Whether you’re looking to free up money for a rainy day, retirement, or even financial independence, these tips are a great starting point for learning how to save!
Are they all easy? Ok, I may have lied slightly… but I wanted to make the list pretty comprehensive! Regardless of whether you’re a seasoned expert or someone just starting out on their savings journey, there’s probably something for you to learn in this giant list! 🙂
Here’s the table of contents so you don’t get lost:
- Living with less… but still being happy
- Housing
- Transportation
- Food
- Healthcare
- Entertainment
- Buy smart
- Be your own insurance company
- Look for places to snowball your savings
- Other random tips
- Conclusion
Fair warning: many of these tips might seem crazy. You might scoff at the idea of living in a smaller house, or selling your car, or curtailing your spending habits. Your nice stuff is what makes your life tolerable! …Right?
Living with less… but still being happy
What if I told you that you don’t actually enjoy stuff that much? Because guess what: you probably don’t. The human brain acclimates to its surroundings. You might love that brand new sports car, fancy dress, or $2000 laptop for a few months, but eventually, you’ll just get used to it. It’ll seem normal. You won’t fully appreciate it. It’s a phenomenon known as the hedonic treadmill. You keep buying more and more, but you never actually end up anywhere!
Fortunately, acclimatization works the other way as well. You might think that you would be sad to have to drive around in a used Corolla. But again, you get used to it! You learn to stop caring as much. And even if you still end up a little disappointed, the extra savings will be worth it, because you can spend the money on things that actually matter instead, such as:
- Fulfilling your dream of scuba diving
- Funding your child’s college tuition
- Retiring 5 years earlier
Yes, that’s right, you can retire years earlier if you can reel in your spending. Yes, even on a middle-class income or below. As it turns out, saving just $300 per month can add up to over a million dollars after 40 years. Skeptical? Don’t be. I have a whole blog post about it here:
TODO LINK
$300 might sound like a lot, but it doesn’t have to be all at once! For many, all it takes is trimming a little here and there, and you’ll be there before you know it. And if you really can’t find $300 to trim, well, something is better than nothing! The other advice I have for you would simply be to try and avoid lifestyle inflation.
Avoiding Lifestyle Inflation
Lifestyle inflation or lifestyle creep is when you start spending more as soon as you start making more. Eventually, you’ll probably get a raise or a better job. And when you do, you will be tempted to start eating out more, buying nicer clothes, and renting bigger houses. Resist the urge! Cutting back on your spending later is a lot harder than simply being frugal in the first place. Once you inflate, it’s hard to go back!
Now, I’m not saying that you can’t increase your spending ever. There are perfectly fine reasons to. For example, if you were living off of dried ramen noodles, then by all means, start buying some healthier food. If your house is filled with rats and mold, then sure, move on out of there. If you want to have kids, then yeah, it’s ok to buy baby clothes. And naturally, you’ll also need to spend more over time due to inflation!
The point is, you shouldn’t just start buying things “because you can afford it” or “because it would be nice“. You should have a good reason. Ideally, your reason should be to solve a specific problem in your life. If you don’t have any right now, then great, time to start saving more! Though life is short, so it’s also fine to spend a little bit just for you. You’re worth it! So if you want a rule of thumb, how about this:
Whenever you get a raise, save at least half of it.
One tip that you can use to cut back on impulse spending is to put everything you want to buy on a list. Instead of purchasing the item immediately, it has to stay on the list for 30 days. Look at the pictures, research it, imagine yourself on a yacht with it, whatever. Just no buying! If you still feel strongly about it after 30 days, then you can consider buying it. But you may find that just adding the item to the list satiated your “shopping hunger” and that you no longer feel the need to actually follow through with the purchase after a month.
Trimming back
What about if your lifestyle has already inflated though? Or maybe you’ve been living paycheck-to-paycheck and need to build up some emergency savings? Well then you’re left with the tough task of cutting back. But what to cut? Where to start?
You can see that American households spend on average about 23% of their income on housing/utilities, 14% on cars, and 13% on food. Add all that together, and that’s fully half of your budget right there! So what that means is that if you focus on trimming spending in these 3 areas, you’ll have the most to gain. So let’s get to it!
Note: Most of these tips will be aimed at middle-class Americans. For those who are really just barely scraping by, you’re probably already familiar with most of these tips out of necessity.
