Best Ways To Save Money

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You haven’t convinced yourself yet that you can save money, even though you know you need to. You might not even be convinced that anybody could save the kind of money you need to be saving.

And we understand. We understand it’s hard, which is why we also understand what we’re up against here. It won’t be easy to make you believe there are effective and not-outrageously-difficult ways to save money at home that will create some financial breathing room for yourself and your household.

But you know what? We know you can do it. After all, the headline on this article caught your eye, right? That’s why you’re here, and that’s encouraging. It means you’re open enough to at least consider some possible solutions.

So read on and think about what might work for you from this list of the 16 best ways to save money. Some, you can manage on your own. For others, you might want help from a credit counselor at a nonprofit agency. Either way, these suggestions will make you believe it’s possible. We’re convinced of that!

1. Set a Budget

When it comes to a lack of self-confidence in your ability to start saving money, this might be Exhibit A. You already know you ought to have a budget, but creating one is intimidating. So maybe think of it this way: Knowledge is power, and the first step to becoming powerful enough to save money is to know how much you’ve been spending. That’s simple, right? So, start keeping track of every dollar you spend over the course of a month, even on the seemingly inconsequential things like that Snickers bar you picked up at the drugstore. Carve out five or 10 minutes a day to jot ‘em all down somewhere.

Then, at the end of a month, put those expenditures into categories – mortgage or rent, groceries, car payment, insurance, travel, utility bills, movies, restaurants, candy bars and anything else — and total each category up.

Do the same thing with your monthly income. Know how much you make and from where it comes. Put those numbers into categories that include your take-home pay from your job, your alimony and/or child support, disability, social security, interest on investments and whatever else.

Then you can compare how much you spend to how much you earn and start to make smart decisions about changing the dynamic between those two things.

Congratulations, you’re doing the impossible: You’re making a budget.

Here is some of the powerful knowledge a budget will bring you:

  • A budget makes it easier to know how to manage your debt.
  • It gives you a road map for setting and achieving your financial goals.
  • It helps you figure out how to squirrel away enough money to get you through an unexpected emergency.
  • Bottom line, it puts you in control of your money. You become invested in your own finances.

You don’t have to make it harder than it is. The only real hard part is making yourself start. And once you do, it’ll be easier to see your way clear to trying some of our other suggestions for the best ways to save money.

2. Eliminate Debt

 We know what you’re thinking. Yeah, like THAT’S going to be easy. And you’re right. It won’t happen with a snap of the fingers.

But one clever way to save money is to get your debts into a more manageable structure that will reduce the monthly payments you’re expected to make on them, and eventually will even relieve you entirely of those obligations. The budget you just created will show you how much damage those payments are doing to the state of your finances.

There are three main methods for softening the monthly blow of the debts you’re carrying.

  • Debt management: A debt management program is offered by nonprofit credit counseling agencies that have agreements with bank card companies to reduce the interest rate you’ve been paying. It cuts down on the amount of your monthly bill as well as the amount of time you need to get out from under your credit debt altogether.
  • Debt consolidation: This is a big loan from a bank, credit union or other lender that allows you to pay off a number of smaller debts, primarily credit cards, all at once. The right loan comes with a lower interest rate than the credit card companies charge. You’ll still have to make a monthly payment on it, but it will be for less than the total of the multiple payments you’ve been making.
  • Debt settlement: In this option, you pay less than what you owe, but the end result is a disaster for your credit score. You (or, more likely, a company you hire) and your creditor or creditors negotiate an amount that will settle your debt. You’ll have a certain period of time, also negotiated as part of the agreement, to save enough to pay that amount in one lump sum. In the interim, you won’t be expected to make any monthly payments. Add in interest charges, late payment fees and the fee for the service and you’re not saving nearly as much as you expected. Plus, it’s a negative on your credit report that stays there for seven years.

