There are plenty of good reasons to learn how to save money. Your goals could be as long-term as paying down your mortgage, or as short-term as buying a new cordless vacuum. Either way, you’re preparing for the future. And when it comes to personal finances, a future-focused mindset is always a good thing.
Here are 15 things you can do right now to start saving money. Some take more effort than others, but all of them will help you save.
Upgrade your tech
There’s (almost definitely) an app for that
There’s a wealth of apps that can help you save money. That could mean learning to budget, tracking how you spend, keeping an eye on your credit score, finding the credit card with the best rates—or just about any other method for keeping more cash in your pocket.
To find the right apps for the job—and start using them ASAP—check out our article on must-have financial apps.
Let robots help you save
If you have trouble setting aside money every month for savings, it may be time to hire some outside muscle.
More and more financial institutions are making it easier for their clients to manage their income and stow money away for the future. Automated savings tools can set aside money for you each month hands-free, and help you track progress toward your goals.
Setting up a weekly or monthly contribution to your saving or investing accounts means you can push it to the back of your mind, and focus on other goals—while your money keeps growing.
Take a deeper look
Big purchase? Sleep on it
Sometimes, common sense clichés are clichés because they’re true. “Sleep on it” is one of them.
Studies say your unconscious does a lot of the work when it comes to making good decisions. Leaving 24 hours between deciding on a big purchase and actually spending the money could make a major difference.
One day may be long enough to let your intuition do its job. Maybe you’ll realize you don’t need that purchase after all—or you can find a cheaper alternative. Or maybe you’ll become even more certain it’s exactly what you need.
No matter what you decide, following the 24 hour rule for big purchases is a smart move. Your budget will thank you.
Inspect your regular expenses
Every three months or so, take the time to audit your regular expenses and look for ways to cut back. If you’re not already using a budgeting app, we recommend Mint which can make this job a lot easier.
It’s easy to slip into spending habits, and harder to slip out of them. Maybe you’ve started going to the pricey organic supermarket by your house, because it saves you a car trip out to the big no name store at the edge of town. Or maybe your New Year’s resolution fell through, and you’re left with a gym membership that you never use that’s charging your credit card every month.
Small changes add up. Taking a little time to audit your regular expenses and trim the fat can have a big impact in the long run.
While you’re auditing your expenses, make a special point of going through all your subscriptions, and removing the ones you don’t use or don’t need.
When it’s so easy—and so tempting—to use your credit card online, monthly services can start to add up. Maybe it’s time to use just three video streaming services, instead of eight. Maybe you don’t order from Amazon often enough to justify paying for Prime.
Cutting the cord on just a few services can save you serious cash every month.
Caught a windfall? Stash it
An unexpectedly large cash refund, a short-term investment with high returns, that $20 bill you find in last year’s winter coat: every once in a while, life hands you a nice surprise. You may be tempted to go out and treat yourself with that fresh new money.
But if you’re trying to save, make it a policy to hold onto any surprises that come your way. After all, there’s no such thing as free cash. Even luck comes in limited quantities. Consider putting any windfalls in your long-term investment account. It’s the best way to keep that good fortune coming.
Budget for the holidays
The majority of Canadians have no budget set for the holidays, or believe they’ll overspend. And nearly a third believe that holiday spending will undo all the good financial decisions they made during the year.
Next time the holidays come around, plan how much you’ll spend, and start saving up—so, by the time Black Friday rolls around, you’ll be spending cash, not credit. You’re not only helping to keep yourself on track financially. You’ll be taking a big chunk of stress out of the holidays. And that’s something worth investing in.
Make saving a habit
Borrow, don’t buy
The sharing economy has introduced a bundle of new ways to cut back on consumption, which means new ways to save.
That could mean making a big change—like selling your car and joining a rideshare program. Or it could mean something small—like borrowing a drill from the local tool library the next time you need to do some minor renovations. Seek out sharing opportunities in your community, and you could see the savings pile up.
Get serious about utilities
Sure, you know you can save cash by putting on a sweater instead of turning up the heat. And everyone understands you’re supposed to turn out the lights when you leave a room. But how often do you actually follow this advice?
It’s one of the oldest tips in the books, but being smart about utility spending is an easy way to trim your budget. That doesn’t mean cold showers and reading by candlelight. Just picking up a few good practices—like turning off the heat at night, or switching to LED bulbs—will put a dent in your monthly bill.
