Here’s How to Start Saving Money — Even If You Don’t Have Room in Your Budget

Albert Bell models opposing footwear in downtown Atlanta.
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I won’t sugarcoat it: Saving money isn’t the easiest task.

But I’m here to tell you it’s possible to save money without living off ramen, without recruiting seven roommates and without giving up all of life’s pleasures.

How?

First, implement a strategy. Take a good look at your expenses, and create a budget. Second, cut back your spending.

Ready to get started? Here’s your guide to saving money in 2019.

Table of Contents:

Prepare to Start Saving

Set yourself up for success by tracking your fixed and discretionary spending, setting short- and long-term goals, creating a budget and storing your savings where it’ll grow.

Not sure where to start? Without a plan, it’s easy to become overwhelmed and frustrated.

Don’t worry. Just follow these steps — one at a time, please! — and you’ll discover the money-saving journey isn’t so bad, even if you are on a tight budget.

1. Track Your Expenses

Before anything else, you’ll need to take a look at how much money you’ve spent in the past few months. No, it might not be pretty, but you need to see this so you can identify your problem areas.

Instead of combing through your bank statements, use the Empower app to automate the process for you.

Empower can help you figure out how you’re spending your money and develop a budgeting plan to keep you on track.

Use its fee-free banking account or link to your existing ones, and it will keep track of your spending. It will also categorize your spending, so you can see exactly where you’re overdoing it.

2. Set Short-Term and Long-Term Savings Goals

Now that you have an overview of your spending habits, it’s time to set some realistic short-term and long-term savings goals.

Here’s the difference:

  • Implement a short-term savings goal when you need to save money fast. Maybe you’re saving $200 for a plane ticket home. You could also start an emergency fund and set a short-term target of $500 in three months.
  • If you have a loftier goal, commit to a long-term savings plan. A few examples include saving for a down payment on a home or a college fund for the kids. If you’re looking really long term, think about retirement.

It’s important to have both goals in place, so you enjoy the now while planning for the future.

3. Create a Budget

Personal finance 101: With your savings goals in mind, take a look at your spending. Set some limits for yourself.

The key? Be realistic. If you spend $500 a month on groceries, don’t set your new food budget to $200. That will require an entire lifestyle change.

If you’re not sure where to start, find some structure with these two popular methods:

  • The 50/20/30 budgeting method breaks your expenses into percentages: 50% for living, 20% for financial goals and 30% for personal spending. People like this plan because it offers some built-in flexibility with personal spending.
  • The 60/20/20 budgeting method also breaks down your expenses into percentages. In this case, 60% of your income is for lifestyle expenses (food, water, shelter — your needs), 20% is for discretionary spending (fun money) and 20% is for saving. Financial advisers recommend this plan, because it prioritizes your needs over your wants.

Creating and sticking to a budget takes some finessing, so be patient with yourself.

4. Be Smart About Where You Stash Your Savings

Where are you going to keep the money you’re saving? Consider some options that’ll yield interest or returns, so your money isn’t sitting stagnant.

Here are a few ideas:

  • A high-yield savings account allows you to easily access your savings while also earning some interest. I suggest finding an account that offers 2% APY or higher. It’s great for an emergency fund or vacation stash.
  • A certificate of deposit (CD) will earn you higher interest. However, CDs have fixed maturity rates. That means if you put your money into a five-year CD, you can’t access it early, or you could face penalties and fees. You also can’t add money to a CD.
  • Stocks and bonds are two popular ways to invest. Both are ideal for long-term goals, like retirement savings. Stocks carry a higher risk, and you could potentially lose money. However, if you’re willing to ride out the market’s ups and downs through the years, it could pay off. Bonds tend to be lower risk — but so are the returns. As a general rule of thumb, the younger you are, the more risk you can afford.

21 Ways to Cut Your Expenses and Save Money

OK, OK. Enough talking about it. It’s time to save. One way to get the ball rolling? Find ways to cut your expenses.

Ways to Save Money on Monthly Bills

Thought you couldn’t escape those monthly bills? You can’t, really, but you can find ways to save money.

1. Switch to a Fee-Free Banking Account

Hands hold an Aspiration debit in a urban city setting
Aileen Perilla/ The Penny Hoarder

If you overdraft about once a month, you’re handing over an average $360 in fees each year, according to the Consumer Financial Protection Bureau. That’s in overdraft fees alone.

Your best bet is to ditch your fee-heavy bank account and find something that promises to never charge you fees. Use this list of best free checking accounts to get started.

2. Save Money on Your Student Loan Debt

More than 43 million Americans hold nearly $1.5 trillion in student loan debt, according to the U.S. Department of Education.

We’re not totally helpless, though. Here’s a trick that’ll help you save money on your debt and potentially pay it off even faster: Try getting a lower interest rate on your federal and private loans by refinancing.