A nonprofit credit counseling agency can help you get started with any of those programs. But if you’re intent on doing it yourself, you can try the snowball method, in which you begin by paying off your smallest debt and working your way up to the largest. Every time you eliminate a debt, you free up some money to apply toward the next biggest one in line.

You can see, then, that there are productive things you can do with your debts when they’re standing in the way of helping you save money. So maybe this is what’s going through your mind now: Yeah! Why didn’t I think of that myself?!

3. Set Realistic Savings Goals

Identify what you want or need to do with the money you’re about to save, and why you want to do it. Think short-term as well as long-term. Short-term savings goals might be a vacation, a new car, a nest egg to cover an emergency on a rainy day, or even something less consequential like concert tickets or a new bike. There’s a lot to be said about the positive reinforcement you’ll get from setting and then achieving even small savings goals like that.

Longer-term goals might be retirement, college funds for your children, a bigger home, paying off a student loan, or getting out from under your credit card debt.

Once you know what you want, you can put together strategies to get it and track your progress through your budget. You can make the goals a family affair, too, so everyone will be invested in saving the money it takes to meet them. The priorities you establish should make it easier to stay motivated about the sacrifices it might take to get there.

4. Set Up Automatic Transfers

Here’s a clever way to save money: Take the decision-making out of your own hands. You won’t even have to think about this one. All it takes is setting up a regular automatic transfer of a certain amount of money from your checking account to your savings account. That way, when you pull out your checkbook, that money won’t be there to spend because it’ll be safe and sound in a different account that you don’t ordinarily use to buy stuff or pay bills. You’ve already saved it! And that pile of savings gets bigger with every transfer.

It’s easy to set up. In most cases, your bank’s website will have an option to schedule automatic transfers in whatever amount and frequency you choose. For example, you could schedule the transfers to happen once a week, once a month, or every time you get paid. The website will allow you to enroll in the program and authorize the bank to make the transfers you request, although some banks will want you to fill out an authorization form in person.

5. Cut Down Your Grocery Budget

You have to put food on the table. That’s non-negotiable, so don’t stop buying groceries. But a few sensible adjustments to your shopping (and eating!) behaviors can save you some money. You’ve no doubt heard this first one before, but it bears repeating: Don’t shop for food when you’re hungry! It’s a recipe for indigestion at the checkout register. Your empty tummy, it seems, is telekinetic. It can magically move yummy things into your shopping cart that wouldn’t get in there if you’d eaten a sandwich a half-hour earlier.

Here’s another one, with apologies to the Scouts (and Scar in “The Lion King”): Be prepared. Before you set foot in the grocery store, create a list of exactly what you need. The key word there is “need.” Not “want.” Don’t stray from your list. That’ll help save money on groceries in two ways. First, you’ll have started your list when you checked your pantry before you left the house and discovered what has to replaced, so you won’t fall prey to any I-don’t-know-if-I-need-this-yet-so-maybe-I’d-better-buy-it-now purchases. Second, you’ll have planned your family’s meals for the week ahead and added only the ingredients you don’t already have to your list.

Voila! You’ll be prepared to save money by not spending it on stuff you don’t really need.

And use coupons, of course. Regularly check your mail and local publications to see what coupon discounts are available. Stay up to date on store sales the same way. It’s worth it to wait until the things you need are less expensive, and stock up on them then.

The cost of the food you consume often is an eye-opening item in your budget. When you finish that first draft of it and realize how much you’ve been spending on eats, you’ll be pleasantly surprised how easy it is to nip and tuck those expenditures.

6. Cancel Unused Subscriptions

Do you ever get surprised by an automatic renewal of something you forgot you signed up for in the first place? That’s a pretty good indication you’re over-paying for it.

When saving money is a priority, take stock of your subscriptions and how you’re using them. Do you watch enough shows on Hulu to justify that monthly charge? Netflix? YouTube TV? Sling TV? Paramount+? Disney+? Pluto TV? Philo? If you do, fine. But maybe they started as diversions you enjoyed while you were cooped up during the pandemic. Do you watch them as much now as you did then?

