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If you’re having trouble saving, you’re not alone. The personal savings rate in the US has declined for most of 2021 and 2022. With inflation rising and interest rates rising, people are looking for more ways to save. Whether you’re in an emergency or just need a financial cushion, here are some tips to save money fast.
Why should you save money?
It’s important to save a nest egg for unexpected expenses like home repairs, car repairs, or medical bills. In addition, saving money can have a positive impact on your well-being. A recent study by Northwestern Mutual found that adults who work with a financial planner or are self-disciplined planners experience reduced levels of anxiety and improved sleep quality.
Saving money is probably part of it. The more you have set aside, the easier it is to be confident that you have the means to get by if you lose your job or find yourself in dire straits.
This is how you save money quickly
There are ways to save money slowly without sacrificing your lifestyle, and then there are ways to save money fast. If you need to build your savings account balance quickly, follow these steps.
1. Create a budget
Budgeting is the first step to saving money. List your income and current expenses – print out your bank statements if necessary. Categorize your purchases to see how much you’re spending in different areas.
2. Cut spending
Next, comb through each spending category to see where you can save the most. If you need to save money fast, you should probably focus on non-essential expenses first — categories like shopping, dining, memberships, entertainment, and gifts — since these expenses are easier to sacrifice than fixed expenses like housing and car payments.
3. Earn more
If you can increase your income while reducing your expenses, all the better. Negotiating a raise and getting a part-time job are two of the quickest ways to make more money.
4. Change your lifestyle habits
It can be difficult, but it’s very effective – and rewarding. Eliminating costly habits like smoking, drinking, impulse buying, and gambling can save you hundreds or thousands of dollars a month.
5. Switch to a better savings account
Check whether and to what extent your checking account earns interest. You can save more by switching to a high-yield savings account.
6. Curb impulse buying
Avoid going to malls and stores that you know will tempt you to make purchases and unsubscribe from promotional emails from your favorite brands. If you’re feeling too limited, you can shop online without spending any money by creating vision boards on Pinterest and creating wish lists on your favorite retailers’ websites.
Here’s a quick way to save money on a low income
If you’re on a low or steady income and making more money isn’t an option, there are still ways to save money quickly.
- Pay yourself first. After creating a budget, decide how much you want to save from each paycheck and have it automatically added to your savings. Then comes the most important part: Don’t touch.
- Make a spend-free month. You can still pay your bills, but you can’t spend money on unnecessary things during a spending-free month. Make a game out of it to stay motivated.
- Reduce the additional costs. Minimize your heating and cooling costs by adding or removing layers of clothing. Take shorter, cooler showers. Unplug electrical devices when not in use and switch to LED bulbs. Seal any air leaks around drafty doors or windows.
- Consolidate and eliminate debt. High interest rates on credit card debt make it difficult to get ahead. Check out debt consolidation loans to see if you may qualify for a reduced interest rate or lower monthly debt payments.
- Do it yourself. Instead of spending money on oil changes, home repair projects, or manicures, learn to do these tasks yourself. Search online for how-to videos and helpful DIY tips that show you how to fix or craft almost anything, often using items you already have around the house.
- Ask for help. Depending on your income and living situation, you may qualify for government assistance programs such as the Supplemental Nutrition Assistance Program (SNAP), the Electronic Benefit Transfer (EBT) system, or Temporary Assistance for Needy Families (TANF).
This will save you a lot of money quickly
Budgeting and cutting expenses will only get you so far. If you have a lot of money to save, additional income streams like the following will speed up the process.
- Get a higher paying job. This may mean asking for a raise or promotion at your current job, or applying for a new job. Now that it’s easier to find remote work, you might not have to worry about commuting or relocation expenses.
- Start a side hustle. There’s never been a better time to start a part-time job. Gig economy apps, like those that offer ridesharing and meal delivery services, make it easy to fit extra work into your schedule.
- Sell unwanted items. Consider selling anything you don’t use regularly. You can sell almost anything online through sites like eBay, Poshmark, ThredUp, OfferUp, and Facebook Marketplace.
- Rent out your space. Sites like Airbnb and Vrbo let you rent out a bed, while Hipcamp lets you rent out campsites on your property and RVshare lets you rent your RV. If you have an unused parking space in your driveway or backyard, you can use SpotHero to earn passive income. And if you have a pool or hot tub, you can rent it out by the hour with Swimply.
Ways to save money fast
Saving fast usually means minimizing your expenses. Here are some specific cost-cutting opportunities that can make a big difference.
1. Drive less
Consider whether selling your car and switching to public transit, ridesharing, cycling, or walking makes financial sense. If not, consider driving less to save money on gas and tolls — and possibly even car insurance. If you don’t drive much, switching to car insurance can be cheaper.
2. Minimize housing costs
Can you downsize by selling your home or finding a cheaper place to rent? Depending on the level of interest rates, refinancing your mortgage can also help you to save costs.
3. Reduce recurring expenses
Consider cutting subscriptions, streaming services, and gym memberships out of your budget. Host home meetings for entertainment, look for free events in your area, and visit free museums and libraries. Keep fit by exploring nature or doing exercises at home. You can also look into prepaid phone plans and cheaper internet services.
There is no perfect way to save money. But with a combination of the above tools and practices, you can save more than you think.
Whether you’re facing a life-changing event or just funding a new goal, saving money can be fun, rewarding, and liberating. It helps reduce clutter, cognitive load, and anxiety. Don’t think of saving as a chore, think of it as a way to take control of your finances and your life.
Find the best online savings accounts of 2022
Frequently Asked Questions (FAQs)
How do you create a budget?
There are several ways to create a budget, but the basics are to list your income and expenses, and then create spending and savings goals.
Can budgeting apps help me stay on track with spending?
Tracking your expenses just got a lot easier thanks to budgeting apps. Some of the best budgeting apps are Mint, YNAB (You Need a Budget), and Personal Capital.
Which home improvement sites can I save money on?
You can find DIY tutorials for just about anything on sites like YouTube, Pinterest, and Instructables. Companies like Home Depot and Lowe’s have both online and in-person tutorials to help you with automotive, home, and garden projects.