What’s that mean? It means you’re replacing your current loan (or loans) with one that has better (lower!) interest rates.

You can search for better rates through the online marketplace Credible.

It might seem like a small difference now, but a lower interest rate saves a lot of money over time. It’s helping grad Ashley Williams save more than $18,000 in interest over the life of her loan.

3. Get a Lower Interest Rate on Your Credit Card Debt

The average credit card carries an interest rate north of 15%, according a Consumer Financial Protection Bureau analysis. That makes it difficult to chip away at what you actually owe, your principal.

The solution? Refinance (or pay off) your credit card debt with a lower-interest personal loan. This will alleviate those high credit card interest rates, so you can instead pay down that personal loan without as much interest getting in the way.

A good resource is Fiona, a search engine that can help match you with the right personal loan to meet your needs.

Pro Tip

Debt consolidation simplifies your monthly payments and can lower your interest rate, saving you thousands of dollars over the years.

Fiona searches the top online lenders to match you with a personalized loan offer in less than 60 seconds. If your credit score is at least 620, its platform can help you borrow up to $100,000 (no collateral needed) with fixed rates starting at 4.99% and terms from 24 to 84 months.

4. Cut the Cord (or at Least the Price)

If your cable bill is entirely too high, consider cutting it and opting for a streaming service or two.

If you’re not keen on cutting the cord? You can still find savings.

The negotiation bot Trim will negotiate your cable or internet bills down for you.

It works with Comcast, Time Warner, Charter and other major providers.

You can sign up simply with Facebook or your email address. Then, upload a PDF of your most recent bill, and Trim’s AI-powered system gets to work. If at first it doesn’t succeed, it’ll keep negotiating until it can save you some money.

Also, if you have any outages, Trim believes you deserve a credit, and it’ll handle that for you. Trim takes 33% of the savings tab, and you get the rest.

5. Cancel Those Sneaky Subscriptions

In the days of the internet and impulse subscriptions, it’s easy to lose track of products and services you’ve opted into. (Ahem, that long-forgotten gym membership?)

Thankfully, an app called Truebill can track all your automated transactions and provide a simple way for you to see, manage and cancel those recurring charges.

6. Switch Cell Phone Providers

Woman talking on phone
Carmen Mandato/ The Penny Hoarder

Think anything outside the “Big Four” cell phone carriers will be unreliable? You might be surprised. Check out these six affordable cell phone plans.

7. Find a Lower Car Insurance Rate

Just like you compare the prices of flights, shoes and laptops before purchasing, why not compare car insurance? You might be missing out on a ton of savings by settling.

The Zebra, an online car insurance search engine that offers “insurance in black and white,” compares your options from 204 providers in less than 60 seconds.

Artie Januario managed to knock off about $30 a month — a $360 yearly savings.

8. Perform a Home Energy Audit

If your utility bills are out of control, consider an energy audit. This in-home assessment will help make your house as energy efficient as possible.

The average U.S. household spends $5,550 a year on energy. Energy-efficient appliances, home improvements and actions every day can save hundreds of dollars. –Alliance to Save Energy

Some utility companies offer the service for free, but they might try to upsell you products and services. Instead, you can perform your own energy audit; follow these simple DIY measures.

9. Hunt Down Energy Vampires

Those sneaky energy vampires — the devices that suck away energy even when you’re not using them — can make up as much as 20% of your monthly electric bill, according to Duke Energy.

Turn any corner, and you’re likely to find a vampire. Your coffee maker, your cable box, your phone charger. Once you identify these lurkers, simply unplug them when not in use.

Pro tip: Invest in a few power strips. Rather than roving around your house and unplugging each device, plug everything into a strip and flip one switch when you’re ready to kill… the vampires.

Ways to Save Money on Groceries and Food

Aside from rent or monthly mortgage payments, food probably tops your list of monthly expenses. And you’re right: Food is an essential. However, you can probably cut back. After all, five wedges of exotic cheese aren’t exactly essential. (Just one.)

10. Use a Shopping List

Woman grocery shopping
gilaxia/Getty Images

Create a weekly meal plan before you go grocery shopping to stay focused on what you actually need.

Keep your shopping list stored in your phone’s notes app. This allows you to add items throughout the week and move them around, according to their location in the store. (Stay focused!) Shopping for a full house? Share your notes with family members so they can add to the list.

11. Earn Cash Back on Your Purchases

Tired of clipping coupons? Save money instead by taking photos of your receipts.

Search for cash-back eligible items on your shopping list within the Ibotta app before you head to the store. When you get home, snap a photo of your receipt, and scan the items’ barcodes.