Are you going to the gym as much as you thought you would when you fell for that fabulous introductory membership offer? How about the unlimited-movie-viewing plan you bought from the local cinema? Is that monthly fee still worth it?

And about that cheese-of-the-month-club plan you bought … when the muenster is moldy in the back of the fridge, it could be time to re-think its allure.

7. Reduce Car Expenses

As long as you’re reassessing things, re-think how much you’re spending on your wheels, too. You’ve likely got a monthly payment on your auto loan. You pay for insurance. You take it to the dealer for regular maintenance such as oil changes and tire rotations. And, oh yeah, you put gas in it.

That’s four pretty hefty outlays, all of which can be addressed as you ponder how to reduce your car expenses.

  • Refinancing: It really won’t take a lot of effort to shop around for a better loan. If you know the amount of your monthly payment and how much interest you’re being charged on your current loan, it should be easy to compare offers and find one that will cost you less per month.
  • Insurance: Instead of letting it auto-renew every year, take a look at exactly what you’re paying for and whether you need, say, roadside assistance coverage or new car replacement coverage or personal item coverage. Yes, those kinds of policies provide peace of mind, but you might never use them, and their value may differ from car to car. For example, basic collision policy usually covers the cost of replacing a totaled car, while new car replacement coverage might not apply to a car more than two or three years old and then only if you were the original buyer. Check around for a policy that better fits the way you use your horseless carriage.
  • Maintenance: Taking your car to the dealer generally will cost you more than having it serviced at a local auto shop. If you’re worried about the warranty, know that it’s illegal for a dealer to deny warranty coverage for routine work done elsewhere, though the dealer might try to insist on specifying which auto shop you use.
  • Gas: During the worst of 2022’s inflation, we all found out how costly fuel can be. But there are ways to make the most of what’s in your tank, including sticking to the posted speed limits (mileage usually decreases at speeds over 60 mph), reducing the weight of the junk you’re lugging around in your trunk, and buying the lowest octane fuel you can. Of course, the shopping-around suggestion applies here, too. If you look hard enough, you’ll find a station charging considerably less per gallon than the one right next to the interstate.

8. Refinance Your Mortgage

Chances are, your mortgage payment is the one of the biggest expenses, if not THE biggest expense, you face every month. But you aren’t locked into the terms of the loan you took when you bought your house. You can refinance it just like your car. Find a refinancing option with a lower interest rate than you’re currently carrying, and you can cut that massive monthly payment down to size a bit. That will take some of the pressure off your other monthly expenses and can amount to significant savings over the lifetime of the loan.

How do you do it? Part of the trick is waiting for the right time, when mortgage rates are lower than they were when you signed on the original dotted line and bought the house. For example, if you bought your house in 2020 or 2021 when rates were historically low, you might have trouble getting a better deal right now, as rates have risen considerably since then.

If that’s your situation, don’t despair. You’ll still have options to reduce your mortgage payments, such as extending the term of your mortgage and asking your lender to remove your Private Mortgage Insurance from your regular loan payments.

If your credit score is in good shape (usually 660 or higher) and you already have sufficient equity in your home (equity being the total value of your home minus what you owe on your mortgage), lenders will look more kindly at your refinancing application. As with auto financing and gas prices, it’s important to shop around. Get quotes and ask about fees from at least three, and preferably more, mortgage lenders to see what’s available out there.

9. Refinance Your Student Loans

You could keep waiting on the Supreme Court to rule on the legality of President Biden’s student loan forgiveness plan, of course, and hope for the best. But you’ve been waiting for that for a long time already. If you’re tired of the delays or you aren’t as optimistic about the prospects as the administration seems to be, there are several refinancing alternatives that can address the weight of the student loan debt you’re carrying.

