping users put together savings plans and reach financial goals they set for themselves
- Investing apps provide a way for users to enter the stock market without needing much expertise, while doing so safely and with the resources to learn what they need
- Knowledge apps aim to increase users’ financial literacy through active learning with quizzes, games, mentorships, and connecting users to share tips and learn from each other
The 50/30/20 budget
Manage your subscriptions
How many subscriptions are you juggling at the moment? When did you last log into your Netflix account or use Amazon Prime for speedier delivery?
If you’re in a tough spot financially, cancelling all your non-essential subscriptions is one way to soften the monthly blow to your budget. However, because we live in a subscription economy, more of our essential spending is dependent on monthly subscriptions, both for mental health and everyday needs.
With that in mind, here are a few questions you can ask yourself about your current subscription load:
Can I use a friend or family’ members account instead? Netflix blames profit losses on account password sharing, but they were the ones who promoted it in the first place. Review all your entertainment subscription accounts and start doing the rounds: who has a free slot they wouldn’t mind lending you?
What kind of fitness subscription do I need? Cutting fitness out of your life shouldn’t be an option, and sometimes we need classes and venues to keep ourselves motivated. However, if you need to slim down your fitness budget, consider switching Urbansports for a gym membership, finding a cheaper local gym, joining a sports team for free, or exercising together with friends on a regular schedule
Where am I spending to save time? Subscription services do a great job of eliminating pesky trips to the supermarket and post office, or cutting down valuable time in the evening with delivered meals and specialised ingredients. That being said, saving money sometimes means spending more of your time. Work out if you can halt your ready-made meal services and find time in the evening to shop for cheaper ingredients and make meals to freeze and reheat.
Switch energy providers
It’s tempting to sign up with the first energy provider whose pamphlet arrives in the mailbox when you move into a new flat and just leave it at that. However, the need to save money should prompt a review of your energy provider. Prices raise, deals change, and inflation affects energy bills significantly.
Switching shouldn’t be taken lightly, however. You don’t want to end up in a worse situation because you didn’t do enough research. Start by reviewing a few of your recent bills to fully understand what you’re paying for and how much you’re getting out of it. Do some online research on the available companies and tariffs in your region and call the providers you want to know more about.
Switch your bank account
There are many ways your bank account could be costing you and it goes beyond hidden fees. Banks are financial institutions aiming to profit from their customers and some do this in ways that benefit the customer less.
On the other hand, your bank might not be offering you the kinds of services that could be making crucial savings.
A few features you should look for when selecting the right bank account are:
- Affordable pricing plans
- Low transaction fees worldwide
- Accounting software integration
If you’re saving money to fund your own business, choose a business banking account with the above features and more, like team cards to manage spending from employees, sub-accounts and insurance integration. Having the right bank account is smart spending, and smart spending is saving.
Still searching for the right business account? Penta might be a perfect match.
Keep an eye on your credit card
Saving money and keeping a credit card might seem illogical. After all, credit cards are for spending and can lead to debt accumulation—hardly what you want when you’re trying to save, right?
There are significant advantages and disadvantages to owning and using a credit card. If you pay your credit card bills on time, choose a limit conducive to your financial situation, and incorporate your credit card into your budget carefully, you can save money in ways that merely putting money away can’t:
- Build a good credit rating and be rewarded with better loan repayment options
- Make payments on better equipment for your work or home life
- Earn rewards and save on flights and grocery shopping
The key to saving money with a credit card is to manage spending carefully. These are some of the important aspects of credit card spending month to month:
- Low credit utilisation rate: this is a percentage that measures your credit card balance with your aggregate spending limit. To calculate it, divide the amount of revolving credit you’re currently using by the total amount: what you owe divided by what you have. Ideally, keep your rate around 30%, never above 40%
- Monthly bill paid in full: avoid debt and high interest rates by paying back your credit card balance in full each month. To manage this, don’t spend more than you can comfortably pay back each month
- Spending alerts: customised notifications when you’re spending extra or nearing your set limit will force some control into your monthly spending and keep you up to date with your expenses
If you still lack confidence in exerting control over your spending, it might be best to way up the benefits of using a debit card instead.
Reduce car travels
For some, travelling by car is an essential part of work or daily life. This doesn’t mean however that you can’t cut costs in how you approach car travel. There is always a smarter way to do things, it just takes planning.
Try to implement some of the following in your monthly travels:
- Home office
- Carpooling with colleagues
- A more fuel efficient car
- Cycling or taking public transport
- Regular car service
- Affordable insurance coverage
How to save money on food shopping
Food shopping is a necessity. Bothersome as it may be, cutting it entirely from your monthly budget would incur grave consequences. It’s true that choosing to cook your own meals will save in comparison with ordering in every night, but there’s still more you can do to crop the grocery list and save with every shop.
Cut your shopping budget
If you don’t have a grocery shopping budget, stop reading this post and put one together. It can be difficult to stick to, but a budget for groceries will exert much needed control over one of the most easily fluctuating daily expenses we incur. Shopping apps and spending limits can help with creating a budget more easily.
