What are the best money saving tips?
While you can focus on saving a coffee or takeout meal here and there, it might take you a long time to reach that end savings goal.
Especially if it’s a big financial goal like going on a vacation, buying a home, or getting out of debt!
What strategies are the most effective for saving money?
What’s going to save you the most money in a year for your time? Even if you have a low income? Or a tight budget?
Here are the best money saving tips for your future. The top 12 ways you can save money for maximum immediate and long-term savings.
I’ve personally used these. I’ve easily saved over $30,000/year with these methods. The savings only grow every year as I learn from experience and refine my approach.
12 Money Saving Tips
1. Optimize your money mindset
This is the most powerful strategy you can do!
To focus on savings, you need to shift your mindset about spending.
The best way to do this is through a No spend challenge where you don’t spend money over a certain period of time.
No spend challenge?
I know it sounds crazy! Painful! Why would you put yourself through this kind of discomfort?
Personally, I heard about the no spend challenge years ago.
I was interested, but kept putting it off because of Christmas or I was feeling exhausted and needed a treat… Any excuse you could think of – that was the excuse of the hour.
Until I went on maternity leave…
Our household income got cut in half…
And I HAD NO CHOICE but to do a no spend challenge.
Surprisingly, it’s not as difficult as you might think.
- I don’t need to spend money to eat well. Have fun. Get that occasional self-care I crave.
- I’m more handy than I think. I can fix that leaky bathtub faucet myself. I don’t need to hire a plumber.
- I have a lot of stuff with a lot of life left! It can also be repurposed! For example, if you have a plate or bowl that doesn’t match, you can put it under a planter that leaks water.
Here is my complete guide on the no spend challenge including:
- How you can get started
- What rules you should set
- How to successfully complete it
- What you should do at the end
2. Lower your overall debt interest rate
Ideally, you want to get rid of debt altogether, but in the meantime, lowering your debt interest rate is a must!
The first thing you should do is list out all of your outstanding debts and associated interest rates. This might include:
- Student loans
- Car loans
- Credit cards
Once you compare your interest rates, you can see how debt can be moved around to lower the overall interest you’re paying. Credit cards generally have the highest interest rates of 20-30% so you want to move away from these!
Work on transferring higher interest debt to lower interest debt, which might be:
1. Another credit card with an initial promotional period (usually 6 months) of 0% interest: It sounds crazy to transfer to a credit card. If you know you’ll be able to pay off the balance by the end of the promotional period, this might be a great option. It’s important to read the fine print. Understand if there are any hidden fees.
2. An unsecured line of credit: The difference between an unsecured and secured line of credit is that the secured line of credit is backed by an asset like a home or a car. If you don’t make payments, the bank can go after your asset. Unsecured lines of credit usually can have a higher interest rate of around 5%* vs. a secured line of credit.
3. A secured line of credit (e.g. a home equity line of credit (HELOC)): Secured lines of credit can have an interest rate of around 4.5%*.
4. Mortgage: Mortgages can have an interest rate of around 3.5%*. The disadvantage of going with a mortgage is that you often can’t pay off the outstanding loan until after a set period of time (e.g. 5 years).
*The interest rate will depend on the person’s credit history and situation.
3. Learn from personal finance experts
Many people can probably EVENTUALLY achieve their financial goals.
The FASTEST way is through applying best practices.
Learn from the personal finance experts who have already reached the goals you strive for. Read about their experiences. Challenges. Solutions.
You don’t want to waste time making their mistakes. You don’t want to miss opportunities.
Even just 1 personal finance book can change your life.
Imagine if you read 2 or more this month.
When I read Rich Dad Poor Dad, I learned how to use the appreciated value in my home to buy a rental property.
Now I earn regular rental income. This income stream has been crucial during my maternity leave when our household income was cut drastically.