How to save money?
In our current lifestyle we have our needs and wants; yet, our wants usually outweigh the needs. Psychologically we start to develop habits where if there is something we see we want to buy that item. There is the urge and temptation which work on our psyche that it is difficult to resist and then we fall into the spending trap. However, we have the ability to overcome and control our habits through self-discipline and understanding our limits. The method we need to incorporate is by saving money. Even if we are in debt situations, we can still save our money and reduce the wants in life. It will lead to sacrifices but it is worth it to learn how to become financially independent and conscious of where our money goes and where we need to put it towards. I will provide some of my saving methods that I am going through and to share from my learning experience.
1. Pay yourself first
I actually learned this from reading books as well as advice from friends. Whenever you get your paycheck, take a small portion; what you can afford; and put it into a savings account or a Tax Deferred Savings account. As you do this, the money will accumulate and the important thing is to forget about it and leave it until you really need it or build up a nest egg for future retirement. I know that there will be temptations to take some money out but we have to keep a disciplined mindset that the money saved is money for you and your family.
2. Use coupons, online rebates, earn rewards when shopping
Whether going to a grocery store to buy food items, there will be places where they offer coupons to save the extra 25 cents, 50 cents, $1 or even $5. Individually, these coupons do not seem like much but all together added up to a month’s or year’s time it adds up to a significant amount of savings. Anything counts to keep that extra money for future needs. There are also coupons that you can get online and print out, rebates such as Ebates to receive a certain percentage back when buying online products in the form of a check. If using a credit card to earn points for free grocery, ensure that you use it wisely and once you spend with a credit card then be extremely diligent in your repayment method. I have a MasterCard offered to me from a grocery company where I would get 1 times the points if I use it outside or 3 times if I shop at the grocery store or any chain stores owned by it. From my experience, I have saved so much and accumulated points fast to get $30 or $40 worth of free groceries.
3. Volunteer for overtime at work
If you are working at a company and they are looking for people to work overtime in your department, take that opportunity as this will give you more money to set aside and save towards.
4. Cutting extra services that you do not need
Whether it is a cell phone bill, television bill, car or home insurance rates, there are ways to lower the price to save money. With the case of cell phone or television, you can change the plan to a lower one if you are not using the extra data or minutes or watching premium channels. If you have a service from one company, you can ask them about a bundle rate to reduce the monthly cost. There is so much competition that you can research online of companies and compare their offers to what you currently have. The last thing a company wants is to lose customers (especially customers that have been with them for a long time) and only you can negotiate on reducing your payment and letting them know of the other offers you have found. Look for overlaps and redundant products or packages that are encompassing so that you can eliminate overlap and overpaying unnecessarily. I have had experience as well as my family of our current television/internet/tv company where it went up to the manager and then having a discount for 6 to 12 months. I was able to reduce my cell phone monthly plan as I was not using the full data plan as well as the minutes. At the same time I have been with my cell phone provider for over 12 years. With my car/home insurance, I was with an insurance company where I had both my car and home bundled. I also have a CAA plus membership for roadside assistance and emergency services in the case of my car breaking down. I shopped around online and had a discussion my colleague who was a former CAA employee (equivalent to AAA in the United States). He provided me tips on how I can get extra discounts from my membership by bundling my car, home insurance. When I called a CAA representative, I not only got the discount but my savings went up and spending went down 50%. My sister had a cell phone plan that cost her $100 to $150 payment (depending on the usage and overcharges). In a squeeze, she had to pinch pennies and discovered a cell phone plan with the same provider. All that she had to do was change her habits to text more and to only use WiFi. Her savings were about $1,100 in that year.
5. Sell miscellaneous items from home
There is a saying that one person’s junk is another person’s treasure. If you have many items at home which you do not need or are being used, there are ways to get money for them to add to your savings. Popular methods such doing a garage sale during the weekend is an option and there are online sites such as Kijiji or eBay which can gain exposure and even sell for more than you are offering.
6. Take advantage of energy saving products and times
If you use items such as a stove, microwave, washer, dish washer, all these use electricity and natural gas which will cost you when you get the bill. Check your local hydro company via their website or inserts on your bill as they should have energy peak saving hours. Using house hold items during low peak hours will significantly save you and reduce your energy bill.
Any household appliance that you do not use and are either on standby or sleep mode will still use electricity and should be completely shut off.
If you have a power adapter with multiple plugs connected but the items are not used (i.e. TV, video game console, computer, printer) will also use electricity through the adaptor. Consider turning off the power adaptor.
If you are using light, consider changing to LED light bulbs as they tend to use less energy.
For heat or air conditioning, set it at a reasonable temperature so that it will heat or cool the home without continually setting them on. If using a digital thermostat, there should be a program or timer that you can set the temperature to keep it at. Now with the age of smart devices, one can now set or change the temperature at home; turn on or off devices at home. The smart adaptors can be purchased at electronic or hardware stores.
What if I have debt?
When we have debt, it will be hard to save as first you have to pay the debt off. However, the things said above can help to accelerate paying your debt. It can also be a simple motivator. Cutting back on services we use gives us the opportunity to be able to pay the debt off sooner.
I would love to hear from you about your saving strategies, tips, other saving methods. Please leave me a comment below. Please note that I will also update this page to include more saving tips as I am going through my financial independence goals.