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How to Start Saving Money by Spending More Mindfully

Help improve your financial future by learning how to save money on groceries, housing, education, and other monthly bills.

By Bill Camarda | American Express Credit Intel Freelance Contributor

7 Min Read | March 18, 2020 in Money

 

At-A-Glance

Learning to save money can be hard because it feels like you’re deferring gratification in a world seeking instant gratification.

But saving money to live better in the long run may not be as hard as you think—a lot of money “leaks” out through “holes” that may be easy to plug.

Bigger savings can mean financial security—and the ability to spend when it really matters.

The more money you can save, the more secure you’re likely to feel—and the more freedom you’ll have to spend when it really matters. For many of us, though, figuring out how to save—or even just getting started saving money—is challenging.

 

But getting your savings started might not be as hard it seems. When we look closely, we often find plenty of money leaking away through “holes” we hadn’t even noticed. You can make plenty of progress saving money by simply noticing and plugging the holes. This article shares dozens of nitty-gritty “plug-the-hole” ideas from various experts to help kick-start your savings.

 

Get in the ‘Start Saving Money’ Mindset

First, though, put yourself in the right mindset to start saving money with these three strategies.

  • Set goals. Are you starting to save money so you can own instead of rent your home? Take a vacation you’ve dreamt about? Get more education without taking on debt? Or just sleep better at night? When you’re saving with a positive goal in mind, the goal helps to ease any short-term pain.
  • Go long. Don’t think you have to do it all at once. As you explore these savings ideas, start with things you know you can do, so you can rack up a few successes and build confidence. Don’t forget: money you save can earn interest, accelerating your savings growth beyond just what you stopped spending.
  • Automate. Once you make some headway on savings, look for ways to automate so saving happens whether you think about it or not.

 

With these in mind, let’s focus on how to save money in areas where many people may spend too much.

 

 

1. How to Save Money on Your #1 Expense: Housing

The average American now spends roughly 37% of their income on housing. Most experts say it should be closer to 30%.1 Here are some ideas to help you start saving money on housing costs and get your percentage in line with the experts’ recommendations:

  • Consider saving on mortgage interest costs by prepaying, refinancing at current lower rates, or moving to a 15-year mortgage.2
  • Save money by downsizing, whether you rent or own. You can simplify your life and ditch the household items you no longer want or need.
  • Living alone? Save by splitting costs with a roommate or set aside a spare bedroom as an Airbnb, if you’re comfortable doing so.
  • If your kids are out of school, you could save money by moving to a community with lower housing costs—and school-related property taxes.
  • Get an energy audit to find savings on electric and heating bills. Some power utilities offer free audits, and DIY audit help is available on the EPA and Department of Energy websites.3

 

 

2. Save Money on Transportation

Vehicles can be “money sinks.” But whether you must drive or love to drive, there are many ways to save. You can make your car, SUV, or truck last longer by staying up-to-date with routine maintenance. And keep it longer: the average American vehicle is now 11.8 years old, an all-time high.4 Moreover, as it ages you’re less likely to need comprehensive or collision insurance—after all, your older car is worth less, and insurers won’t pay to have collision damage repaired if it costs more than the car’s book value minus your deductible.5 When it’s time to buy, save money by considering a recent used model. Focus on total cost of ownership (TCO)—some auto industry websites offer comparisons and note cars with low TCOs.6

 

3. Cook More at Home to Save Money on Food

When you combine groceries, restaurants, take-out, and the rest, the average U.S. household spends more than $7,900 a year on food.7 And the percentage of income Americans spend on food is rising because we’re spending more outside the home. Reversing that trend in your home may be a big opportunity to save money. Now that many cooking techniques are learnable via web videos, and millions of recipes are online, you might find cooking at home is easier, healthier, and more fun than you thought. While you’re at it, consider saving money by moving to store-brand foods.

 

4. Save Money on Entertainment

Fun doesn’t have to cost a lot to be unforgettable. Save money with some of these low-cost fun ideas:

  • Local events. Street fairs, free summer concerts in the park, local high school or college performances and sporting events, library events and book clubs can offer great experiences.
  • Culture. Explore low-cost local museums that fly under the radar, and find out when larger museums offer free or low-cost admission. (Many do at least monthly.)8
  • The library. We’ve been able to get even popular DVDs and audiobooks from our local library’s collection. And some libraries offer online access to content through services.9 Don’t forget college libraries.
  • Cut the cord. It’s not for everyone, but millions of Americans have replaced cable TV with lower-cost streaming options—or gone “back” to antennas for free over-the-air channels.

 

5. Plan in Advance to Save Money on Education

Eighty-seven percent of Americans surveyed say people need to keep learning or re-training throughout their working lives.10 Education can be expensive, but you can save money through planning. Look for:

  • Free opportunities to learn online.
  • Low-cost credential programs from accredited universities delivered online.
  • Opportunities to earn credits for on-the-job experience via “competency-based” education.
  • Lower-cost community colleges whose credits will transfer to four-year schools.
  • Combined bachelors/masters programs that let you earn two degrees in less time.
  • Lower-cost online programs from institutions that, for example, offer flat-rate six-month tuition covering all the courses you can complete in that time—so if you have the time and determination, you can save money and earn a degree faster.11

 

And if you’re repaying federal student loans, ask if your servicer will cut interest rates if you move to automatic payments or have paid consistently on time.12 If you can afford it, federal student loans can be prepaid without penalty—which can help you save money significantly by reducing total interest.13

 

 

 

6. Advanced Planning Can Also Help Save Money on Medicine

If you need a medication suddenly or urgently, it’s hard to shop around. But you can plan ahead for medicines you take regularly:

  • Get continuing prescriptions in a three-month supply.14
  • Look for equivalent generics your doctor trusts.
  • Ask about pharmaceutical company discount programs.
  • Ask your doctor for free samples.
  • If eligible, use your employer’s Flexible Spending Account (FSA) to pay with pre-tax dollars.

 

The Takeaway

If you’re motivated, you can start saving money now—and you may be surprised how much money you actually can save just by putting your mind to it and following some of these money-saving strategies and tactics.

Bill Camarda

Bill Camarda has more than 30 years’ experience writing about business, technology, and finance. He is author or co-author of 19 books on information technology.

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

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