Housing
- Get the cheapest/smallest place that you’re comfortable with. Not only will it be cheaper, but you’ll have less to clean, and less space to fill with unnecessary crap! Note that even if a place doesn’t seem “great” when touring it, you’ll get used to most things. Obviously, it’s fine to avoid specific red flags, such as structural or pest issues. But don’t pass over a great deal just because it has dated wallpaper or a cramped bathroom!
- Consider renting instead of owning. Contrary to popular belief, owning a home is actually not always a good investment, unless you’re very lucky with a rising housing market and the ability to sell at the top. And even if you do think you’re going to be lucky, many owners simply can’t resist the temptation to renovate, which is NOT cheap.
- Keep your utility bills low!
- Keep heat/AC down a few degrees and just bundle up or wear a wet t-shirt.
- Add some insulation to your house. Yes, you can do this even if you’re renting! Insulating window covers can be surprisingly effective.
- Plant trees! Deciduous ones will shade your house with their leaves in summer, while letting the warming sunshine in throughout winter.
- In summer, open your windows at night to cool down your house, minimizing AC costs during the day! Opening windows on multiple sides of your house will help create a cross breeze, and box fans can accelerate the process too.
- Swap out old/inefficient devices and lights for better ones.
- Do repairs yourself. It’s often surprisingly easy to fix your own dryer or recaulk a bathtub. There’s a YouTube tutorial for everything. You’ll save money, you’ll learn a new skill, and you won’t have to worry about tracking down a decent contractor!
- Skip unnecessary repairs/renovations. It’s even cheaper than repairing something yourself! Broken burner on your range? Just don’t use that one. Frayed cord on your blinds? Eh, you just have to hold it a certain way now. You get the idea.
- Consider getting housemates! This one seems crazy, but it’s one of the most important things you can do to save money on your housing. Living with roommates can easily reduce your housing costs by 50% or more, and that’s not even counting the social benefits! If you’re curious about the idea, check out our entire article on the topic:
Transportation
If you get around by walking or biking, there’s honestly not much you can usually do to trim down. Sure, heavy transit users could at least consider upgrading to a monthly or yearly pass rather than paying for individual trips, if the math works out in their favor. But for most people, the bulk of transportation costs are going to be from cars. And as it turns out, cars are really freaking expensive! Luckily, there are tons of ways to save money on them. Here are my main tips:
- Get a reliable car
- Get it used
- Get only what you need
- Keep it for as long as you can
- Drive safely
- Do repairs yourself
- Keep up with routine maintenance
- Don’t report small damages to your insurance company
- Get less insurance (of the unnecessary kind)
- Skip unnecessary repairs
- Drive less often
- Share it with others
And for more details on all of the above tips, I have a whole article:
But honestly, by far the biggest way to save money here is to simply get rid of your car entirely. I know it sounds crazy, but you should at least consider it! If you’re a two-car household, see if you can get by on just one. And if you only have one, just think about how much money you could save by going entirely car-free.
Here’s a hint: It could be in the $100,000+ range. And again, I have a whole article on the topic of going car-free:
Food
This category includes both restaurants and groceries. Obviously, the easiest method to save on food costs for most people is to simply eat out less. But that can be difficult and time-consuming! Luckily, I have another article on time-saving tips for cooking at home:
And as for saving money on groceries, we have no shortage of tips there either!
- Reduce food waste
- Buy in bulk
- Buy generic brands
- Compare prices between stores
- Be choosy about organics—they may not be worth it
- Don’t skip GMOs
If you want the details, check out the full article:
Healthcare
Health insurance and healthcare is another huge expense for most Americans, and luckily, there are several things you can do to save here. The biggest and most important thing is to simply choose the correct health insurance plan for you! If you’re on a government or an employer plan, you may not have many options. But many employers actually do offer multiple healthcare plans, and most everyone else gets to choose their own options on the marketplace. If you’re one of those with a choice, then you really need to get into the nitty-gritty, understand all of the terms, calculate out your expected healthcare costs for the year, and compare plan options.
If all this sounds a bit intimidating, don’t worry, because we also have a series of articles going over the basics of health insurance and how to choose a healthcare plan that best suits you!
Now that we’ve got that out of the way, here are some other tips:
- Try to stay healthy in the first place! Eat lots of vegetables. Sleep well. Try to walk a few miles each day. Stretch. Brush and floss your teeth. Get an annual checkup. The basics usually aren’t too bad!
- If you do have health issues, be smart about treatment! Even if you have health insurance, not all types of care are covered (either reliably, or at all).
