Saving & Spending Budgeting & Expenses

How to Save Money and Not Feel Like You’re Sacrificing

There are hundreds of ways to save money, not just putting money in your savings account. Learn the different ways you can save more money than ever before.

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Updated Sept. 29, 2024
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Saving money doesn’t mean sacrificing everything you enjoy, nor does it require you to spend hours clipping coupons.

If you’re looking for easy ways to lower your bills and pocket more of your income, you’ll find a variety of clever ways to save money, establish healthy habits, and work toward your financial goals.

Small expenses add up fast, but the opposite is true as well. Finding areas to trim your budget, even by just a few dollars here and there, can lead to a lot of extra pocket change at the end of the month.

Plus, the more you can stash away, the better prepared you’ll be for future emergencies and retirement.

How to start saving money right away

1. Create a budget

Learning how to budget is an essential first step to saving money. That's because it's nearly impossible to take any other steps toward saving without first knowing how much money you bring in and how much you spend.

If you find the whole idea of budgeting overwhelming, you can try one of the best budgeting apps. They make it easy (and almost fun) to create a budget and adjust your spending.

When creating your budget, I suggest that you have at least one line item dedicated to savings. If you have multiple savings goals, you can have multiple line items. A good goal to aim for is to save 20 percent of your income, whether that’s in a single account or you split the money between goals.

2. Set savings goals

Setting specific savings goals allows you to plan out your savings strategy and improve your chances of attaining that goal.

For example, if you want to have $2,000 in six months for a vacation, you can then plan out how much money you need to put aside each week or month to reach that goal.

I recommend that you have short-term, mid-term, and long-term goals to work into your budget:

  • Short-term goals: You can usually reach these goals in less than one year
  • Mid-term goals: These goals can take 2 - 5 years to reach
  • Long-term goals: These goals take 5+ years to reach

After setting goals, it’s necessary to prioritize them. For example, if you have a goal to save an emergency fund, that should take priority over saving for vacation or another large purchase. After you reach one goal, you can move on to the next.

Find more ways to set savings goals.

3. Make saving automatic

The biggest hurdle to saving money is simply doing it. It's easy to forget to put aside that money for your vacation and then blow it on something else. Before you know it your entire paycheck is gone and you have nothing to show for it.

Instead, you can make savings automatic by taking advantage of online banking to set up automatic transfers from your checking to your savings account. You determine the frequency, but I suggest setting them up in regular intervals so you fund your savings without lifting a finger.

For example, if you earn $1,000 a week, you can set up automatic transfers of $200 to your savings account weekly. The money will not be in your checking account so you’re less likely to spend it and you can earn interest on your funds if you have them in a high-yield savings account.

Expert tip
Have your tax refund deposited straight into savings so you won’t be tempted to spend it.

4. Reduce expenses

Once you've created a budget, you have a better view of your spending and can look for ways to reduce it, freeing up more money you can put toward savings.

Here are a few of my favorite ways:

  • Dropping a streaming service you don't use that much
  • Downgrading or canceling your gym membership
  • Eating out half the amount of times you are now
  • Refinancing high-interest debts
  • Using cash-back apps to save money on necessities

You'll be surprised at how much cash you can free up with just a few changes. If you feel stuck and can’t find a way to reduce expenses, consider using the Trim app to help you find unused subscriptions and other expenses you can cut.

5. Eliminate debt

It's very easy to look at debt as just one of those expenses that you have to pay every month. But unlike housing, food, and utilities, most debt is optional and the longer it remains unpaid, the more interest you pay.

If you can learn how to pay off debt (say a credit card bill or car payment), you can free up more money to cover your everyday expenses as well as any goals you're working toward.

If you’re overwhelmed just thinking about your debts, consider the debt snowball method. Here’s how it works:

  • List your debts in order of smallest to largest debt
  • Pay as much as you can toward the smallest debt
  • Move onto the next largest debt when the smallest is paid off

6. Reduce costly spending habits

Reducing spending habits is different from reducing expenses. When you stop spending, you stop buying things you don’t need or just buy because you can. Expenses are more along the lines of costs necessary to live, such as:

  • Utilities
  • Housing
  • Medical care/insurance
  • Transportation
  • Food

But the problem is that many of us don't take the time to think about why we spend money the way that we do. Sure, you might look forward to that monthly gourmet coffee subscription, but wouldn't you rather put that money toward a vacation, a new car, or early retirement? The key is to look at the big picture and understand how each action affects your goals.

7. Cut back on entertainment

Meeting friends for drinks every Friday or eating out for lunch three days a week may seem like simply luxuries you should be able to enjoy. But they're not really worth it if they're preventing you from achieving bigger dreams and goals.

