By Bill Camarda | American Express Credit Intel Freelance Contributor
7 Min Read | March 18, 2020 in Money
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.
First, though, put yourself in the right mindset to start saving money with these three strategies.
With these in mind, let’s focus on how to save money in areas where many people may spend too much.
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:
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
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.
Fun doesn’t have to cost a lot to be unforgettable. Save money with some of these low-cost fun ideas:
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:
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
If you need a medication suddenly or urgently, it’s hard to shop around. But you can plan ahead for medicines you take regularly:
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.
3 “Free Energy Audits,” AMP Partners
6 “2019 5-Year Cost to Own Awards,” Kelley Blue Book
7 “Consumer Expenditures—2018,” Bureau of Labor Statistics
8 “11 Ways to Save Money on Entertainment,” Financial Avenue
10 “2019 Global Learner Survey,” Pearson
11 “Earn a respected degree. At about half the cost,” Western Governors University
12 “4 Things to Think About When Refinancing Student Loans,” US News & World Report
13 “What are the penalties for early student loan payment?,” Edvisors
14 “15 Ways to Save Money on Healthcare Expenses,”The Motley Fool