Recently, someone asked me to list my top 10 favorite ways to save money. (I have a truly madcap social life, let me tell you.)
I don’t generally create lists like this, in part because money saving lists often seem to be pretty useless.
“Switch to single-ply toilet paper and save the difference!” one list will assert.
“Give up your car and move to North Dakota!” another will suggest.
The observant reader will notice that neither of these suggestions seem to be geared toward human beings with actual bills to pay.
I do have some sympathy for the writers of these lists, however, because it is very difficult to find new ways to save money. The basics of finance do not change, and yet we in the financial media landscape are tasked with repackaging the same old advice in SHINY NEW ways. This leads to some truly bizarre money-saving suggestions.
That’s why I hold myself to a three-pronged standard for money-saving advice. If I’m going to suggest ways to save money, I want my suggestions to meet three important requirements:
· Actionable—something you can try easily and soon
· Reasonable—something that doesn’t require a major change on your part
· Lucrative—something that saves enough money to make the effort worthwhile
Let me tell you, coming up with suggestions to fit those three requirements is not necessarily easy—but it is doable. Especially if you start with the assumption that personal finance is personal, meaning there is no one-size-fits-all list of suggestions that will work for everyone.
So, without further ado, I’d like to present my Letterman-style Top 10 list of my favorite ways to save money—and no saving pennies, uprooting your family, or commuting 25 miles to work via bicycle required:
1. Cut costs from easiest to hardest.
Just because every article says cut your latte and your streaming services doesn't mean you have to--especially if Starbucks and Stranger Things are what's keeping you sane. Cut the costs you are unlikely to miss before starting on the stuff that matters to your happiness.
2. Cancel unused services.
Everything is subscription based these days, and it can be easy to forget about that subscription you signed up for when it gave you a free trial--and forgot to cancel before it started charging you every month.
Go over your credit card and bank statements to identify any unnecessary or unused subscriptions and cancel them. No change to your life + more money in your monthly budget = a big win.
True story--even though I'm the “money expert,” I somehow missed the fact that I was paying for two New York Times subscriptions, under two different email addresses, for a full 8 months. That was a $160 oops on my part.
3. Negotiate your bills.
Many service providers are able to adjust your price if you just ask. Internet and cable providers, as well as cell phone providers, are generally eager to give price breaks to existing customers to keep them happy. Both of these types of providers will often offer introductory rates for new subscribers/customers, and asking to get the matching price can be a fruitful way to reduce your bill.
The trick with negotiation is to remind your providers of your loyalty, time your request for close to the end of your contract (when the provider is more desperate to hold onto you), and to make yourself someone the service rep wants to help.
4. Try a financial fast.
Coined by Michelle Singletary of The Washington Post, a financial fast is a period where you refrain from any spending except for necessities. Singletary recommends a 21-day fast, but even a week-long (or weekend-only) fast can help you kick-start your savings, figure out the holes in your budget, and find contentment with the things you own.
5. Create a spending file.
Instead of buying things right when you see them/think of them/want them, create a list of things you want that you revisit once a week or once a month. You will often find you are much less interested in them after some time has passed.
(This also pairs very well with a financial fast, since you're not saying "no" to yourself, but only "not yet.")
6. Delete saved payment information from your favorite retail websites.
The short period between wanting something and having to get up to find your wallet to type in your credit card number can be enough to let your more frugal nature prevail.
7. Join a Buy Nothing group.
The Buy Nothing project allows people to give and receive unwanted items hyperlocally.
In this group, you can offer items that you no longer want to neighbors, which helps keep still usable items out of the landfill, and take items off the hands of other neighbors.
You can also make specific requests for items on the site before you buy something. For example, I recently had a local teacher ask in my group if anyone had a bookshelf she could have. I had a lovely shelf that was collecting dust in my basement. She got a nice bookshelf for her new office for free, and I got free space in my basement.
8. Make saving money a game.
Create a graph of your spending or utility usage and try to lower your "score" each month from the month before. Give yourself a goal with a prize if you make it for the month.
Simply trying to spend less or use less energy is hard to remember or enjoy. But creating a game or challenge for yourself can make it fun.
9. Check your deductibles.
If you have a decent emergency fund, you may be able to reduce your insurance costs by raising your deductibles. If you consistently keep more than enough to pay the higher deductible in your emergency fund, then you can increase that deductible and lower your premiums--although you may want to send a portion of those savings to your emergency fund, just in case.
10. Increase your income.
Sometimes, the only way to stretch your budget is to make more money. But you don't have to get a raise, change jobs, or start driving for Uber to increase your income. If you regularly get a large tax refund each year, you can just adjust your withholding to immediately start seeing more money in each paycheck.
Here’s how to do it: Calculate your withholding allowances on the IRS.gov website, and use your corrected withholding to fill out a new W-4 form with your HR department.
Before you worry about the IRS sending a big auditor named Spike to break down your front door: This is perfectly legal!
In fact, recalculating and adjusting your withholding should be something you do anytime you have a life change (such as marriage, divorce, homeownership, or welcoming a child). But most people fill out their W-4 as part of the onboarding process when they are hired, and don't ever think about it again.
In short, you can make changes to your withholding because these allowances entered into your W-4 do not determine your tax bill. They only determine how much you have deducted from your paycheck in taxes each pay period. That means it’s perfectly legal to enter additional withholding allowances on your W-4, provided you only claim the correct number of allowances on your actual tax return. Just note that you will have a smaller (or non-existent) refund next year because of this.
But if you got the average 2022 refund of $3039, that means you can expect up to $250 back in your monthly paychecks after adjusting your withholding.
What money-saving tips have I missed?
What are your favorite ways to save money?