“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates a sense of order, trains forethought, and so broadens the mind.” –T.T. Munger
As T.T. Munger so aptly puts it, learning how to save money fast is an education in and of itself.
Having to deny yourself the instant gratification that comes with spending the money at hand calls for incredible mental fortitude; this is especially true in the era of “Insta-life,” where everyone wants it now, and Instagram models make their lives look so glamorous. It’s understandable to want to be like them. But you and I know better.
We know that saving for a rainy day isn’t just a phrase our grandparents used to throw around. It’s an actual need. Whether you are looking to save extra money for your emergency fund and potential unexpected expense, a new kitchen, or your kids’ college tuition—you name it—you will require self-discipline and a plan to reach any financial goal.
I can’t help you with the self-discipline end of things; I’m still learning that myself. I can, however, help you with the plan. Here are my most effective 20 ways of saving money fast so you can start trekking toward your savings goal.
1. Create a Budget
You guys know me by now; you know I am all about creating and sticking to a family budget. There’s just no way around it. You need to know where the money is going before you can plan on how to plug the holes and use your income better.
Here’s what I do: write down everything I spend money on for the first month. This is study month; just go about your spending business as usual. This is how you learn more about each bad spending habit you may have.
After the first month, go through that spending list and see what is essential and what is unnecessary. Entries such as your mortgage, gas, electricity bill, and so on are essential.
That $5-dollar latte every morning, the expensive dinners every other night, and impulse purchases are non-essential.
You can start cutting out these expenses and see how much money you save. You can even use a budgeting app if you need a little more support reaching your financial goal.
2. Start Putting Money Away
There are many doctrines to this; some say you should put away 20% of your income, others say more, and many still say you should start small and build the rhythm up.
Here’s what I did at first. You see all that money I designated as “non-essential” above? The lattes and the dinners out? I took the total amount I used in that first month and made it my baseline. To my surprise, it came to around $600.
So, I started with that amount and then went about finding other ways to save money fast.
3. Automate Your Savings
Now that I had the baseline ($600 a month), the next step was to automate the process. I set up a standing order from my checking account to my savings on the first of every month, still at $600.
So, whenever I banked my check at the end of the month, $600 automatically disappeared from my savings account.
4. Start Using Cash
This is a wonderful way to save money. Believe me! When you see the cash flying out of your wallet, you won’t be so eager to spend it.
I tried this for a while, but I have to be honest with you: spending only cash is a bit tiresome. So I would suggest using this method until you have your spending habits under control, and then you can go back to the credit cards.
5. Limit the Cash You Use
Just because you are spending only cash doesn’t mean that you should have access to an unlimited supply. Limit the amount you use every week.
As per your budget, how much do you need to use every week? If it’s $300, then carry only that amount with you for the week. If you end up spending all of it by Wednesday, refrain from replenishing the coffers until the following week.
6. Put Away the Leftovers
Another way to increase your savings quickly is to try as much as you can to save money from your designated weekly budget. Out of the $300, there are probably some purchases that you won’t need to make every week.
If you find that by Sunday, you still have some cash left over, don’t treat yourself to a sundae. See what I did there? Instead, put that leftover cash into your savings accounts. Every little bit matters.
7. Stop Spending for a Week
Every month, find a week where you don’t spend any money. I have to warn you; this is hardcore territory now. From $300 a week to the weeks where you have some of that leftover, find one week where you spend absolutely nothing.
I usually make it the first week of the month. This is when I’ve made all the mandatory payments, such as my mortgage and utility bills. I feel a little financially depleted at this time.
I go a week without spending anything and save that $300. I make my coffee at home, pack my lunch, and go straight home after work. To make it even more bearable, I alternate and might only do it every other month. Still, the money adds up.
8. Use Coupons
I bet you were wondering when this was going to come up, right? Yes, I am unashamedly a coupon lady. Ever since I learned how to use coupons, I have saved thousands of dollars on purchases that would have cost me an arm and a leg otherwise.
Use coupons as much as you can to save money and find some much-needed financial success. The extra cash you save will go towards a specific goal you have in mind, like your savings account at the end of the week.
9. Buy in Bulk
Apart from using coupons, I advocate buying in bulk when at the grocery store. It’s often cheaper, and in some cases, you can still use coupons to further sweeten the deal. I do my bulk shopping at the end of the month, so I don’t have to spend too much of my weekly $300 on essential purchases.
10. Go Generic
This is a trick our mothers used to save money and still give us what we needed at home. Whenever you buy brand products, you are paying for the name; that’s what makes them a bit more expensive than most. Store brands or generic products go through the same requirements as brand products but are cheaper.