By cutting back on how often you go out, you can still enjoy an occasional evening of indulgence and social time with friends while still working toward your savings goals.

The 20% rule I talked about above regarding saving money is a part of the 50/30/20 rule, which also guides your entertainment/shopping spending. Using this guide, your regular expenses should be 50% or less than your monthly income, entertainment/shopping should be 30% or less, and savings should be at least 20% of your income.

So this doesn’t mean you cannot go out anymore. Instead, it makes you more intentional with every penny you spend so you can have fun and reach your financial goals.

8. Try DIY

They say everything in life costs either time or money. So if you have extra time in your schedule, you can save money by fixing or making things that you would otherwise buy or pay someone else to do.

Even if you're not handy or crafty enough to build your own furniture or sew your own clothes, you can still save a few bucks off of your weekly and monthly expenses by meal-prepping or mixing your own household cleaning products.

My favorite thing to do is try to replicate my favorite restaurant meals at home. This way not only are we saving money, but we’re also investing in our family’s health.

How to save money on expenses

If you’re looking for ways to save money, here are our top tips you can use to start saving and reach your financial goals.

How to save more money on utility bills

  • Go paperless. Many utility companies offer you a discount for paying your bill online and receiving paperless statements.
  • Schedule an energy audit. An energy audit can lead to energy-efficient improvements that could potentially save you five to 30 percent on your monthly utility bills.
  • Reduce your usage. You can save up to 10% on your energy bill each year if you turn back the thermostat seven to 10 degrees for at least eight hours each day. Be sure to adjust the temperature before you leave and wear appropriate clothing while indoors. Purchasing a smart thermostat can help you save money on utilities as well.
  • Swap your lightbulbs. Energy Star light bulbs use 90% less energy and can save you around $55 in energy in the light bulb’s lifetime.
  • Install weatherstripping. If you weatherstrip your double-hung windows, you could save 15% on your heating and cooling costs.
  • Keep the shades down. Consider purchasing blackout curtains and keeping the shades drawn when the sun is up. The more you insulate your home, the more you’ll save on heating and cooling costs.

How to save on your cell phone bill

  • Shop around. Prices for service vary so be sure to compare monthly rates across providers for the service you need.
  • Opt for a group cell phone plan. Sharing a plan with your family, friends, or roommates can help you save on your monthly cell phone bill.
  • Be mindful of your data usage. Understand the data caps associated with your plan and be careful not to incur any additional fees.
  • Avoid upgrading. It can be tempting to snag the newest cell phone as soon as it hits the market, but you’ll save money by sticking with your old phone for a couple more years.
  • Have a company negotiate for you. There are some companies that will negotiate your bills for you and take a cut of your savings. For example, the Rocket Money app saves users money by canceling unused subscriptions and negotiating rates with providers.

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How to save on your cable bill

  • Cut the cord altogether. Eliminate expensive cable bills and take advantage of as many free or low-cost streaming services as possible.
  • Negotiate with your provider. Most cable service providers would rather extend your introductory rate than lose your business to another company. Call when your contract is almost up, and again annually, to see whether you can secure a lower rate.
  • Downsize. Choose a less expensive package with fewer channels or get rid of your DVR and use a streaming service instead.
  • Bundle. Some companies will let you bundle internet, cell phone service, and cable for one low price. Take advantage of these opportunities to save, but only if you’ll use all of the services included.

How to save money on insurance

  • Compare auto and home insurance quotes. With so many options for insurance, it can be difficult to know whether you’re getting the best deal. Use a marketplace, such as Provide Insurance to see personalized insurance rates side-by-side and snag the lowest offer.
  • Assess (and consider reducing) your coverage. Do you still need the amount of insurance coverage you originally signed up for? Maybe you paid off your mortgage and don't need as much life insurance coverage, or you’re not driving currently and don’t need comprehensive car insurance coverage. Reassess your insurance needs annually and cut back accordingly.
  • Ask about special discounts. You may be able to get discounts for safe driving or save by bundling your home and auto insurance policies. Making a larger down payment or paying your premium in full could also qualify you for a discount. Always ask about all available discounts to see what you can get.
  • Practice preventative healthcare. Most insurance plans cover an annual primary care visit. Be sure to get a checkup and also see a doctor right away if a problem arises. This can save money on healthcare costs in the long run.
  • Quit smoking. Not only will you save a ton of money by not purchasing cigarettes, but you can also reduce your health insurance and life insurance premiums.
  • Compare life insurance quotes. Several of the best life insurance providers offer surprisingly low rates. Compare quotes with online insurers to find an affordable option.