Think in hours, not dollars
A small shift in your shopping mentality can mean big changes in how you spend money. It’s simple: every time you consider a purchase, price it out in hours, not dollars.
Say you’re planning a fancy dinner out with friends. Spending $100 on dinner and drinks is no big deal, right? After all, it’s important to enjoy the good things in life.
But if your annual salary, when you break it down, works out to $15 in the bank per hour, then that dinner out is going to cost you almost seven hours of work. Would you give up seven hours of free time for a two hour dinner out? Could be worth it. Or it could be that a potluck starts to sound more appealing.
When you sell your labour, you sell your time. Keep that in mind, and your spending priorities begin to change.
Quit a habit in the New Year
Your New Year’s resolution is to get better at drawing, so you sign up for an art class. Or it’s getting amazing glutes, so you hire a personal trainer. Or you’re going to learn guitar, so it’s time for a trip to the music store.
These are all great ways to make positive changes in your life. Problem is, they cost money. Whether you wait for New Year’s Day to make a resolution, or you’re making one right now, just for the heck of it, try giving something up instead of taking something on.
We all have habits that cost us money. It could be a glass of wine with dinner every night, or an addiction to kitchen gadgets you barely ever use (hello, milk frother). But unless they really make your life better—as in, you truly don’t believe you could live without them—they’re candidates for quitting.
Giving up a pricey habit doesn’t just reduce expenses and help you save. It helps you practice willpower for the sake of improving your finances. That builds good habits—and it also makes it easier to accept sacrifices later on, in case you need to make them. Plus, you’ll get the chance to really think about what you enjoy in life—and devote resources to the hobbies, activities, and adventures that really matter. Sometimes quitting is the easiest way to win.
Having fun isn’t hard when you’ve got a library card
Decide you want to read a book, and you can pay to have it delivered to your ebook reader instantly. Decide you want to watch more foreign films, and you can sign up for a specialty streaming service right away. Entertainment is easier to access now than ever before.
But you may be neglecting one powerful local resource: the library. Library cards are often free, and they give you access to thousands of books, magazines, movies, and video games. More and more, libraries are branching out—letting members download audio books, access online course, take out video games, and even borrow musical instruments and tools.
Add up your monthly media entertainment budget, then take a trip down to the local library. You may find out you can drastically cut back on spending, while getting access to a whole new world of choices.
Make smart money moves
Make your money make money
If you’re stashing away money for a large purchase sometime in the next year, a high interest savings account is the way to go.
A high interest savings account works just like a normal savings account, but you get a higher interest rate in exchange for some minor restrictions on your money—like needing to wait a day or two before you get your money when you make a withdrawal. It makes sense if you’re planning to set that money aside for short-term saving, and not use it for day-to-day spending.
If you’re saving the money for longer than a year—an investment account may offer the opportunity to earn even more. Learn more about the differences between saving and investing.
Scope out the best credit card rates
Flight points, cash back, free groceries, oh my! If you’re going to be spending money on a credit card, you might as well shop around to make sure you’re getting the best deal possible. Pick the card that offers the “rewards” that will be most valuable to you, but beware of the pressure to accumulate points.
Keep in mind that credit cards give you these rewards as a way of incentivizing you to spend more money. And if you’re someone who tends to hold a balance on your credit card, forgo the points in favour of the lowest interest rate possible.
Debt: Divide and conquer
Speaking of credit cards… debt can be costly. There are two ways to tackle your debt: the snowball method and the avalanche method.
With the snowball approach, you grab a handful of debt and toss it away. That means paying down your smallest debts first. Eliminating one or two small debts—and the monthly payments you’ve been making on them—can give you just the morale boost you need to tackle the rest.
With the avalanche approach, you start paying down a wide swath of debts right away. Your best bet is to pay down a minimum amount of every debt each month, then use whatever surplus funds you can afford to take a chunk out of the biggest debt. At first, you may feel as though you’re moving slowly. But as your monthly minimum payments lower across the board, and your savings grow, you’ll eventually find yourself sweeping all your debt away. This approach can save you more in lowered minimum payments over time than the snowball method.
Follow these tips and you’ll be ready to start building your savings.