Recently, I have noticed a trend with my clients: I am issuing challenges with saving money. This happens because I see how much they are making and what monthly ballpark expenses are, so it would make sense if they could save $X each month. Why not try?
Sometimes they can, sometimes they can’t—but that’s good news, too, because we just created another point of clarity. And even if the savings amount isn’t exactly what I predicted, they are still saving more than when we started.
The Saving Money Challenge
Sometimes people try to save, and the money just disappears. This is why I think you MUST have an online, high-yield savings account to get the savings away from your normal, day-to-day cash flow (and away from instant gratification tendencies, which we ALL have to some extent).
Once you set up the structure, you might need strategies to figure out how to cut back. Of course, I advocate Conscious Spending, but I realize that sometimes to get started, people need a jolt (and then can integrate more balanced ideas going forward).
Here are the ideas (lots of them!):
Stop collecting, and start selling. I got rid of some jewelry given to me, but I never wore it (and had no sentimental value, like stuff my mom left me). So I took it to a gold shop, and guess what? I made $600. You can also sell stuff on Craigslist or eBay, such as clothes or exercise equipment on consignment.
Make your own gifts instead of buying stuff from the store. No one has ever gotten mad at me for bringing them baked goods. Then I don’t have to agonize over finding the “perfect” thing for each person. And since they’re consumable, they don’t fill someone’s closet with junk.
Master the 30-day rule. Avoiding instant gratification is one of the most important rules of personal finance, and waiting 30 days to decide on a purchase is an excellent way to implement that rule.
I bookmark things in my browser or add the item to my Wishlist if I am at Amazon. Quite often, after a month, I find that the urge to buy has also passed. If you’re on the fence about a purchase anyway, waiting a while can give you a better perspective on whether it’s worth the money.
Write a list before you go shopping – and stick to it. One of the easiest ways to save money is only to shop when you have a list. Because when you’re without one, you typically make impulse and unplanned purchases.
Creating a list before you go to the grocery store is especially important. Not only can it help you buy items that fit with your meal plan, but it can also help you avoid buying food you might waste.
Invite friends over instead of going out. Going out to eat or “out on the town” has a way of completely destroying both your food and entertainment budgets in one fell swoop. And no matter what, staying in with friends and developing your own entertainment is always cheaper.
Instead of hitting the town, host a potluck with your friends. Play cards, sit around a fire pit, or watch movies. One of my favorite memories with friends was a dinner I hosted, and we played Pictionary all night. You’ll have a blast.
Repair clothing instead of tossing it. Don’t toss out a shirt because of a broken button – sew on a new one with closely matched thread. Don’t toss out pants because of a hole in them – put in a patch of some sort and save them for times when you’re working around the house.
Anyone can complete most basic sewing jobs; a little practice goes a long way. Learning basic sewing skills is a great way to save some money – and extend the life of your clothing.
Don’t spend big money entertaining your children. Most children, especially young ones, can be entertained very cheaply. Realize that what your children want most of all is your time, not your stuff; I don’t have my own children, but when I was with my friend and her daughter, the best time we had was just hanging out, and playing games.
Negotiate rates with your credit card company or complete a balance transfer. If you’re paying a lot of interest on your credit cards, knowing that you have some power as long as you’ve been making your payments is essential. Not only do you have the right to negotiate your current interest rate with your credit card issuer, but you have the right to transfer your balance to an entirely different card as well. Start by calling your card issuer at the number on the back of your card and explaining your request. If you don’t make any progress with them, check out CreditKarma.com for your balance transfer options.
Buy video games with a lot of replay value – and don’t acquire new ones until you’ve mastered what you have. Focus on games that can be played over and over and over again, and master the games that you buy. Good targets include puzzle games and long, involved quest games – they maximize the value of your gaming dollar. Once you’re done with a game for good, take it to a video game resale shop and see if you can trade it in for store credit you can use to get another game.
Drink more water. Drink a big glass of water before each meal to stay fuller longer and ultimately eat less. Not only will you save on the food bill, but you’ll also feel better after you become adequately hydrated. Even better, drinking more water means spending less money on beverages like soda, juice, and tea. Tap water is not only just as clean as bottled water, it’s also free.
Avoid convenience foods and fast food. Try making some simple and healthy snacks that you can take with you. An hour’s worth of preparation once a week can leave you with a ton of cheap and easy dinner and snack options.
Quit smoking. If you’re still a smoker, you have to know by now that your habit is not only expensive but potentially deadly as well (I have a lot of empathy; my mom was a smoker for 40 years before she quit!). If you want to add years to your life and save a boatload of money, the easiest thing to do is to stop smoking altogether. You can quit cold turkey, try the patch, or switch to an electronic cigarette to buy some time. Whichever path you choose, you will be much better off.
