10 Tips on How to Save Money
On of the most popular new years resolutions is saving more money. But many struggle with this goal and find it hard to save. Finally learn how to become a money master and handle your finances professionally! Our 10 tips will show you how to save money efficiently and get on top of your expenses. Make lists, track your budget or use simple apps so you can save a lot of money and reach all your financial goals quickly!
- Track your expenses
- Cut spendings where possible
- Set priorities for wants and needs
- Decide on your savings goals
- Try budgeting rules
- Download useful apps
- Try automatic saving
- Set no-spend days
- Consume at home
- Increase your income
1. Track your expenses
The first step to get on top of your finances is to understand your own spending habits. Track your expenses to identify where you spend the most money. Maybe you are an impulsive online-shopper once a month or simply cannot resist eating out three times a week?
Use a type of diary or notes book to record your spendings over the course of one month (or a longer period of time). Then, sum up your expenses in different categories to keep a better overview. Some might include the following. Also, there are a few helpful apps available we will show you later.
- Household (rent, electricity, wifi, cleaning equipment, …)
- Food (groceries, bills from eating out, …)
- Going out (movie theater, drinks at the bar, …)
- Hobbys (gym membership, language course fee, yoga subscription, …)
- Entertainment (Netflix, Amazon Prime and other subscriptions)
2. Cut spendings where possible
After you have tracked your expenses, you can see in which parts you spend the most money – probably unneccessarily. You haven´t watched Netflix in over a year? Cancel that subscription! Your gym is actually the last priority on your daily agenda? Maybe you don´t need it then. There is still an active membership to the book club in your hometown which you never visit? This certainly is an unneccessary expense!
Start by cancelling subscriptions and memberships you don´t need or use anymore. Even if a bill is small, don´t let anything slip which you dont actually want, need or use. Finally, these will accumulate to quite an amount of money and save you a lot!
3. Set priorities for wants and needs
Now, what is it you really want? And what do you actually need? That new PS5 is not essential to your well-being. Paying your electricity bill is. Start setting clear priorities of which stuff you need to pay for and which things are your wants.
First, make a list of all bills you must pay like rent, electricity, an average amount for groceries and so on. Then, make a list for things and activities you regularly do and spend money on because you like them. For example, going to the cinema once a month or going out with friends every Saturday. These are your regular wants. Find out which priorities these expenses have to you and which you could participate in without spending money.
Priorities are essential to spend money more consciously and less impulsively. Once you ´re set on what you want and what not, you will start to save money on unneccessary spendings.
4. Decide on your savings goals
Our next tip on how to save money is as simple as it is important. You need clear goals to see where your savings journey is supposed to go. This can be either a fixed amount of money, e.g. 500$ you wish to save in the next three months. It can also be an item like saving for a new bike.
This goal will keep you motivated and eager to keep going, even when you are longing for an impulsive spending. Alwyays keep the end of the road in mind. Maybe set your item of desire as your phone background so you are always reminded of what you are saving for!
5. Try budgeting rules
There are a lot of different theories on how to save money the best, easiest or fastest way. We will present to you a very popular strategy, the 50/20/30 rule.
When receiving your paycheck (after taxes), 50% of your earnings will go to needs such as rent, food and essential bills. The next 20% go right into your savings account or investments. This is the amount of money you effectively save every month. Finally, the other 30% are reserved for your wants and you can spend them however you like.
6. Download useful apps
There are many useful apps available to help you with every step of the process. We have prepared an extra article on the most useful tools to help you save money. Here, I will present a few apps which are particularly great!
- This tracking app keeps all your spendings from bank accounts and credit cards in one place. It shows exactly how much money you have left at the end of the month to keep a better overview.
- Toshl Finance
- Toshl Finance creates a personal spending plan for you. After entering a starting date and goal, you can watch your savings grow!
- This app analyzes your spending behavior and income paydays. Digit automatically tells you how much money you can save after paying your bills and taking into account your usual spending behavior. Then, it sets aside this small amunt of money daily and you can save money automatically!
7. Try automatic saving
Our next tip on how to save money is automated saving. This can be realized in many different ways. If you want to invest money in stocks, set up an automatic plan which transfers money out of your bank account and into your brokerage account monthly. This way, you save money passively without having to do anything!
Another option is by transferring money from your daily usage bank account to a savings account. This can also be automated and will help you save money. The app Digit (as mentioned above) is also of great help here!
8. Set no-spend days
Usually, we keep your wallet with us everywhere we go. Some people already have their credit cards stored in their phone so you can spend money whenever you need to (or want to). Maybe you find yourself spending small amounts in a daily manner. A cup of coffee from the café each morning, a quick snack on the go or daily grocery shopping will after all lead to high expenses.
Try to avoid this by consciously setting no-spend days. If you do your grocery shopping for the week on Monday, you can set no-spend days for Tuesday and Wednesday, for example. Eat at home and schedule events where you need to spend money on other days. This technique is very effective to avoid impulsive spending as well!
9. Consume at home
For many people, a lot of their monetary expenses are directly related to consuming goods, especially outside of their home. Going out to eat, watching a movie or drinks at the bar are common reasons for high spendings. Save money now by simply doing more at home!
- Have a dinner party instead of eating at a restaurant.
- Set up a movie night insted of going to the cinema.
- Make your own coffee and take it with you in a thermos.
10. Increase your income
Our last tip on how to save money is as obvious as it is hard: increasing your income. With a bigger paycheck or some money from a side hustle you have more options to save, especially when not changing your lifestyle after gaining more income!
We present to you a simple and fun way to make extra money in your free time. Try the app Poll Pay to take paid surveys and gain rewards. Whether you are riding the bus, waiting for a friend or simply laying on the couch: surveys only take a few minutes and are easy and quick to complete! Try Poll Pay now to increase your income the fun way!