One is an income-driven repayment (IDR) plan that ties the amount you pay to your earnings. That could make a big difference in your monthly obligation to those loans. The Federal Student Aid office in the Department of Education offers four different IDR plans, and you can ask your current loan servicer about IDRs, too.

The other alternatives are student loan consolidation and refinancing. The government will allow you to take out a separate consolidation loan for enough money to pay off the balances on your individual federal student loans. It’s a sensible way to go when the consolidation loan comes with a lower interest rate that results in one lower monthly payment than the total of the individual payments you’re making now.

Student loan refinancing works like consolidation, but it allows you to include your private loans as well as your government loans.

10. Reduce Your Cell Phone Bill

Take a moment or two and read the itemized charges and fine print on your latest cell phone bill. It could be you’re paying for features you don’t use or need, such as warranties or insurance. Too, track your data usage and make sure you aren’t going over your limit; the charge for using even one extra byte might set your hair on fire. (Yes, we exaggerate; an extra $15 charge probably won’t break your bank, but every little bit hurts.) And if you always seem to have data left at the end of the month, you could lower your cell phone bill by downgrading to a lesser, and cheaper, limit.

At the risks of overstating the obvious and repeating ourselves, it’s a good idea to survey the cell phone market every now and then and see how much you could save by using a different plan or a different carrier altogether. In other words (say it with us), SHOP AROUND!

11. Reduce Your Utility Costs

When you’re hot, you’re hot … so you set the air conditioning to deep freeze. You get cooler that way, sure, but you also get poorer. Same goes for the furnace. When you crank it up to ward off the dead of winter, you pay a price. We aren’t suggesting you shouldn’t make yourself comfortable, but when the temperature outside is extreme, a little moderation with the thermostat inside is a good way to save yourself some money at home. You’ll be surprised at the difference a few degrees one way or the other will make in your electric bill over the course of a year.

There are other ways to save money on utility bills, too. Some might involve new purchases to change out older, inefficient power eaters, but they’ll eventually pay for themselves. Others might only require some simple behavior modifications on your part. Start with small changes such as washing your clothes with cold water. Promptly repair leaks to save on your water bill. (Dare we suggest you could take shorter showers to achieve that goal, too?)  Replace your old lightbulbs with energy-efficient bulbs. Use a laptop computer instead of a desktop when you can.

Then think bigger. Upgrade the insulation in your home. Make sure you buy new appliances with Energy Star seals when it’s time to retire the old ones. Install solar panels.

By the way, your local gas and/or electric company is available to conduct a home energy audit for you. All you have to do is ask. It won’t cost you much, and it could even be free. The audit very likely will turn up a number of surprising and inexpensive ways to reduce your utility costs.

12. Try a Staycation

We all have answers to this fantasy question: Where, in the whole wide world, would you go if you could? If nothing else, our choices make for a great dinner table conversation. But you know how much a trip to Fiji or Vienna or Machu Picchu would cost. It’s money you’d never see again, even if you come home with plenty of memories.

So, when times are a little tough, maybe your answer to that question should be, say, a campsite at the state park just outside of town. Or the local college’s film festival. Or the little village known for its antique stores down the road. Or the lake a couple of counties over. You know, the places and pleasures in your real world that you haven’t ever really explored.

You’ll come home from those outings with plenty of good memories, along with a lot more room on your credit cards.

13. Unsubscribe From Marketing Emails

You have to look hard, maybe even squint, to find it because it’s buried down there at the bottom of those aggravating emails that bombard us every day. You know, the emails from that online store you might have visited once, or from the good cause to which you might have donated back when you were a little more flush, or from an insurance company trying to scare you into buying a junk policy, or from a politician begging for campaign contributions. Or you name it.

Sometimes it’s just one word, underlined to let you know it’s a link. The word is Unsubscribe. Sometimes, it’s a whole sentence: “If you would like to unsubscribe from emails like these, click here.” By law, the senders of these emails have to give you the opportunity to Just Say No to any more of their digital marketing, but they don’t have to make that opportunity easily visible. So, scroll to the bottom and find it. Click it. Learn it. Live it.