How to save money on groceries and essential items

  • Make a shopping list and stick to it. It’s easy to get distracted by non-essential purchases and leave the store with a year’s supply of cheese. Always make a list of the items you need based on the recipes you have planned and stick to it. Bring someone with you to keep you accountable so you don’t fall for impulse buys.
  • Plan meals based on what you have at home. Shop your pantry and refrigerator first before going grocery shopping. Using up what you have is good for the environment and saves you money. Consider using a tool like Supercook to find recipes based on the ingredients you have at home to make it easier.
  • Buy in bulk. Assuming you have the storage space, always buy the larger package of dry goods and cleaning supplies, and buy bulk fresh food you know you’ll use as well. Before you do, though, calculate the per ounce cost to ensure it’s a good deal. Typically, bulk purchases are cheaper, but not always.
  • Don’t be brand loyal. Consider only buying brands that are on sale and if you have a favorite brand, stock up when it’s on sale so you don’t have to overpay when you run out. Also, don’t be afraid to try generic brands or shop at Aldi. Many of the items are made in the same facility; you just pay for the fancier packaging.
  • Opt for reusable items. Buying reusable storage and cleaning supplies can help you save money and protect the environment because you don’t have to keep replacing them.
  • Grow a garden. Herbs and spices can be expensive, but growing your own can be fun and save you money. If you have the space, consider starting a vegetable garden as well.
  • Drink tap water. Stop buying bottled water, and opt for tap water and a Brita filter instead. The filters are much less expensive than the cost of buying water bottles regularly.
  • Look for coupons. When you shop online, be sure to do a quick coupon search before checking out, or use a browser extension from a cashback or price comparison app, like Capital One Shopping, that will find coupons for you automatically.
  • Use a rewards credit card. If you do a lot of your shopping at grocery stores, consider applying for one of the best credit cards for groceries. You can use your rewards for future travel, or redeem them for cash or gift cards.

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How to save money on credit card interest

  • Set up automatic payments. Automatic payments help you avoid missed payments, late fees, and penalty APRs. Just make sure you have enough money in your account on the date you select for payment.
  • Negotiate a lower rate. If you make your payments on time and use your card responsibly, your credit card company may allow you to negotiate for a lower interest rate.
  • Apply for a balance transfer card. The best balance transfer cards offer a 0% introductory APR for 12+ months, so you can put more of your money toward debt payments and save on interest.
  • Apply for a personal loan. If you have good credit, you may be able to consolidate your credit card debt with a personal loan. This works best when you can borrow enough to cover your credit card balances at a lower interest rate than what you’re currently paying. Check out our picks for the best personal loans.

Use Cashback apps to save even more

As you learn how to save money, you’ll find that there are ways to earn rewards that are the equivalent of saving and allow a little more freedom in spending.

Here are my favorite cashback apps:

  • Fetch: If you don’t want to clip coupons, Fetch will reward you points just for scanning your receipts from grocery stores, convenience stores, gas stations, restaurants, and big-box stores. Each receipt pays at least 25 points.
  • Ibotta: There are three ways to earn with Ibotta: linking your store loyalty card to your Ibotta account, shopping online through Ibotta, or preselecting offers and then scanning your receipt after making a purchase. You can redeem your earnings for gift cards or Venmo or PayPal payments.
  • Drop: Drop lets you earn rewards at more than just grocery stores by using a linked credit or debit card. You can get points for shopping at more than 500 brands and redeem them for gift cards.
  • GetUpside: With Upside, you can browse local offers on a map, claim the offer, and scan your receipt after your purchase to earn cash back in the app. You can earn cash back on groceries, gas, and restaurant purchases and redeem your cash back for digital gift cards or PayPal payments.
  • MyPoints: You can earn points shopping online at over 1,900 retailers with MyPoints. And when you’re not shopping, you can take surveys, play games, and more for extra cash. It’s common to earn one to 10 points per dollar spent, and you can redeem them for a variety of gift cards.
  • Dosh: Dosh rewards you for spending at hundreds of retailers when you shop online with a linked debit or credit card. You can earn cash back at your favorite stores and once you earn $25, you can cash out via PayPal, bank account transfer, Venmo, or donation.

