Written by Barry Choi
3 minute read
I’ll admit it, I really enjoy spending money. Knowing that I can treat myself to something with my hard earned money makes me feel good. That said, I’m well aware that if I spend too much, I could put myself in financial ruin, and that’s not something to get excited about.
Saving money isn’t as sexy as taking a vacation or getting the latest gadget, but it’s necessary if you’re ever looking to purchase a big ticket item. Let’s be honest, putting aside some money is the last thing on our minds as we go about our days. But, what if there were ways to save with no or very little work? These 10 easy tips will help you trick yourself into saving painlessly.
Put your change in a jar
Let’s start by going old school. One proven trick to save more money is by putting any change that you have into a jar. It may not be a lot of money, but $10 saved every month will be $120 which you can spend on a bigger ticket item at the end of the year, versus random things throughout the year.
If the idea of a jar sounds a bit dated for you, consider an app. Budgeting apps such as KOHO and Moka will automatically round up your purchases for you and set it aside, so you don’t need to worry about any loose change.
Automate your savings
Pay yourself first; that’s one of the golden rules of personal finance. Take that a step further by automating your savings. Simply set up automatic transfers to a savings or investment account so you don’t need to worry about it. If you schedule that transfer close to payday, you don’t even notice the difference on your pay stub. If you’re saving for multiple things such as a vacation, home or a new TV, set up separate automatic saving goals so you can see your progress.
Park your money in a high interest savings account
With monthly account fees, you’re literally paying your bank money to hold your money—that makes no sense. You’re better off parking any short-term funds that you have into a high interest savings account with an online bank where you’ll earn some interest. Admittedly, the rates aren’t exactly high these days, but digital banks still pay more than traditional banks. Every dollar counts so make your money work for you.
It’s impossible to save money if you’re currently in debt. Interest rates on most credit cards are around 20%, so make clearing off debt a priority. I recommend focusing on your highest interest debt first (usually your credit cards), so you’ll pay less interest in the long run. Alternatively, you could use a low interest credit as that would give you some immediate relief. You might need to make some sacrifices now, but trust me, it’ll be worth it when you become debt free.
Name your savings
By naming your various savings accounts, you’re more likely to only spend money on what you’ve designated it for. Create accounts for vacations, shopping, eating out, and anything else you spend on to keep you on track. Traditional banks will likely try to charge you for every additional account you open which is why you’re likely better off using a digital bank that has no fees.
Use a cash back credit card
Credit cards are a part of our daily lives, but are you using one that benefits you? A cash back credit card allows you to earn a fixed percent– usually 1 to 4%– on every dollar you spend. This is a great way to save money on everyday purchases. Keep in mind that when you’re paid out differs for each card. Some cards pay out once a year while others do it monthly. Of course, it’s only worth it if you’re paying off your full balance on time every month.
Think about where you grocery shop
Some grocery stores are more expensive than others— sometimes much more expensive. Most grocery chains have a premium branded store and stores that are geared towards those on a budget. By shopping at budget-friendly stores, you could save 10 to 20% for the exact same products. Another trick is to use Reebee since it’ll allow you to see what’s on sale at your local grocery stores. Use that info to price match and you could save big.
Use the second-hand economy
According to Kijiji’s Second-Hand Economy Index, Canadians earned an average of $961 per year through selling, and saved an average of $723 per year through buying in the second-hand economy. When you add up the savings, that’s nearly $1,700 you could put back in your bank account each year. You can also borrow items and tools you need punctually from a lending library, for a small annual subscription. Definitely some perks when you avoid buying everything new.
Save your raise / bonus / tax refund
Instead of spending any extra money, save it right away. Okay, you know what, it’s okay to spend 25% of it, but save the rest. By saving any extra money, you avoid lifestyle creep, which helps you build good saving habits for the long run.
Take advantage of employer benefits
If your employer offers to match retirement savings, has a pension plan, or a stock plan, sign up right away! That’s literally free money they’re offering, so find out what the details are and maximize your savings.
Saving doesn’t need to be difficult, what steps are you taking to save more money now?
About the author:
Barry Choi a personal finance and budget travel expert at Moneywehave.com. He has been quoted by media in Canada and the United States, including The Financial Post, The Toronto Star, Business Insider, The Globe and Mail, and has appeared on HuffPost Live.