If the pitch comes at you in a text, reply STOP. That should get you off their list, at least in theory.

Don’t give them any more chances to tempt you. You’re trying to save money, remember?

14. Use Your Local Library

There’s a reason former First Lady Laura Bush famously said, “I have found the most valuable thing in my wallet is my library card.” She was talking about the big education picture, but her point is pertinent to our discussion in a smaller money-saving way, too. Why would you buy a book or a movie from a brick-and-mortar store or an online retailer when a library lends you the same book or movie for free?

And free entertainment isn’t the only way a library can help you save money. Some libraries lend museum passes, power tools, musical instruments, even fishing poles and more. Too, they often offer valuable current event or craft classes at little, or no, charge. Remember what Albert Einstein, who (believe it or not) might have been even smarter than we are, said about libraries: “The only thing that you absolutely have to know, is the location of the library.”

15. Utilize Buy Now, Pay Later Plans

When you need, or even want, something desperately and cash-flow is a problem, a Buy Now, Pay Later plan might be the solution … assuming you can pay later. Many stores, including some of the larger retail chains, make a buy now and pay later option available at the point of purchase. At checkout, rather than forking over the total cost, you agree to pay for the product you want or need in several (usually two to four) future installments, and you still get to go home with it right then and there. In most cases, the installment payments will be automatically withdrawn from your debit card account.

A Buy Now, Pay Later plan won’t save you money in the long term because you’ll still eventually have paid the full price for your purchase, but it can get you through a short-term tough time. Be aware, though, that late fees and damage to your credit lurk in the future if you don’t or can’t keep up with the installment payments.

That’s particularly dangerous if the ease with which you can get what you need or want with Buy Now, Pay Later plans tempts you to over-use them.

16. Designate “No Spend” Days/Weeks

Remember the snowball method for eliminating debt we mentioned earlier where we suggested you start by paying off the smallest of your debts and gradually work your way up through the bigger ones? The premise is that every time you eliminate even a tiny debt, it’s a little victory that motivates you to go after the larger wins.

A “No Spend” day or week works the same way. If you decide in advance that you won’t buy a single thing tomorrow and then stick to it, two things happen: 1. You save money for a day; and 2. You proved to yourself you can do it. The next time, it’ll be easier. Before you know it, those savings goals you set in Item No. 3 on this list won’t seem so out of reach.

Here’s a related suggestion: Use the 24-hour rule. When you see something you want, especially if it’s a fairly major purchase, make yourself put the impulse to buy it on the back burner for a day. Wait and see if you still think it’s a must-have 24 hours from now. You’ll be surprised sometimes at how your perception changes when it comes to spending that money.

Talk to a Professional About Saving Money

So, there you have it. Think you can do it now? We hope so.

But we know saving money is exponentially harder to do when you’re already wrestling with a mountain of debt. Credit cards. Mortgage. Car loan. Medical bills. That list can go on and on, so where do you start?

If that’s your situation, then by all means contact a professional credit counselor.

A counselor at a nonprofit credit counseling agency can talk you through some of these options in much greater detail, including how to create a budget and the pros and cons of debt elimination methods. A credit counselor will tailor his or her advice to your unique financial challenges with personalized recommendations to help you navigate a way forward. You can have that conversation over the phone, in person, or online.

And the best part is that there is no charge for a session with a counselor from a nonprofit credit counseling agency. You’re not spending any money on it!

About The Author

Robert Shaw

After a 45-year career in journalism, Robert's focus is helping consumers cope with personal finance issues. Finding solutions to paying off credit card debt, mortgage payments and that darn student loan, is far more fulfilling than explaining why the Cleveland Browns can't win (It's the quarterback!!). Robert wrote about the Browns and all Cleveland sports as a columnist at the Plain Dealer before transitioning to television sports commentary at WKYC. Now, his passion is helping people navigate their personal finances.


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