Once you’ve put together your budget, it’s time to see if you can cut it. Start by reducing your total shopping budget for the week by ten percent and seeing how you get on. If you find you can get by, reduce it by another ten percent. You might have to buy alternative brands, pick things on special, or remove certain things entirely, but the goal is to adapt to a new spending limit until it’s no longer feasible to lower it anymore.
Make shopping lists
Your shopping list can go beyond just one hastily scribbled list as you run out the door. One significant way a lot of people waste money is through wasting food. We don’t check the fridge before we leave for what we already have, we buy all new ingredients for a recipe instead of using what we already have to make something, or we let valuable ingredients collect dust in our cupboards.
A more active approach to shopping list creation can help with this. Here are a few tips for more versatile shopping lists:
- Create a ‘master list’ of commonly bought items so they can be easily checked off before each shopping trip
- Categorise your shopping lists: dairy, fruit and veg, meats, etc.
- Rotate a few different meals so you consistently turn over the same ingredients and always use everything
Buy generic brands
Brand choice, especially at the supermarket, goes a long way in saving money. It might be tempting to always choose the popular brands with the louder advertising, but overtime all this extra spending is going to accumulate.
Choose the supermarket with the cheaper house brands and start buying those. Most generic brands are equal in quality and you can avoid the ones that aren’t.
How to save money long-term
Monthly saving is important to help correct your daily spendings and accumulate money where it would otherwise have been wasted, but thinking long-term is how we make real progress with savings.
Let’s go through a few useful approaches to apply long-term thinking to your savings goals.
Set concrete saving goals
Setting saving goals requires focus and determination towards a more distant goal. It means choosing what you want and working towards it. This is instead of merely saying you’re going to ‘save’ and working towards an indiscriminate number for no specific reason. You’re much less likely to stick to this because you’re not working towards something. It’s like running a race with no end—eventually you’re going to give up and go somewhere else.
Think hard about what you’re saving towards. Is it to start your startup? Are you buying a house? Going for a long holiday? When you have a goal in mind, there’s an end in sight and a reward for all your hard work.
Also attach a time limit to your savings goal. While a specific reason for saving is important, this can still stretch on indefinitely as you keep trying to save more and letting other things get in the way. Saving until a certain period will force you to accept what you have been able to achieve and you will approach your goals more realistically.
With crypto bubbles bursting and a rapidly inflating market, it’s hard to know what to do with your money. Investing is a huge part of savings because we need to make our money work for us, we can’t just accumulate it and leave it alone.
Investing is a broad topic and difficult to summarise, but here are a few guidelines for approaching smart investing:
- Research, research, research: it takes time, but you’ll be glad you did it. Start keeping an eye on the market and looking into companies you’re interested in. You’ll need to understand how market fluctuations affect your chosen investment and learn to forecast how it will perform in the future
- Follow your passion: it’s much easier to invest in something you’re passionate about. This is in part because you’ll have to spend so much time reading up on it, but it also helps to have personal investment in something you financially invest in. You care more about its future and make more informed decisions
- Find stable investments: NFTs, crypto, and other investment options on DeFi markets might seem exciting, but their wild fluctuations betray volatility. Seek stability even in less stable assets. If you want to go into crypto, look into stablecoins instead. Better yet, look into buying solid metals like gold, which have boasted some stability for thousands of years
Do your tax declaration and learn how to deduct properly
Not only important for business owners, proper tax declaration can contribute significantly to your savings goals and a decent tax return might help pay a fine or bigger bill that you otherwise would have dug into your savings for.
When doing your tax declaration, make sure you think of all the right deductions and get help when you need it. It’s better to pay for a good tax return than to do one yourself poorly.
Check your insurances
Assessing the different insurances you currently have can be a good way to identify where you might be a) overpaying and b) where you might not be protected.
This one is especially true for small business owners. In Germany, private health insurance is far cheaper for small business owners (depending on a few factors) than public health insurance generally. You may be overpaying for health insurance which is a significant monthly drain on your accounts.
Losing your keys in Germany can be a nightmare. You might have to pay for new locks, and this is especially expensive when the key opens both the main building door and your apartment door. Organise insurance for losing your keys—it’s cheap and it could save you thousands.
Again, if you use a car regularly, review the available and compulsory insurances:
- Third party coverage: the minimum requirement for car insurance in Germany, you are covered for any damage you might inflict on others while driving your car
- Partial coverage: you are partially protected in the event of accidental damage (as well as third party)
- Comprehensive coverage: the most expensive per month, this covers accidental damage, third party, and any damage done to the car in which you are at fault
‘Breakdown insurance’ will also cover your towing costs which can be very expensive, and people moving to Germany might be able to include a ‘No claims bonus’ which can help reduce what you pay overall.
Conclusion: how to save money fast
Approach saving money in two ways: long term and short term. The short term should be built around your paycheck (monthly or fortnightly) and the long term should be based on achievable but ambitious goals you hope to meet by saving enough money.
Remember to always think of saving as spending smartly. It’s more about where your money is going than where it’s coming from. Learning how to save money is a holistic process in which you consider every aspect of your financial life and then try to reconsider it.
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