Quit using credit cards. If you have a habit of getting into trouble with credit cards, hide your credit cards and keep them in a safe place in your home, not in your wallet. If you need to keep a card for emergencies, that’s okay. Just don’t carry it around with you. If you’re often tempted to use it, keeping your card “out of sight and out of mind” might help.
Avoid stress-spending. It’s easy to justify spending money just to wind down from a stressful day at work. However, it’s rarely a good idea. Instead of buying things you don’t need to make yourself feel better, finding other ways to de-stress might be wise.
Cancel unused club memberships. Are you paying dues at a club that you never use? Like, for instance, a gym membership or a country club membership? If you’re on the fence about any of your memberships or find that you’re not using them often, cancel them. Remember, you can always renew the membership later if it turns out you actually do miss it.
Buy used when you can. You can often find the exact item you want with clever shopping at used equipment stores, game stores, consignment shops, and so on. Just make these shops a part of your normal routine – go there first when looking for potential items, and you will save money.
Give the gift of labor. For new parents, give an evening of babysitting as a gift. If you know pet owners, offer to care for their pets when they travel. Offer up some lawn care as a gift to a new homeowner.
Declutter to save your sanity and some cash. Go into a room and go through every single item in it. Do you need that item? Are you happy that it’s there, or would you be fine if it were not? If you can find stuff to get rid of, get rid of it – it just creates clutter, and it might have some value to others. You spend time you might have otherwise used to be bored or watch TV, and you’re likely to get a lot of cleaning done in the process. It’s a win-win.
Prepare some meals at home. Get an accessible and easy-to-use cookbook (a good “beginner” cookbook is Mark Bittman’s excellent “How to Cook Everything“) and try making some of the dishes inside. You’ll find that cooking at home is much easier than you think – and way cheaper and healthier than take-out or dining out. Even better, you can easily prepare meals in advance – even handy fast-food-type meals. (BTW, here is my post on how I learned to save money on food).
Switch to term life insurance. Repeat after me: insurance is not an investment. If you’re stuck in an expensive whole-life policy, choose cheaper term insurance instead and use that difference in cost to get yourself out of debt and start building some wealth.
Universal and whole-life policies are much more expensive and offer a subpar investment opportunity. In almost every case, you’ll be much better off with a cheap term policy and more money in your pocket.
Avoid the mall. The mall might be a fun place to “people watch,” but it can also be packed with temptation. That’s why you should avoid the mall unless you need to purchase something. I people-watch in parks!
Master the 10-second rule. Whenever you pick up an item and add it to your cart, stop for 10 seconds and ask yourself why you’re buying it and whether you need it NOW, within the next 7 days…or not. If you can’t find a good answer, put the item back. This keeps me from making impulse buys regularly.
Rent out unused space in your home. Do you have an extra bedroom or in-law suite that’s not being used? Rent it out! If you live near a popular or tourist area, doing so could bring in a lot of extra money. Just make sure you know the risks and are willing to take the steps required to protect your family and possessions.
Create a visual reminder of your debt. To put your debt into terms that are easy to understand, make a giant progress bar that starts with the amount of debt you have and ends with zero. Each time you pay down a little bit, fill in more of that progress bar.
Keep this reminder in a place where you’ll see it often, and keep filling it in regularly. It can help keep you focused!
Cancel magazine subscriptions. Do you have a pile of unread magazines sitting around your house? It’s likely the result of a subscription that you’re not reading. Not only should you not renew that magazine, but you should call their subscription department and try to cancel for a refund. You never know – they might even give you the prorated amount back. I’ve had to cull my subscriptions, and I’ve never regretted it.
Eat breakfast. Eating a healthy breakfast fills you up with energy for the day while also curbing your desire for a big, expensive lunch. Meanwhile, breakfast can be very healthy, quick, and inexpensive. This one tactic helped me save on spending $100 per month at Starbucks!
Don’t fear leftovers. I started purposefully creating leftovers, I like them so much! I’ll make extra chicken, rice, whatever, so I can have it for lunch the next day. Adding some hot sauce or salsa zests it right up again.
Brown bag your lunch. Instead of going out to eat at work, take your own lunch — if not every day, then at least a couple of times a week. With some thought and minimal prep, you can create something you look forward to for your brown bag lunch. Some of your co-workers may not understand your desire to save money, but many might join you, especially when the weather is nice outside!
Go through your clothes – all of them. If you regularly feel the urge to buy clothes, go through everything you have. Take the clothes from the back of the closet and bring them to the front. Take the clothes buried in your dresser and pull them to the top. You’ll start to see brand-new options without buying a thing.