Some cash-back opportunities I’ve seen include:

  • 25 cents back for any brand of bread.
  • $2.50 back on Dunkin’ coffee canister.
  • 75 cents back on Tide laundry detergent pods.

The app is free to download, and you’ll get a $10 sign-up bonus after uploading your first receipt.

12. Shop Seasonally and Locally

Shopping at your local farmers market can save you a crop of money on your grocery bill, because the items are often in season and local — no shipping or international freight fees involved.

If you don’t have a farmers market in your area, you can still shop seasonally in your grocery store. For example, avoid buying that $6 carton of strawberries in November. Instead, purchase strawberries in peak season — between May and August, depending on where you live.

13. Change Grocery Stores

Grocery store loyalty runs deep. When was the last time you gave another store a chance? Penny Hoarder Kelly Smith always loved Winn-Dixie, but she checked out Trader Joe’s and calculated a $57 monthly savings. That’s nearly $680 a year.

Pro Tip

To do your own grocery comparison, travel to several stores in your area, locate your staples, record their prices and compare costs to find the best place to shop for each item.

If you want to get really technical, fill out a grocery comparison chart so you can see which store in your area has the best prices for the items you frequently buy.

14. Remember: Store Brand Isn’t Always Cheaper

We’ve been trained to think the store brand — or the generic brand — is cheaper. And a lot of times it is… if you’re solely considering the shelf price. But name-brand foods typically qualify for more coupons, members-only discounts or rebates through cash-back apps.

Do the math before you instinctually grab the store brand.

15. Pack Your Lunch

Lunch box with chicken salad sandwiches and carrot sticks
iuliia_n/Getty Images

It’s tempting to ditch your brown-bag lunch and opt for fast food during the work week, but this habit will quickly drain your monthly food budget.

Instead, stick to those packed lunches. If you need to, search Pinterest for more creative on-the-go meals.

16. Avoid Takeout

Takeout or delivery is convenient, so if you need a break from the kitchen, allow yourself a break once a week.

You can opt to dine out for maximized relaxation and to avoid takeout and delivery fees. Or, if you have a crying kid on each hip, then order delivery. Instead of calling in your order, place an order online or within the restaurant’s app, where you can easily apply a coupon code. Don’t have one? No problem — RetailMeNot is a great place to find up-to-date promo codes.

For example, I just found a 30% off coupon code for Papa John’s. Simple!

Ways to Save Money on Shopping and Entertainment

Up until this point, I’ve talked about the best ways to save money on the essentials. Now let’s have a little fun… without overspending.

17. Practice the 30-Day Rule

Next time you’re out and about and spot the PERFECT jean jacket you HAVE to have RIGHT NOW, hit pause… for 30 days. The 30-Day Rule is a simple practice to help you resist impulse buys like this.

Pro Tip

Whenever you feel the urge to splurge, force yourself to wait 30 days. If, at the end of a month, the urge is still there, consider purchasing it.

Here’s how it works: When you get home from the store, write down the day’s date, the name of the item, the price, and the store, explains J.D. Roth at Get Rich Slowly. Pin the note somewhere you’ll see it. At the end of the 30 days, evaluate your feelings. If you still want the item and can afford to pay for it outright, go ahead.

18. Get to Know Stores’ Price-Match Policies

Many stores — stores you probably shop at — have price-match policies. That means if an item you’ve purchased drops in price within a specific timeframe, you can request a refund for the difference.

To keep track of these easily, use Paribus — a tool that gets you money back for your online purchases. It’s free to sign up, and once you do, it will scan your email for any receipts. If it discovers you’ve purchased something from one of its monitored retailers, it will track the item’s price and help you get a refund when there’s a price drop.

Plus, if your guaranteed shipment shows up late, Paribus will help you get compensated.

Disclosure: Paribus compensates us when you sign up using the links we provide.

19. Hit up Consignment Shops

When’s the last time you ventured into your local consignment shop? You might be surprised by what you find. Designer jeans for $18? Yes, please!

Heck, you might even find some items to purchase and resell for a profit.

20. Find Free Weekend Activities

Woman looking at art in a gallery
PeopleImages/Getty Images

It’s easy to get sucked into spending money on weekend outings, but there are plenty of free activities happening in your area.

Nab some inspiration from these free things to do in Orlando. Chances are, you can search your local newspaper, magazine or website for ideas.

21. Take Advantage of Your Public Library

Did you know your local library is a treasure trove of freebies? Yup — take a look at some of these unexpected library freebies, including free museum passes, board games and musical instruments.

Ready to Save Money?

Saving money doesn’t have to be doom and gloom. Celebrate your successes along the way, forgive yourself for your mistakes and stay persistent.

Your hard work will pay off in the long run; I promise.

Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder. Remember that one time she wrote up a list of 353 ways to save money?