Hey Bow Tie Nation, Joseph Hogue with the Let’s Talk Money channel here on YouTube and changing things up for today’s video.
Nation, you know I love talking investing and stocks but what’s the point if there’s nothing left to invest after paying your bills? A survey by Bankrate shows six-in-ten households wouldn’t be able to cover a $1,000 emergency expenses with savings.
The average family saves less than $100 a month. At that rate, you’d have just $61,000 invested over 20 years.
Now I don’t know what your financial goals are but $61,000 or about $200 a month income from that in retirement, I guess maybe if your goals are ramen noodles and government cheese.
So I want to show you seven ways to save money, seven savings tips I used myself to save almost $500 a month. I’ll reveal each hack, how much I saved and I guarantee these will put extra money back in your pocket.
I’ll also show you three rules you can use to save even more money at the end of the video. Three rules to follow for making your own money saving tips so make sure you catch those.
Turn Saving Money into Financial Freedom
And if $500 a month doesn’t seem like much, take a look at what that becomes over 20 years. At that same return on stocks, saving just $500 a month turns into almost $307,000…that’s nearly twice the median $170,000 people have saved by the time they reach 60 and you can do it in just two decades.
Nation, this is the TRUE path to financial freedom! It’s not finding the next hot stock or getting that lucky lottery ticket, it’s this regular saving and investing that adds up to make you rich!
7 Best Money Savings Tips
So towards the end of last year, I noticed our expenses were really getting out of hand. Diana had started working as a Nurse and I was busy with the online business so that tight schedule meant we started blowing the budget. Even though we were making more money, we still weren’t able to reach those savings goals and we really had to make a mindset change from “can we afford this” to “should we afford this”.
That’s where a lot of these money savings tips are going to come from, finding those little savings hacks here and there that while maybe you can afford them, cutting them out of your budget is really going to add up to money in your pocket.
First here is to set up automatic withdrawals and a savings plan.
This is actually going to be two ways to save money in one because we’ll talk about how automatic withdrawals help keep your budget and then the easiest savings tool I use.
So first is you can either through your employer or through your bank, have your paycheck automatically split up the second it hits your account. Maybe you say send 10% to an investment account and savings, 5% to fun money and the rest to an account you use to pay the bills.
This makes it so much easier to budget because you already have that money coming out for saving and a little for yourself. Then if that bill paying account is going to be short, it forces you to cut some of your spending.
You see, the biggest reason why people don’t save is because they don’t have to. If your bills come out to matching your income then there’s no motivation to cut spending because you don’t have to. The problem of course is that you never save any money and we’re right back to cup o’ ramen and social security in retirement.
How to Make Saving Money Automatic
Another way to do this, and I love this as a way to trick yourself into saving is using the Acorns app. The app works on a couple of different levels. First, you link up your credit or debit cards to the app. Whenever you use those cards, the app is going to round up your purchase to the nearest dollar and invest the difference.
For example, that $3.60 cup of coffee would be rounded up to $4 and the $0.40 would go into your investment account.
Even better though, the app automatically invests the money across a group of low-cost funds and you pay nothing for the funds. The app charges a dollar a month on accounts under five grand or just 0.25% for accounts over that amount.
A recent survey on consumer payment methods found the average American runs up $1,760 a month on credit cards and another $860 on debit. In fact, consumers preferred using credit over debit cards or any other form by two-to-one.
That means, if you’re using your card maybe 30 times a month and the app rounds up to transfer just $0.36 each time, that’s $10.80 you’re saving a month that you won’t even miss.
Saving Money on Streaming Services
Another money saving tip, and this one totally snuck up on us, is the cost of streaming services.
All these streaming services are coming out and it seems like a great idea. Cut the cable cord, save some money and still get your favorite shows.
The problem is, you have to pay for one service for some shows, then another show comes out on another service so you pay for that one and then you want movies so you get another service. It got to where we were paying almost $26 a month for three streaming packages; Disney-plus, Netflix and Hulu and not really saving anything.
Now you can save money with these but you really have to ask yourself, which one do I need and which are just going to keep me vegetating in front of the TV needlessly?
So because my wife and I are huge Marvel nerds, we kept Disney+ but dropped Netflix and Hulu for a savings of $18.98 per month bringing our total so far to $29.78 in monthly savings.
We’ve still got five more ways to save money but I want to throw this out to you in the Nation as well. What are your favorite money saving tips? So scroll down and tell us in the comments, what are the little things you do to save big money?
