How to Save Money

Look at Your Spending Habits

Before you save, look at how you spend. That means everything from predictable bills to incidentals. Keep a journal for a month and write down every cent you spend, even if it’s just for a coffee or a toll pass fee. Then you can create a list of your expenses and see exactly where your money goes.

Quick Tip

You can also use Money Insight, offered to Ent Credit Union owner-members, to help you track your expenses.

When tracking your spending, don’t forget to include:

• Mortgage or rent payment
• Auto loan and vehicle maintenance
• Credit card payments
• Other loans (like student debt or personal loans)
• Utilities (such as electric, gas, and water)
• Phone, Internet, and cable or streaming services
• Food and household supplies
• Entertainment (movies, sports events)
• Dining (takeaway or restaurants)
• Healthcare costs (insurance, co-pays, gym membership, etc.)
• Personal purchases (in-store buys and online shopping)
• Gifts for family and friends (birthdays, anniversaries, and holidays)

If a list item jumps out at you as unreasonable, look for ways you can cut that expense down.

A household cash flow tracker, like the one below, can help.

Review Your Assets and Income

Take a good hard look at your earning power and current financial status. Is the balance in your savings accounts sufficient as an emergency fund? You should have enough savings at any one time to pay for three months of expenses if you are a dual-income household and six months of expenses if you are a single-income household. If you don’t, working towards that number can be the first of your savings goals.

If you’re spending less than you’re making every month, you’re on the right track. If you’re spending more, and letting credit cards take up the slack, it’s important to work towards getting out of debt and building better money habits. If you start saving money, you can reverse that trend and pay down your debt.

Create a Realistic Budget

To save money, you need a budget. Your income needs to be allocated to specific categories, and then you need to stick by your allocation. Put the “must have” items at the top of the list: you need a place to live, transportation, utilities and food. You also need to stay current on payments for your existing debt to maintain your credit score or rebuild it. Read our How to Budget article to learn more.

Find Ways to Cut Back

If you love to dine out, make it a special affair twice a month instead of several times a week. Look for cheap eats that can be made special by sharing them with a friend or significant other. If a special treat is a pricey coffee on the way to work, switch to making it a reward on Mondays and Fridays instead.

Take advantage of memberships and subscriptions that provide savings for you. Check your credit card and bank statements for recurring charges and get rid of things you don’t need or use, like gym memberships or monthly subscription boxes.

Don’t go cold turkey on comfort spending, however. That’s as likely to fail as a crash diet. Wean yourself off high-priced luxuries and replace them with lower-cost (but still enjoyable) substitutes.

Set Achievable Goals

Setting a savings goal provides you with the motivation to save. Two goals are even better; say you want to save around $10,000 this year towards a down payment on a house sometime in the future, and you also want a new TV that you estimate will cost $500.

For every thousand you save, put $50 towards the TV. That lets you have an immediate reward when you hit your goal. Then you can restart your saving for the next $10,000 with another small goal to boost you forward. Discover how easy it can be to set a savings goal by using the calculator below.

Automate Your Savings

The easiest way to save money is to have it come off the top of your income instead of out of your “spending money” left after the bills are paid. For example, if you’re paid by direct deposit, set up automatic transfers with your bank to take 15% of each new deposit and transfer it to a savings or money market account. You can also have a portion of your direct deposit go automatically into your savings or money market account to avoid having to set up an automatic transfer. This would be something you set up with your employer.

Have some extra cash left in your pocket even after implementing all of these savings tips? Give yourself permission to spend half of it if you save the other half. Even if it’s just $20 extra per month, it can put you that much closer to your goal. You can put extra money into an IRA to help boost your retirement savings.

Pay Down Your Debt

If you’re carrying debt, you need to find a balance between saving and paying off obligations. Debt allowed to sit and accumulate while you only pay the minimum due can cost thousands of dollars long-term in interest.

If you have high-interest debts, try to consolidate them into one loan and then pay extra towards the principal every month. You may have to work directly with your financial institution to ensure the payment is directed properly to cut down your debt amount, and not just applied as an “early payment.” 

As you pay off debts, you can take the money you no longer have to direct to each monthly payment and apply it to other debts until you are debt free. Then more money can go into your savings accounts each month, helping you reach your goals. Read our article, How to Get Out of Debt, to learn more.

Here’s how much loan consolidation can save you.

Negotiate Discounts

Sometimes all it takes to get a lower price is to ask. Some prime ways to take advantage of the power of asking include:

• Unexpected hospital bills. If your insurance denies payment, call the medical provider and ask for a cash payment price. You might be surprised at how much they will be willing to come down. However, this type of payment arrangement usually requires the full payment up-front, rather than in installments.
• Phone and internet service. Tired of continually rising costs for connectivity? Ask your service provider if there are any new specials available to you that can save you money each money. It doesn’t always work, but it is worth the call.
• Auto and home insurance. Talking to your agent about your need to cut costs will often allow a conversation about discounts on your premiums. Most agents would hate to lose an insured customer and will bend over backward to find ways to discount your premium.

These tips and tricks can help you save money and achieve your long-term goals. Even if you have to start small, you’ll be saving like a pro before long.