Saving money is a lot like dieting: a lot of self-denial in the present for some nebulous gain in the future. The problem is, this desirable discipline pits the head against the heart, the emotions against the intellect. You know you should pass up the ooey-gooey goodness of that hot fudge sundae if you want to fit into your clothes comfortably. Likewise, you know you should walk away from that hot new gadget because the money really should go into your savings account instead.
In both instances, the immediate emotional reaction is to feel how much you’ve lost at the moment. Your brain may be telling you you’re making the adult decision, but that’s a slight consolation to the inner child who wants his reward right now.
Billshark understands that the constant denial involved in saving money—like losing weight or working out—can be painful. But it is necessary if you’re to have a healthy body or a healthy savings account. Still, there are ways to put pennies (or more) aside that don’t necessarily involve an endless (and agonizing) stream of sacrifice.
Financial advisors recommend that people save between 10 and 15 percent of their income for retirement and emergencies. But statistics show the average American actually saves less than five percent. Most are saving even less, with nearly half of U.S. households unable to meet an emergency expenditure of $400. So saving money is critical to financial good health.
Before you start saving, though, figure out what you’re saving for: emergency, vacation, new car, retirement, etc. And try to put a positive spin on it. Think how good you’ll feel with $1,000 stashed away for emergencies so you don’t have to go hat-in-hand to friends or relatives when the car breaks down or the refrigerator goes on the fritz. Or consider the possibility that you’ll be able to retire early, and plan for that.
- Improve your credit score. This will probably yield the most significant savings over time. A higher FICO score will net you lower interest rates on everything from a home or auto purchase to credit card rates. Pay bills on time, don’t carry too much debt on credit cards (better still, pay them off every month), and check your score annually for free at annualcreditreport.com. Ensure that all the information shown there is correct and up to date.
- Take care of the things you own. Don’t leave your garden tools in the yard to rust. Have your car serviced regularly according to the owner’s manual recommendations. Become familiar with the maintenance recommendations on all your appliances, and follow them. Regular maintenance of your belongings will help them last longer, saving you money in the long run.
- Collect coins. If you toss any extra change into a piggy bank at the end of the day, you won’t miss it. Periodically take it to a coin sorter (available at many grocery stores), and immediately stash the proceeds into your savings account.
- Get free money. If you don’t clip coupons, start. Pick up a Sunday newspaper and take advantage of the coupon-filled inserts. (Or check out websites like Coupons.com and various store websites to print them out or store in your smartphone.) Make a list of your most frequent grocery purchases and watch the flyers for buy-one-get-one (BOGO) sales, then stock up. You can save hundreds of dollars a month just by employing these two techniques.
- Swap. Get some friends together for regular swap events, each with a different theme. One month do children’s toys or clothes, another time books, the next month kitchen items, costume jewelry, or garden supplies and plants, and so on. It’s a great way to get “new” things without spending a dime.
- Keep your receipts. If you change your mind after a purchase, you can return it within 30 days (some stores, like Target and Wal-Mart, allow you 90 days). Receipts will also come in handy if an item breaks down within the warranty period. In addition, full participation in many class-action lawsuits require that you have some evidence you bought the product in question. Use a tracking app to organize and retain your receipts.
- Save energy. The single most costly item on your power bill is heating, not just for maintaining the temperature in your home, but for any appliance that generates heat. Always run a full load in your dishwasher, and turn off the heat-dry feature. Use the stovetop or microwave in place of the oven whenever possible. Wash clothes in cold water (better for the clothes, incidentally) and line-dry if possible (plus, your clothes will smell outdoor-fresh). Make sure all your light bulbs are either CFL or LED, and turn out lights when not in use. Lower the temperature on your hot water heater to 120 degrees, and take short showers.
- Buy store brands. Everything from over-the-counter (OTC) drugs to canned goods to frozen foods is cheaper when you use the store brand. In nearly all cases, they contain the exact same ingredients, and it’s impossible to tell the difference.
- Let us help. For a free way to save a lot of money, let our sharks sink their teeth into your bills. We can save you hundreds of dollars, and you pay nothing unless we find you savings.