February 20, 2023
Sometimes saving money feels harder than earning it. But that doesn’t mean it’s impossible. If the little things like skipping that morning coffee run aren’t helping you meet your savings goals, it might be time for a bigger change. From mindset adjustments to opting out of some comforts, these six lifestyle changes can help you grow your savings faster.
When you’re purchasing something on sale, it’s helpful to view your potential savings in dollars instead of percentages, because the same percentage discount can lead to different dollar savings depending on the items. For instance, saving 5% on a $10,000 car is much different than saving 5% on a $20 shirt — you would save $500 on the car as opposed to just $1 on the shirt.
When you understand this principle, you can start focusing on finding discounts on expensive items that could save you hundreds of dollars instead of prioritizing discounts on cheaper products that would only save you nickels and dimes.
To understand the true cost of periodic payments, it’s important to convert them to a larger time frame, such as a year or more. Because while the cost of a single payment might not seem like a big deal, the total cost over that larger time frame is generally much more significant. For instance, a $100 monthly internet bill can seem low each time you pay. But the total annual cost is $1,200. Alternatively, an $80 monthly internet bill might not seem like much of a difference each month, but you’ll end up saving $240 annually.
Similarly, saving an extra $150 on rent each month saves you $1,800 over the course of a year. And saving $10 per month on your streaming subscriptions will save you $120 annually. So when you’re trying to save, it’s good practice to consider the long-term impact of your periodic payments and make decisions about them accordingly.
Everyone needs to eat. But you probably don’t need to eat out as much as you do — even if you feel like you finally have McDonald’s money. As parents like to say, “There’s food at home.”
Food is the third largest expense for the average American, right after housing and transportation. Groceries, however, are only part of this expense. Between fast food, fancy restaurants, takeout spots, and food ordering services (i.e., Doordash, Uber Eats, GrubHub), most people actually spend more on eating out. In fact, since 2022, the average American spends over $120 eating out for every $100 they spend on groceries.
This makes for a big savings opportunity. You can save an average of about $12 every time you cook your own meal at home instead of ordering out. So if you, like the average person, currently eat out multiple times a week, you could easily save hundreds if not thousands of dollars per year by cooking all your meals at home.
Notably, this doesn’t mean you should never go out to eat — it’s important to treat yourself every now and then. If you want to maximize your savings, however, buying and cooking your own food is an excellent practice to adopt.
Your cost of living includes the housing, transportation, health care, and other basic expenses needed to maintain your lifestyle. As such, your cost of living is largely influenced by where you live. So because lowering your cost of living can often involve moving, it may be a more drastic measure. But that doesn’t mean it isn’t effective.
Changing where you live can help lead to huge savings — hundreds if not thousands of dollars per month. And it doesn’t necessarily mean moving back in with your parents. If you don’t need that two-bedroom apartment, consider moving to a cheaper one-bedroom unit. If you want to save even more money, you could also consider moving to a different city with a lower cost of living (not just in terms of housing, but transportation and other basic costs, too).
Buying used items instead of new ones is an excellent and easy way to save money. Between Amazon, GameStop, thrift stores, and other outlets, you can find a used version of almost any product. And purchasing those can save you hundreds of dollars — over time or, for traditionally expensive items like a gaming console, all at once.
Many consumers worry that used items won’t work properly. But people often get rid of appliances and other products simply for aesthetic reasons, or because they want an upgrade. In these instances, the item works perfectly fine, but the owners still want to discard it. Still hesitant? Consider buying refurbished! Refurbished products are used items that have been expertly restored and tested by the original manufacturer or a qualified third party, so you can be confident that they’ll work. And while refurbished products may be more expensive than other used items, they can still save you a lot of money.
Cars are a large expense outright, and they lead to additional expenses. As long as you have a car, you’ll also have to spend money on gas (or a home electric vehicle charger), repairs, and routine maintenance, such as oil changes and new tires. These expenses add up quickly! So it’s not an understatement to say that ditching the car can help you save thousands of dollars within a single year. Of course, this won’t be a feasible option for everyone. But if you live in an area where you can get by with public transportation, walking, or biking, it may be worth considering.
Alternatively, if cars are a necessity where you live, you could downgrade your current vehicle. The average monthly payment for a new car is over $200 more than the average used car payment. Similarly, even if they’re both new, the average monthly payment for the newest model of a car will be more than the average payment for the previous year’s model — meaning you could potentially get a new car fresh off the lot that costs less than your current vehicle. So unless you’ve already paid off your car, a vehicle downgrade can be a quick and easy way to save thousands of dollars each year. And if the car you switch to is more fuel-efficient than your old one, you could save even more.
Every dollar counts when it comes to saving. So if you want to increase the dollars you put in savings, you’ll need to make a change. And it’s these bigger lifestyle changes that lead to bigger changes in your financial life. Some of the changes outlined above may be a perfect fit for you. Others might not be. That’s OK! Not every change is for every person. Simply make the changes that work best for you and watch your savings skyrocket.
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