- Try to get prior authorization from your health insurance company before getting procedures done.
- Make sure you understand how everything works with regards to your deductible(s) and copays/coinsurance.
- Shop around with different providers and compare prices against websites like FAIR Health Consumer. Make sure you’re not getting charged 10x the normal price for your MRI!
- Use sites like GoodRx to save on medications.
- If a bill is too high, dispute it! Some types of “Surprise Bills” are illegal, while many other billing issues are simply mistakes that can be fixed if you contest them. There are even entire sites dedicated to helping people eliminate medical debt, like Dollar For.
Entertainment
I’m not gonna tell you to slash your whole entertainment budget, because fun things are often what make life worth living! But there generally still is a lot you can do to save on this category without making many sacrifices.
- Libraries are free, and not just for books any more! Here are some of the things your local library may provide:
- Ebooks and audiobooks (e.g. via Overdrive/Libby/Hoopla)
- Movies (DVDs or even streaming via Hoopla)
- Video games
- Board games
- Mobile hotspots
- Tool rentals
- Seeds (for gardening)
- Free educational programs and tax workshops
- Cable TV is expensive! Chances are good that you could replace it with a streaming service or two and save hundreds of dollars a year while still having access to more than you could possibly watch in your lifetime. Especially if you share accounts with friends/family!
- For example, I share with a friend! I pay for Netflix, while they pay for HBO Max.
- If you want to watch shows from multiple services but don’t want to pay for them all, just only subscribe to one service at a time! Then once you’ve binged all the shows on that service, subscribe to a different one for a month or two.
- Most people pay way too much for their phones. No, you really don’t need a $600+ phone, and no, you don’t need to upgrade it every year or two. Even a $200-$300 smartphone will likely be more than enough for you unless you’re playing high-end 3D games on it. And unless you’re being careless, your phone should last years before breaking or becoming unbearably slow.
- Try and buy a phone that gets security updates for several years so you don’t need to upgrade as often.
- Premium phone plans give you tons of high-speed data at high prices. But do you really need it? Why not just get a cheap plan, then just minimize your data usage? It’s easy! Simply watch videos, download music/podcasts, etc. when you’re on wifi, and only use data for messaging, email, maps, etc. while out and about. I do this and usually use less than 1GB of data per month. This can save hundreds of dollars per year! Cheap plans from the following providers can cost as little as $15–$30 per month:
- Consider getting on a family plan too! Many providers offer discounts!
- Travel a lot?
- Consider closer/cheaper destinations, or visiting on the off-seasons (e.g. spring/fall vs summer/Christmas).
- Stay with friends/family when you can, either at their house, or by sharing the hotel/Airbnb/etc.
- If you’re not picky about when you travel, use price-tracking websites like Going and Google Flights to get notifications about cheap flights or see which dates are cheapest.
- Use credit card points/miles to get good deals on flights and hotels!
Buy smart
- If you have trouble with impulse buying, try the technique I mentioned earlier!
- Simply put everything you want to buy on a list. Instead of purchasing the item immediately, it has to stay on the list for 30 days. If you still feel strongly about it after 30 days, then you can consider buying it.
- Try and get stuff for free if you can!
- Check out “Buy Nothing” Facebook groups, Freecycle, Nextdoor/Craigslist, garage sales, and other stuff from the side of the road. Just be careful about pests like bed bugs!
- You can often get lots of high-quality free stuff near universities at the end of the school year! It’s crazy what college kids will throw out.
- Buy used items when you can! There’s lots of great stuff at thrift stores!
- If you decide to buy something new, always research and read reviews first to make sure it meets your needs and isn’t going to break immediately!
- Use a price tracker like camelcamelcamel to see if your item is currently on sale, or get notified when it does!
- Consider using methods to reduce the cost, such as:
- Referral codes (either from friends or from Honey)
- Cash back sites
- Buying discounted gift cards (either with credit card rewards or from online marketplaces) to make your purchase with
- Know when to buy the cheap version or the quality version.
- For example, you might be tempted to buy a fancy drill that will last for thousands of jobs. But if you only use a drill once a year, you can probably get by with just a cheap one. If you use it often enough that it breaks or shows its issues, then you can upgrade to a better one!
- Know when to rent or buy.
- For example, suppose you decide you want to learn how to snowboard. Do you really need to go ahead and drop $300 on one instantly, only for it to sit in your attic for decades after only using it once? Maybe try renting a snowboard for your first few trips to make sure you’re really invested in the hobby!