How to Save Money on Vacations
Next on the list for us was making smarter, budget vacations.
This was kind of a forced one for us. When it was just me and Diana, we could go to Vegas for a week or New York. Even when our son came along, it got a little more expensive but vacations were still manageable.
After adopting our daughter though last year, that’s four tickets we have to buy, four mouths to feed and it was really adding up!
So we switched to less expensive vacation ideas like staycations or the less trendy cities close to home. Our camping trip late last year cost just $1,500 instead of the $3,500 we spent for Disney World the year before. That saved us two grand or an extra $167 a month.
Next here, and this is a totally unique idea, but unfollowing certain people on social media.
You probably already have an idea of who these people are, right? They’re always advertising something or showing off their new toys. Whether they’re being sponsored to show those products or just want to brag, they make you feel like you need to go out and spend, right?
Social media is becoming the 21st century’s answer to keeping up with the joneses and it’s killing your budget!
So I ended up unfollowing about 30 social media accounts and it’s hard to put a dollar-figure savings on this because it’s all those impulse purchases you don’t realize but I’d estimate we saved at least another $25 a month on this one.
Saving Money on Date Night
This next savings tip is probably my favorite because it not only saves money but will save your marriage, not going to the movies for date night.
I never liked movies for dates when I was single either. I mean, how much sense does it make if all you can do is sit there silently for two hours…unless you’re doing something else.
Even married though, it’s just too easy to go to a movie and call that date night but is that really helping you keep your relationship fresh? The average ticket cost hit a record last year at $9.26 and add in another $13 for concessions and it was costing us about $31.52 twice a month to sit in a dark room with a bunch of strangers.
So cutting that out and actually doing something where we could talk saved us an extra $63.04 a month.
Saving Money on Food
This next money saving tip is one of the biggest, taking my lunch to work instead of eating out.
This is one you hear about a lot but it’s just so easy to go out for lunch that it costs sooo much money!
I started working out of an office earlier this year and some weeks would go out for lunch every single day. Because I couldn’t get my lazy ass out of bed early enough to pack a lunch, I was spending upwards of $11 a day to eat out.
What’s worse is the Bureau of Labor Statistics estimates eating out is actually getting even more expensive. The cost to eating out is increasing by about 3% a year while grocery prices are increasing by less than 1% a year.
According to the Wellio app, it costs about $4 a meal to bag your lunch so cutting back to eating out just once a week saved us $28 a week or $121 a month.
This next hack before those three rules to saving more money is related to the last, no bottled water or beverages outside the house.
This is another one of those expenses that really sneaks up on you. I was buying just one cup of coffee in the morning and a juice at the gym three times a week…and it was costing almost a hundred bucks a month!
Instead, I fill up a 32 ounce thermos for coffee for work and take 16 ounce sports bottle of juice to the gym.
It costs just $0.27 a cup for home-brewed coffee versus the $3.25 I was spending at Starbucks including tip for a saving of $14.90 a week. Buying a gallon of juice for $4.58 lasts me two weeks and saves $4.26 a week for a total saving of $83 a month.
Biggest Savings Tips to Get the Most from Your Budget
That’s almost $500 and just from those seven money saving tips. Now I want to reveal three rules you can use to save even more money, to create your own ways to save money.
First is to focus on the big expenses like housing, transportation and food. The Department of Labor’s Consumer Expenditures survey shows more than half our spending, 52% and an average of $29,000 a year, goes to just these three areas.
So looking for ways to cut from these three; housing, transportation or food is where you’re going to really add to your savings.
You can also use these money saving ideas with a savings goal to get the most out of each.
This can be as simple as trying to save $10 dollars more each month. The increased saving is so small that it’ll be easier to reach but will give you that momentum to be saving hundreds more a year.
Another trick here, and I love these, doing a one-month spending challenge.
There are a couple of ways to you can run these and they work so well. The traditional way is you try cutting your spending to the bone for a month but I like another strategy better. My strategy is, I cut out one thing for an entire month. So maybe it’s eating out or we cancel our streaming service for a month. It’s only a month so it’s super easy to make it through but you’d be surprised how many expenses you realize you didn’t really miss. We’ve had a few regular expenses that, after the month, we never went back to spending as much on them.
Saving money doesn't have to mean sacrifice and just a few changes to your routine can save thousands a month. Use these seven money saving tips to keep more money in your pocket and create that financial future you deserve.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.