Have you ever thought about ways to save money, but you just feel overwhelmed? You are not alone. While it is not unusual to think that saving money is easy, people still end up with no savings over time. Spending money is unavoidable, but it can also be exciting! However, it is very important to save money and prioritize your savings goals.

There are a number of ways to save money without having to make huge sacrifices. Sometimes, the best and easiest way to begin saving some cash is to become more informed about your finances and spending habits. As they say, knowledge is power!

With this understanding, it is possible to start setting aside some of your hard-earned money right away. Although it may seem difficult to change your spending habits all at once, anyone can set aside some cash over a period of time. We all would love to have enough savings built up so that when a need arises, and we need money now, there will be money available in savings to address the need. To help enable you to save money and reach your financial goals in the long run, here are 10 of the most effective ways to increase your savings:

Top 10 Ways to Save Money

1. Make a budget
Making a budget is not just about tracking your expenses and paying your bills on time. Your budget is an important tool that can help you attain your financial goals. One popular budgeting approach is the 50/30/20 method, which can help you be highly organized and focused.

This approach maintains that after taxes are taken out of your income, 50% goes towards needs, 30% goes towards wants, and 20% should be dedicated to savings. A budget will help you control your spending and save a significant amount of money over time. 

2. Have a savings goal
Setting a goal is a great way to save money. Begin by determining a reason or identifying a purpose for saving cash. This may be a vacation, the purchase of an asset, or even retirement. Next, figure out how much money you will need, and the time required to save it.

Your budget will be very helpful in determining the amount you can comfortably save on a regular basis. This can range from daily to monthly, depending on your income sources. As a result, you will know how long it may take until you realize your goal.

3. Have low utility bills
When it comes to saving money, you should evaluate whether or not you are spending a lot on your utility bills. Utilities make sure that your home is functioning correctly and remains livable and comfortable, so they are an important expense. Knowing the average cost of electricity for  household appliances can help to lessen energy consumption and, in the end, save money over time. For example, studies have shown that TV’s typically consume more electricity than any other electrical household item. Be careful not to leave your TV on when you are no longer watching it.

Some other ways to reduce utility bills are acquiring appliances that use less energy, replacing old or leaky windows, and using energy-efficient light bulbs. Additionally, turning off lights and appliances when not in use is a great way to lower your utility costs. Also check with other utility companies to see if you can get a better rate. When you need help paying bills, this can be an effective strategy.

4. Cancel gym membership
You may be surprised to find out that most of the exercises you can do at the gym can be performed at home. You just need some creativity to achieve that. With YouTube instructional videos on almost everything, you can learn how to do various workouts at home on your own.

This means that you can exercise and achieve your training goals without going to the gym. You could begin by running or cycling around your neighborhood. Spend a few minutes and identify the types of exercise that you can do at home. You may also purchase some workout equipment that can help you exercise effectively at home. A lot of people pay a monthly gym membership and rarely, if ever, actually go to the gym. If this is you, call the gym and cancel your membership.

5. Establish an emergency fund
An emergency fund is a life saver when an unexpected financial situation occurs. Without an emergency fund, you could be forced to spend your savings to take care of the situation. This could include sickness, accident, disaster, job loss, divorce, or anything that may take you by surprise.

If you have an emergency fund, you will have money set aside to pay hospital bills, repair your vehicle after an accident, or pay bills for awhile after a job loss. Otherwise, you may find yourself needing a short term loan, which will require you to make a monthly payment. This will make it even more difficult to set aside money in an emergency fund. Even if you have to start small, for example $10 per week, it is very important to do everything you can to start building up an emergency fund.

Check Your Loan Rates

Answer a few short questions to see which personal loans you pre-qualify for. It’s quick & easy, and it will not impact your credit score.

6. Pay off or avoid debts
Debts can be huge obstacles that prevent people from saving money. Debts arguably rob your income. The bad thing about some debts is that they accumulate huge interest. This means you end up paying a lot of money that you didn’t spend.

For this reason, it is best to avoid debts as much as possible. If you have debt now, find ways to pay it off faster. You might even consider a debt consolidation loan. Once you pay off some debt and free up some cash, you can come up with your savings goals and then develop a strategy to accomplish them.

7. Save automatically
Automatic savings allows you to save cash without even thinking about it. Most bank account will allow you to setup an automatic transfer of a specific amount from your checking account to your savings account every month. Saving money automatically is considered one of the most effective ways to save cash. You can “set it and forget it.”

You may also have the ability to setup an automatic savings transfer with your employer to divert some cash directly from your pay check to your savings account. This is a great strategy because you never even see the money that is being saved. When you check your savings account balance, you may be pleasantly surprised at how quickly it is growing! Also, if situations change, or you meet your savings goal, it’s usually easy to have your employer terminate the automatic payroll deduction.

8. Have a spending freeze
This involves going for a week or some other set period of time without purchasing any nonessential items. By avoiding these items, you’ll very likely be surprised at how much you cut your spending and increase your savings. It may also be helpful to write down the amount for something you considered purchasing, but chose not to: impulse items at checkout lanes, Starbucks, unnecessary clothing, etc.  Sometimes seeing your progress can encourage or motivate you to continue saving money!

While this may be difficult for some people, it is a great way to minimize your spending and increase savings. Like other methods for saving money, having a spending freeze promotes a money-saving culture.

9. Reduce groceries costs
It’s easy to spend too much money on groceries when you’re not following a budget. Especially if you go grocery shopping when you’re hungry or if you don’t have a list you’ve prepared beforehand. You can save money on groceries by having a plan for your weekly meals. This will help you to stick to your budget and avoid incurring unnecessary costs.

You can also consider grocery pick up. The majority of grocery stores provide pick up services for a very small fee or sometimes for free. This enables you to save money since you will only buy the groceries you need and won’t be tempted to buy other things.

10. Spend unexpected or extra cash wisely
Occasionally, you may get unexpected income such as a work bonus, tax refund, or a nice salary increase, among others. Many people spend such income carelessly and don’t account for it in their budgets or savings goals.

However, it is highly recommended that you put the extra money to good use. For example, you could use it to pay off some debt, stash it away in a savings account, or use it along with a personal loan to reduce and consolidate your bills to make things much easier to manage. Getting a short term loan online could be a way to help you jumpstart this.

The most important thing you can do is just get started. There are many ways you can save money. As mentioned earlier, even if all you can do is save $10 per week right now, just do it. Be consistent and then add a few dollars per week whenever you can. It may seem like it’s not enough to matter, but do you realize that if you saved $10/week for a year, you’d have $520 in your savings account!

piggy bank to save money
Mike Lombardi, MBA

Mike Lombardi, MBA

Personal Finance Expert

Mike Lombardi earned his bachelor’s degree in Finance, as well as his MBA in Economics. He has been in the personal finance industry for 24 years. He spent 12 years working for a large bank as the loan operations manager before switching gears and managing client portfolios at a small wealth management firm. He enjoys helping people develop and implement a personal budget, formulate a strategy to improve their credit scores, and show them how to work towards becoming debt free by designing a debt reduction plan unique to each person’s situation.