In a world where there are so many opportunities to spend,
saving money can be more difficult than it seems. Because everyone could use
some fresh ideas on how to save more, we've asked money bloggers and financial
experts for some of their best tips. This is the second in the series, so be
sure to check
out the first set of money-saving tips from the pros as well.
1. Creating a visual representation of the progress you're making toward your goals can help you stay motivated. Give yourself the satisfaction of notching small wins.
Heidi from Debt Free Charts explains how: "Make a visual chart that you color in as you save. Draw a simple outline of what you are saving for (a car, a house, even a piggy bank) and as your balance goes up, color it in. It's very encouraging to visually see how much progress you are making toward your goal, and you may even find yourself bumping up your savings so you can color in more."
2. Automating your
savings is a great way to take human error out of the money-saving equation.
When saving consistently, even small amounts add up over time.
Max from Max My Money takes it a step further, and recommends keeping your eyes off your money: "Automate your savings one day after you're paid. I encourage using an online savings account and automating your savings each and every month. And DON'T have the account linked to your Mint or Personal Capital accounts. The less you see, the less you want to spend."
3. Interest on debt is a very costly thing. Taking strides to eliminate or pare back debt—especially high interest debt—is a great way to lower your expenses and save more money over time.
Tawnya and Sebastian from Money Saved is Money Earned utilized this money-saving strategy: "When I [Tawnya] moved out of the dorms, I found myself getting $1,000 or more extra from my student loans each month, and instead of spending it, I put it towards the loan. This saved me between $10,000 and $15,000 over the next three years in loans I didn't have to repay, as well as interest. If you're not a student, you can still use this strategy. Making additional payments towards the principal of any debt that you currently have, whether it be a credit card or mortgage, could save you a lot of money in interest over time. We know it's difficult to make extra payments right after you buy a house, but making extra payments in the first five years of the loan gives you the biggest savings in interest."
4. When considering a purchase, think in terms of the hours worked to buy the item. Is this watch worth ten hours of work? Another tactic is to think about purchases in terms of opportunity cost.
RJ from The Ways to Wealth does just that. Here's how: "Whenever I go to buy something, I think in terms of opportunity cost. I ask myself, 'Is this the best possible use of my money?' It helps me to have a few default answers to avoid overthinking. For example, say you love to read books, which cost about $15 each. Now, say you're out to dinner trying to decide whether or not to get an appetizer, which also costs $15. So, the opportunity cost here is not just $15, it's a new book. On a larger scale, say you love to travel and a good trip costs you $600. Now, say you're trying to decide between two apartments. One apartment costs $100 more a month then the other. Thinking in terms of opportunity cost, the more expensive apartment cost[s] two trips a year. It's hard to objectively measure each and every purchase but by placing a value on what I buy relative to something tangible, it becomes a lot easier."
5. When job searching, consider your benefits package along with your salary. Although benefits like a 401(k) match or student loan repayment help aren't reflected in the salary number, they can be just as valuable in helping you save money.
Leigh Gross, VP of partnerships at CommonBond, emphasized the importance of benefits addressing student debt: "For most employees who are burdened with student debt, their top financial goal is to find the quickest way to pay [their loans] off. There are a growing number of employers who recognize this and are taking steps to help by contributing to their employees' student loan payments. These additional payments can shave years off of an employee's repayment term. If this is an important financial goal, it makes sense to seek out employers who are providing this type of assistance, in addition to exploring options like refinancing that can lower your interest rate."
Test out these new ideas to find out what works within your personal financial situation and jibes with your personality. Remember, if a strategy isn't working for you, you can just move on and try another. Like any goal worth achieving, saving money requires practice. Good luck!