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  • Earn Cash Back on Gas and Food
  • Save Up To 25¢/gal On Gas
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Saving money without much effort

  • Open a high-yield savings account. Most checking accounts don’t pay interest, and if you have a large balance you’re losing money. Some of the best savings accounts offer generous APYs of 5.0%+ while charging no ATM fees.
  • Inject some fun into your savings habit. Yotta Savings offers a weekly lottery game with cash prizes which only requires one $25 deposit to participate. Choose the numbers yourself or have the app do it for you. Your Yotta savings account has no fees and convenient mobile access.
  • Cancel unused subscriptions. After all those free trials you signed up for, you’re likely paying recurring charges on your credit card for services you don’t even use. Trim is an app that unsubscribes you from unused subscriptions (like Amazon Prime or other streaming services). It can also help you set up an automated savings plan.
  • Take advantage of free offers on your birthday. Give yourself a treat or three on your birthday without breaking your budget by taking advantage of birthday freebies offered by hundreds of restaurants, retail stores, and entertainment outlets.

Roundup apps

Roundup apps automatically save or invest money for you as you spend. Some options include:

  • Acorns: When you link a debit or credit card, Acorns automatically rounds up your purchase and deposits the spare change into a diversified investment portfolio.
  • Chime: With a Chime account, you can elect to automatically deposit the roundup amount from your debit card purchases into a high-yield savings account.
  • Qapital: With Qapital, you can set your own roundup rules for automatically depositing funds toward one of your savings goals.

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How to save for the long haul

  • Work on your credit score. If you don’t have a good credit score, it can cost you hundreds or thousands of dollars per year in interest, insurance premiums, and more. Maintaining excellent credit will help you save.
  • Create an emergency fund. You should have at least three to six months’ worth of living expenditures saved in an emergency fund. This will help you weather financial setbacks and job loss.
  • Start a retirement account and pay into it each month. Financial experts recommend that you save 15% of your pre-tax salary per year, including employer contributions, in order to retire comfortably. Whether you have a 401(k) or an IRA, saving for retirement and making regular contributions could help you meet your long-term goals.
  • Separate your savings. To avoid borrowing from your emergency fund when you want to treat yourself, set up a separate savings account for large planned purchases like vacations.
  • Refinance your mortgage. Homeowners refinancing their current mortgage might get a lower interest rate or reduce their monthly payment.

FAQs

What percentage of your money should you save?

Most financial experts recommend saving 15% of your income for retirement. To be an effective saver, you should also consider setting aside money for other things, such as an emergency fund or large purchases.

As a general rule of thumb, it's a good idea to save at least 20% of your income in total.

What's the best way to start budgeting?

To start budgeting, consider tracking your spending for 30 days. That will give you a baseline and help you identify areas where you overspend and should cut costs. It will also ensure you're realistic with your budget.

Once you know what your spending looks like, decide what kind of budget is right for you. You can make a detailed budget that specifies exactly where every dollar goes or take a more relaxed approach with a budgeting app that can help do the heavy lifting for you.

What's the 30-day rule for saving money?

The 30-day rule for saving money involves committing to wait and consider major purchases for 30 days before pulling the trigger. There aren’t any hard and fast rules regarding how much a purchase must cost to fit this rule, so you can decide for yourself.

The 30-day rule is designed to help you cut down on impulse buys and to make sure you're researching large purchases carefully. Following the 30-day rule could potentially help you save by reducing unnecessary spending.

How can you save $1,000 fast?

There are two ways to save $1,000 fast: Increasing your income and drastically cutting spending.

If you can take on a temporary side hustle, you can potentially save all of the money you earn from it. You might also decide to slash all non-essential spending.

Giving up dining out, eating what's in your pantry without buying groceries, reducing trips in your vehicle to save on gas, and avoiding spending on entertainment are all ways to save or make money fast.

Bottom line

Don’t try to tackle all these ways to manage money at once. Instead, use the tips for saving money that require the least effort and will have the greatest impact. In my opinion, if you don’t have an emergency fund, that’s a good place to start.

From there, make a small change to your savings habits each week or a more significant change every month to work toward your financial goals. After a while, these new habits won’t feel like extra work; they’ll become a part of your lifestyle.

Making progress toward your savings goals means greater financial security for your future, and it also means having the ability to treat yourself every once in a while.

While you work toward a stocked emergency fund and retirement savings account, be sure to also set aside some extra money for goals that are a little more fun.

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Author Details

Lindsay Frankel

Lindsay Frankel is a Denver-based freelance writer who specializes in credit cards, travel, budgeting/saving, and shopping. She has been featured in several finance publications, including LendingTree. When she's not writing, you can find her enjoying the great outdoors, playing music, or cuddling with her rescue pup.

Author Details

Samantha Hawrylack

Samantha Hawrylack is a writer with more than five years of experience. Her work has been published in Newsweek, MarketWatch, USA Today, Rocket Mortgage, BiggerPockets, Crediful, and many more. She holds a Bachelor of Science in Finance and a Master of Business Administration from West Chester University of Pennsylvania, and she was previously a brokerage investment professional with Series 7 and 63 licenses at Vanguard.