Be your own insurance company
The whole purpose of insurance is to make sure that you can pay to fix/replace something expensive. So when it comes to things like your house or health, you probably want insurance, since you could pretty quickly end up owing hundreds of thousands of dollars!
But what about everything else? Well, if you could afford to do the fixing/replacing on your own, then you probably don’t need insurance. After all, the insurance company needs to make money somehow, so that means they generally collect more in premiums than they pay out in claims. And that means they’re making money off of you. So if you have enough savings, try to self-insure as much as possible! By which I mean, simply pay to fix or replace your own stuff as necessary, rather than buying insurance. It’s less paperwork too!
That means you should NOT get:
- Extended warranties
- Phone insurance
- Car insurance for dings and scrapes
- Insurance for anything else that you can afford to repair/replace or go without
Unless you break everything you touch, you’ll most likely end up saving money in the long run! For more nuance on this topic, check out our dedicated insurance article:
Look for places to snowball your savings
Sometimes, you can use your savings in order to get even more savings! The classic example is the Boots Theory—those without savings are stuck buying a cheap $10 pair of boots every few months, while those with savings are able to buy a $50 pair that lasts for decades, thereby saving them money in the long run.
You can apply the same logic to many things in your life in order to save money:
- Buy goods in bulk. It’s usually a better deal to buy a larger pack of toilet paper or a bigger bag of rice than to keep buying smaller portions! Especially so if you’re able to stock up enough to last between sales, allowing you to only purchase them when they’re extra cheap!
- Buy a washing machine to replace laundromat trips. No room in your apartment for one? You can get a portable one that connects to the kitchen sink!
- Switch to a monthly or yearly bus pass instead of buying tickets every day for your commute.
- Buy a more reliable car if your current one is costing too much in repairs.
- Switch your car/renters insurance from monthly payments to 6- or 12-month payments. Monthly payments are usually more expensive than paying for a longer term up front.
- Get preventative health and dental care to avoid a more expensive procedure later.
Other random tips
- Use cash-back credit cards to get a 2-5% discount on everything you buy. We have an entire article on the best ones to get:
- Make use of tax-advantaged retirement accounts. These can save you tens of thousands of dollars in taxes over your lifetime. Check out our article all about investing here: TODO LINK.
- As they say, $20 is $20… but $20/month is thousands of dollars over your lifetime! Try to cut out recurring expenses that you don’t use.
- As mentioned earlier, you probably don’t need streaming subscriptions to Netflix, Hulu, HBO Max, AND Disney+ all at once, right? So subscribe to them one at a time, binge your favorite shows, then switch to another service next month!
- Do you have a gym membership that you aren’t actually using? Just cancel it! You can always sign up again later.
- Go through your credit/debit card statements. Notice anything that you aren’t actually using? Cancel it!
- Wash your clothes less often. Unless you got really sweaty or dirty, you can wear most articles several times before washing, especially items like jeans and wool socks. Not only does this save you time and money, but it makes your clothes last longer!
- Hang dry clothes. Again, less cost, and they last longer. Or consider drying at a lower heat at least! Remember, all that lint in the dryer is from your clothes disintegrating.
- File your taxes. If you work, but don’t make a lot of money, there’s a good chance you’ll get a refund (e.g. due to the Earned Income Tax Credit). And obviously, if you don’t file and actually owe money, then you’ll start to owe late fees and penalties too. So don’t put it off!
Conclusion
So was that 182 tips? I actually don’t know! But it sure was a long list, especially if you read all of the links I posted here! Possibly so long that it might even be considered… intimidating.
But worry not, because you don’t have to do everything at once. Changing your lifestyle is hard! So rather than try and make sweeping changes, I recommend making little ones. Maybe your first goal will be to cook at home one extra night per week. Maybe you’ll create that “wishlist” to curtail impulse spending. Or maybe you’ll just consider the idea of having a roommate the next time your friend says they’re looking for a new place. The point is to take baby steps, and eventually, it will all add up. 🙂
Or maybe you’re already a pro at saving money and want some more “extreme” tips? In that case, I recommend reading through the “21 day makeover” series from earlyretirementextreme.com, and see how they’re able to live on just $7,000 per year.
So anyway, once those savings do add up, what should you actually do with all of it? Well, stay tuned for our next article all about investing and money management! Until then, good luck!
The Readyist 
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