Learn how to dress minimally. Buy clothes that mix and match well, and you won’t need nearly as many clothes. (And I said recently I am obsessed with the idea of a capsule wardrobe!)
Ask for help and encouragement from your inner circle. The people who care about me? Cutting back has never been an obstacle to our relationship. Share your savings challenge with them and ask them to join you to hear about what they do to save money. You might be surprised to learn more about how they value money.
Start a garden. Gardening can be an inexpensive hobby if you have a yard. Just rent a tiller, till up a patch, plant some plants, keep it weeded, and you’ll have a very inexpensive hobby that produces healthy food for your family. I keep containers for herbs, strawberries and tomatoes (and enough to offer the squirrels and racoons).
Design your debt snowball (and stick to it). Plot out which debts you’re going to pay off and in what order. Simply having a plan goes a long way toward putting that plan into action, and paying off debts early is one of the surest ways to put money in your pocket over the long run.
Get a Crockpot. A crock pot or slow cooker is perhaps the best deal for reducing cooking costs in a busy family. You can dump in your ingredients before work, put it on simmer, and dinner is done when you get home. Crockpot meals are also notoriously good as leftovers, which can mean additional savings.
Pack food for road trips. Whenever you’re driving, take some time to pack snacks and meals you can easily eat on the go—I even pack food if I am going to be gone more than two hours during the day! That way, instead of stopping, driving around looking for a place to eat, spending a bunch of time there, and then paying a hefty bill, I can just eat on the road or, better yet, stop at a nice park and stretch for a bit.
Hit the library – hard. Reading is one of the cheapest – and most beneficial – hobbies around. But don’t look at a library as just a place to borrow books. Look at it as a free place to do all sorts of things. Learn a foreign language, meet people, use the Internet in a pinch, check out movies and CDs, catch up on magazines, and keep up on community events.
Find daily inspiration for making intelligent moves. Find something that makes you want to make positive changes, then use that person or thing as a constant reminder. Keep a picture of it in your wallet, in your vehicle, and on your bathroom mirror. Keep it in your mind as much as you possibly can.
Buy a smaller house. There are plenty of reasons to buy less house than you can afford. You’ll find that you still have plenty of room…but I can’t tell you how many times I haven’t bought a cool piece of furniture, simply because I didn’t know where I was going to put it and I wasn’t willing to get rid of another piece.
Eat less meat. Full disclosure: I love meat; my favorite celebratory restaurant is a steak house. But meat is costly when considering its nutritional value, especially compared to vegetables and fruits. And in almost every case, protein-packed staples like beans offer a much better value. Even if you don’t want to become a full-fledged vegetarian, you can save a bundle by eating meat less often. I need the protein, so I make sure to have hard-boiled eggs on hand and Vega One protein powder.
Make sure all your electrical devices are on a surge protector. This is especially true of your entertainment center and your computer equipment. A power surge can damage these electronics very easily, so spend the money for a basic surge protector and keep your equipment plugged into such a device. To save even more, unplug anything you aren’t using frequently to avoid phantom energy use.
Cut down on your vacation spending. Instead of going on a big, extravagant trip, pack up the car and see some sights in your surrounding area. Some of my favorite memories of my mom are of the staycations she used to create for us! We used to hang out at the community pool in the morning, and then in the afternoon, we would drive to a different park and explore.
Cancel the cable or satellite channels you don’t watch. Many people with cable services often are paying for a premium package that they don’t need. You might think that it’s worth it because you can watch a movie or a great series whenever you want, but it’s probably cheaper just to rent a movie. Get rid of the channels you don’t need and put that cash back in your pocket.
Exercise more. Go for a walk or a jog each evening, shoot hoops, or practice stretching your muscles at home. These exercises can be done at home for free but can greatly benefit your health.
Don’t beat yourself up when you make a mistake. Even if you make 10 good choices, it’s easy to beat yourself up and feel like a failure over one bad choice. Be gentle with yourself! If you make a big mistake and realize it, think about why you realized it now instead of then, and try to apply that lesson going forward. Learning something new is valuable too!
Always keep looking ahead. Don’t let the mistakes of your past drag you down. Forgive yourself for the actions you took that led to less-than-ideal results. Instead, focus on what your new behavior and thinking will get you in the future!
Never give up. Whenever you feel frustrated with where you’re at, remember you are not the only one experiencing this! Read a personal finance blog and remember that many people are out there fighting the same fight. It’s worth it.
What’s your saving money challenge?
Did you get inspired (or overwhelmed)? Try choosing one or two ways to save money, and experiment for a month…remember, saving money is behavioral, NOT academic, so you must practice!
P.S. You might want to check out my free workbook on Chief Initiatives – it helps you align your money with your goals and priorities. You can check that out here.
