Saving money is difficult, with the cost of living constantly rising and our pay scale staying the same. Yet everyone has extra money hiding—waiting to be discovered and saved for the future. The key to finding this money is in breaking bad habits and making some positive changes that are easy to live with and endure.
Here are twelve months' worth of small changes that bring big savings rewards. Add them into your calendar over the year and see your progress.
- Save all receipts. Have a basket at home that all receipts can be placed in. Everything from gas, to groceries, to a pack of gum should be monitored. On the last day of the month, separate each receipt by category and take a look at your spending habits. Record each category total, for reference. The point of this exercise is to get a visual of exactly where your money is going and to be more cognitive of future spending.
- Establish a short-term saving goal. By saving a smaller amount, such as $5 to $10 a week, you will see the effect much sooner. Automatically transfer the funds; over time, it won't even be something you think about or miss.
- Organize your closets. Go through all clothing and sort items to be donated to charities or taken to resale stores. Many resale stores will give you a good value for clothes in excellent condition. Take the money from these items and put it into your savings. After your closets are clean, any new purchases will require an old item to be removed and resold or donated.
- It's all about change. Try to pay with cash only—dollars, not coins. Take all change given back and place it in a designated jar at home. By keeping as little as 50¢ daily, your total will be more than $180 a year. Make this a regular habit, and watch the jar's contents grow.
- Eat out half as much as you typically would. Plan meals for each week and make grocery shopping a regular thing. Stick to the list: No impulse buys! Statistics show that families that eat home regularly not only save money, but have more stability overall.
- It's time for energy-saving home work. Caulk and repair windows to reduce energy loss, replace old light bulbs, and use ceiling fans in the home; run fans counter clockwise in the summer and clockwise in the winter, to lower energy costs. Many websites, including www.energy.gov, offer great cost-saving tips.
- Discounts. Watch your mail for coupon books. You could get great deals on dining, haircuts, yard work, and much more. The Sunday newspaper is also filled with coupons to use at local grocery stores and elsewhere. Watch for stores that double coupon values, as added bonus.
- Review all current financial accounts and create a list. Watch for savings bond that need to be cashed, and for high-rate credit cards and flexible spending accounts that need to be used. Keep this list safe, in case of an emergency and for updating.
- Save for a long-term goal. Plan a vacation, car, down payment on a house, or other large expense at least eighteen months in advance. Calculate how much needs to be set aside weekly, open a separate savings account, and set up an automatic transfer. You now have three savings plans: short-term, change jar, and long-term.
- Have fun on the cheap. Find a weekly activity that is little or no cost to you. Volunteer, go to the park, host a game night, or visit with relatives. All of these are at little or no cost. Sometimes, simple acts in life offer the greatest rewards.
- Spend and save. With clear patterns established, you must now try to save for every dollar you spend on nonessential items. If you want a $4 coffee, you need to put $4 in savings, too. This goes for any expense that isn't necessary, such as clothing, dining out, and impulse buys.
- Review and budget. With your excellent knowledge of finances, plan out the next twelve months. Be realistic, and plan a comfortable budget. Remember: Life changes and the unexpected will happen, which is the whole reason for saving. You will feel far more optimistic about tomorrow, knowing that you're doing the right things today.
Written by Nicole Gray, the chief operating officer of Michigan-based The Navigational Group, LLC.