How to Save Money Fast – Forbes Advisor
Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.
If you’re having trouble saving money, you’re not alone. The personal savings rate in the United States has been falling for most of 2021 and 2022. With inflation and rising interest rates, people are looking for other ways to save. Whether you’re dealing with an emergency or just want a financial cushion, here are some tips for saving money fast.
Why should you save money?
It’s important to keep a nest egg for unexpected expenses, such as home repairs, car repairs, or medical bills. Beyond that, having money in savings can have a positive impact on your well-being. A recent study by Northwestern Mutual found that adults who work with a financial planner or who are disciplined planners themselves experience lower anxiety levels and better sleep quality.
Saving money is probably one of them. The more you have set aside, the more you can rest easy knowing that if you lose your job or find yourself in an emergency, you have the funds to get by.
How to save money fast
1. Create a budget
Budgeting is the first step to saving money. List your current income and expenses and print your bank statements if necessary. Categorize your purchases to see how much you spend in different areas.
2. Reduce expenses
Next, comb through each expense category to determine where you can cut the most. If you need to save money fast, you’ll probably want to target non-essential expenses first — categories like shopping, dining, subscriptions, entertainment, and gifts — because those expenses can be sacrificed more. easily than fixed expenses like housing and car payments.
3. Earn more
If you can increase your income while reducing your expenses, even better. Negotiating a raise and landing a side contract are two of the fastest ways to make more money.
4. Change your lifestyle
It can be difficult to do, but it is very effective and rewarding. Eliminating costly habits such as smoking, drinking, impulse shopping and gambling can save you hundreds or thousands of dollars a month.
5. Upgrade to a better savings account
Check if your current account earns interest, and if so, how much. You can save more by opting for a high yield savings account.
6. Limit impulse purchases
Avoid going to malls and stores where you know you’ll be tempted to shop, and unsubscribe from promotional emails from your favorite brands. If you’re starting to feel too restricted, you can “shop” online without spending money by creating vision boards on Pinterest and tossing wishlists on your favorite retailers’ websites.
How to save money fast on a low income
If you’re on a low or fixed income and making more money isn’t an option, there are always ways to save money fast.
- Pay yourself first. After creating a budget, decide how much you’ll save on each paycheck and have it automatically deposited into your savings. Then comes the most important thing: don’t touch it.
- Do a month without spending. You can still pay your bills, but for a free month, you’re not allowed to spend money on non-essentials. Make it a game to stay motivated.
- Reduce utilities. Minimize your heating and cooling expenses by adding or removing layers of clothing. Take shorter, cooler showers. Unplug electrical appliances when not in use and switch to LED bulbs. Seal air leaks around drafty doors or windows.
- Consolidate and eliminate debt. High interest rates on credit card debt make it hard to get ahead. Examine debt consolidation loans to see if you may qualify for a lower interest rate or lower monthly payments.
- Do it yourself. Instead of spending on oil changes, home repair projects, or manicures, learn how to handle these tasks yourself. Look online for instructional videos and helpful DIY tips online showing you how to fix or make just about anything, often using items you already have around the house.
- Ask for help. Depending on your income and living situation, you may qualify for government assistance programs such as the Supplemental Nutrition Assistance Program (SNAP), the Electronic Benefit Transfer (EBT) system, or Temporary Assistance for needy families (TANF).
How to save a lot of money fast
Budgeting and cutting expenses only gets you so far. If you need to save a lot of money, additional income streams like the ones below speed up the process.
- Get a better paying job. This may mean asking for a raise or promotion at your current job or applying for a new job. Now that it’s easier to find remote workyou may not have to worry about travel or relocation costs.
- Start a secondary agitation. There’s never been a better time to start a side hustle. Gig Economy apps, like those that offer ride-sharing and food delivery services, make it easy to take on extra work on your schedule.
- Sell side effects. Consider selling anything you don’t use regularly. You can sell just about anything online through sites like eBay, Poshmark, ThredUp, OfferUp, and Facebook Marketplace.
- Rent your space. Sites like Airbnb and Vrbo let you rent a bed, while Hipcamp lets you rent campsites on your land, and RVshare lets you rent your motorhome. If you have an unused parking spot in your driveway or side yard, you can earn passive income through SpotHero. And if you have a pool or hot tub, Swimply lets you rent it by the hour.
Ways to save money fast
Saving money fast usually involves minimizing your expenses. Here are some specific ways to cut costs that can make a big difference.
1. Drive less
Ask yourself if selling your car and switching to public transit, carpooling, cycling or walking is profitable. Otherwise, consider driving less to save money on gas and tolls, and maybe even car insurance. If you don’t drive much, switch to car insurance per kilometer may be more affordable.
2. Minimize housing costs
Can you downsize by selling your house or finding a cheaper place to rent? Depending on interest rates, refinance your mortgage can also help you reduce your costs.
3. Reduce recurring expenses
Consider eliminating subscriptions, streaming services, and gym memberships from your budget. For entertainment, organize home gatherings, research free events in your area, and visit free museums and libraries. Stay in shape by exploring the outdoors or exercising at home. You can also consider prepaid phone plans and more affordable internet service.
There is no perfect way to save money. But with a combination of the tools and practices above, you can save more than you think.
Whether you’re facing a life-changing event or just funding a new goal, saving money can be fun, rewarding, and liberating. It helps reduce clutter, cognitive load, and anxiety. Consider saving money not as a chore, but as a way to take control of your finances and your life.
Find the best online savings accounts of 2022
Frequently Asked Questions (FAQ)
How to create a budget?
There are several ways to make a budgetbut the basics are to list your income and expenses, then set spending and savings goals.
Can budgeting apps help me stay on track with my spending?
Tracking your expenses just got a whole lot easier with budgeting apps. Some best budgeting apps include Mint, YNAB (you need a budget) and Personal Capital.