Technically, most generic products are as good as brand products but cheaper. Go generic wherever possible and save some money when grocery shopping.
11. Use the Envelope Challenge
Let’s talk more about money goals. There’s a saving challenge that involves using 100 envelopes. The idea is this:
- Get 100 envelopes
- Label them #1-#100
- Put cash in the envelopes in correspondence with the number
For example, on day one, in envelope #1, put in $1. On day two, in envelope #2, put in $2, and so on until you get to envelope #100, where you put in $100. At this point, you will have saved a whopping $5,050, and then you can start again.
12. Download Cash Back Apps
Remember when I said you were going to need your credit cards at some point? This is part of what I meant. Using cash is a good way to contain your spending, but once you have the habit ingrained, you can go back to using your credit cards wherever it’s convenient.
What I do is use my credit cards in conjunction with cash back apps. This way, I get some of the money I spend back. This does require some research on your part. Look for cash back apps that:
- Give you cash and points back
- That allows for cash-outs
- That sends you actual money
13. Audit Your Monthly Transcriptions
I assure you, there are things you are paying for right now that you either don’t need or have never used. Do a thorough audit of all your monthly subscriptions, from cable to magazines and even the gym.
See how often you have used any of them in the last three months. If you don’t use it in any given week, get rid of it and send the equivalent of its annual subscription fees to your savings account.
14. Ask for Employer Retirement Matches
Does your employer offer you a 401(K) match? If so, you should take full advantage of that and whatever else is being offered. This is technically free money that gives your 401(K) a real boost.
15. Audit Your Cell Phone Plan
What are you paying for your cell phone plan right now? Do you ever use all the resources that are available to you through that plan? Chances are that you don’t, but if you do, see if you can find someone else offering a similar plan for less.
Chances are, someone is offering it for less. Take that information to your current provider and see if they are willing to match the other guys. If not, switch to the other guys and send the balance to your savings account.
16. Wait Before You Buy
With Amazon and all the other online shopping outlets available to use 24/7, it’s easy to spend money on things that you “want” rather than things that you “need.” I would suggest waiting about 48 hours before clicking that all-enticing “buy” button.
Don’t let vendors dupe you into thinking that the product is limited and going out of stock within the next millisecond. Just wait and see if you still want it as bad in 48 hours. If not, send that money to your savings account.
17. DIY Gifts
Gifts can be quite expensive. The painful part is that we can’t avoid them. If you are like me, you like gifting your loved ones on special occasions, but buying all those gifts can put a real dent in your finances.
A good way to go about it is to DIY as many of these gifts as you can. One huge advantage of doing this is that it forces you to put some thought into the gift you are going to give the person.
This gives your gift a better chance of having a higher sentimental value.
Here are some homemade gift ideas you can borrow.
18. Automate Your Bills
Part of learning how to save money fast is making sure you close off any avenues that allow you to lose money unnecessarily. Late fees and penalties can be hefty, especially when you look at them from a cumulative standpoint over one year.
That’s why I advocate for automating your bill payments. Collate all your bills and make sure that, by the end of the month, they are all paid off with no other pending accounts. This will keep you from incurring any late fees or penalties. That is money saved.
19. Put a Limit on Your Credit Cards
You can put a spending limit (daily or weekly) on your credit card. Many credit card lenders have this option; try and see if yours does, too. This is akin to the $300 cash-a-week limit we set above.
With this kind of limit, you are forced to only make purchases that matter, as opposed to frivolously swiping your card. In the long run, it does save you quite a bit of money.
20. Use the Envelope Budgeting System
We already covered one envelope system; now, let’s look at another. Called Dave Ramsey’s envelope budgeting system, this system requires you to take out all of your monthly budget in cash and put specific amounts in separate envelopes.
For example, your statutory expenditures, such as rent, utilities, and gas, go into one envelope. Your variable expenditures, such as groceries, entertainment, clothing, and so on, all go into their own separate envelopes.
The idea is to make sure that you only spend the money in the envelope as per its designation. If you spend all of your entertainment money on the first weekend, you can’t go back and withdraw more. You have to wait until next month.
This system is designed to teach you self-control and help you stick to a set budget.
Learning how to save money fast will be painful at first, but it can be done. These tips (infuse your own variations where necessary) will help you achieve that and more. The best part is that saving money is a lot like a snowball rolling down the hill.
The more you save, the more you feel motivated to save more as you see your savings account grow. I hope these savings tips get you started on the right foot!