These 17 tips for saving money fast just might help you reach your savings goals in record time.
While it may seem odd to save during a pandemic, having a set goal during uncertain times can be a source of stability – to some extent. It can also allow you to project yourself into a brighter future, which should improve your overall well-being! So if you’re wondering how to save money fast, check out these 17 tips to quickly increase your savings.
How to save money fast
Before you can start saving money each month, you need to have a clear overview of your cash flows. This means that you need to take into account all of your money flows in and out, including any debt repayments you may have, your monthly bills, and how much you save each month. Let’s divide this process into several steps.
1. Learn to manage your budget and understand your finances
The most important thing to save money quickly is to learn how to manage your budget. If you control your budget, you control your finances. Becoming financially independent is essential if you want to achieve your short-term and long-term savings goals. Here’s how to create a budget so you can start saving fast:
- Track your finances over a 30-day period. This includes all of your income and expenses.
- Compare your monthly income to your expenses to estimate how much you are currently saving, or how much you are overspending each month.
- Classify your expenses into fixed and variable costs. Your fixed costs include expenses that are generally difficult to adjust, such as rent or utilities. Your variable costs include expenses such as groceries, entertainment, and subscriptions.
- Identify any variable costs you can save on to increase the amount to save each month.
- Evaluate your progress regularly and make adjustments if necessary. If you’re feeling a bit overwhelmed, there are plenty of management apps available to help you keep an eye on your budget.
2. Pay off your debts (if you have any)
Before you start saving, you will need to pay off your debts. Because interest accumulates over time, the longer you wait to pay off a debt, the more it will increase. Pay off your debts first before focusing on your other savings goals.
For this, consider adopting the 50/30/20 rule. Created by US Senator Elizabeth Warren when she was a bankruptcy specialist at Harvard, the 50/30/20 rule is a simple way to manage your budget and therefore pay off your debts. It works as follows:
- Use 50% of your income for your needs, ie fixed costs such as rent and utilities.
- Use 30% of your income for cravings, i.e. variable costs such as dining out and subscriptions.
- Use 20% of your income for your savings. If you earn €2,500 a month after tax, that means you can save €500. In just one year, you will have paid off €6,000 in debt.
3. Open a dedicated savings account
In order to save money quickly, you will need to separate the money you use for your daily needs from the money you intend to save. For this, it is necessary to open a dedicated savings account. Thus, you minimize the risk of dipping into your savings funds to cover your daily expenses. This will encourage you to follow your daily budget while keeping your savings safe.
4. Schedule your savings
If you have a fixed monthly income, consider programming your savings each month: you can program an automatic permanent transfer from your current account to your savings account each month. Thus, you reduce the risk of using these funds to cover your daily expenses.
5. Schedule your bill payments
Note that you can also schedule the payment of your invoices. Companies often charge late fees if you don’t pay them on time, so paying your bills before the deadline will help you avoid any additional charges.
6. Set your card spending limit
Want a great way to save money fast? Set a spending limit on your credit or debit cards. This will prevent you from overspending and encourage you to assess your daily purchases in advance. Many banks offer this service.
7. Use the envelope management system
Another possibility to help you save money quickly is to use the management system with Dave Ramsey envelopes. This system consists of withdrawing your monthly income in cash from the bank (yes, in its entirety) at the beginning of each month and dividing it into different envelopes according to your management objectives.
Thus, you will have envelopes for your fixed costs (e.g. rent, charges) and for your variable costs (e.g. purchases of clothes, dining out, shopping). By paying for everything in cash, it’s virtually impossible not to stick to your budget! But we grant you, it is probably not the most practical in 2021!
8. Save on your rent
Saving on rent is one of the fastest ways to save some money each month. If you live alone, one of the easiest ways to do this is to share a roommate. This will immediately cut your rent in half, and if you choose to live with two roommates, you’ll pay about a third of your current rent.
So if you’re currently paying €1,300 per month for a three-bedroom apartment and you find a roommate, you’ll save €650 per month.
If you already live in a shared apartment, you can move into a smaller room. Rents are generally calculated according to the room that is for rent. You can thus achieve significant savings each month. In addition, it would encourage you to resell some of your furniture, and allow you to earn some money.
Of course, the ways to lower your rent depend on your household layout, your needs, and where you live…
9. Reduce your expenses
Another tip to save money fast is to reduce your expenses. Your electricity and gas bills represent the bulk of your fixed costs. If you manage to reduce them, you will end up with a certain amount more each month. Here’s how:
- Change energy supplier. By ensuring that you have the most advantageous contract on the market, you can save several hundred euros each month.
- Replace your light bulbs with LEDs. Not only do they consume 75% to 85% less energy than traditional bulbs, but they last 15 to 25 times longer.
- Invest in a smart thermostat. This will allow you to adjust your central heating intelligently and potentially save you some money.
- Seal all air leaks. Air leaks around your windows and doors can increase electric bills because your radiators will have to run longer to heat the room. Instead, plug these leaks with compressible thermal sealing strips to keep the warm air in.
- If you own your home, consider carrying out energy renovations. There are many public aids to make your home a well-insulated cocoon that will reduce your carbon footprint.
10. Have an extra job
If you want to significantly increase your monthly savings, you can try finding an additional activity. It could be working a few nights in a bar or restaurant after work, finding a few freelance contracts, becoming a virtual assistant or maybe babysitting.
If you can afford it, it can be very motivating to transfer all the income generated by these additional activities directly into your savings account. But it is advisable to be vigilant at the risk of burnout.
11. Cancel your unused subscriptions
Subscriptions are incredibly lucrative for many businesses because once customers sign up for their service, they’re less likely to cancel their subscription, even if they rarely use it.
This is largely due to sunk cost bias. Applied to a subscription, sunk cost bias means that it is difficult to terminate a seldom-used subscription because you have already invested so much money. Thus, terminating the subscription would be tantamount to accepting that the money spent so far has been wasted. Postponing the termination of the subscription maintains the illusion that this subscription can still be used. In general, very few of us fully use our subscriptions. That’s why it’s better to cancel unused subscriptions now than to keep them in case you use them later.
12. Do small daily repairs yourself
Trying to fix what you broke yourself is a great way to save money – we’re talking small repairs here, of course. Thanks to YouTube and the Internet in general, it is easy to find online how to fix many things in your daily life. From leaky bathroom pipes, to changing the belt on your washing machine, to fixing the zipper on your jeans, it’s always better to fix these things yourself than paying someone. one to take care of them, or to replace them completely.
13. Think before you buy
Giving in to temptation is the biggest problem when trying to save money fast. Before making a big expense, whether it’s an impulse purchase or not, give yourself at least three to four days to think about it. This will prevent the impulsive part of your brain, seeking a dose of serotonin after a purchase, from taking over.
If you really want to test yourself, try only making a big spend after 30 days of consideration. It’s a surefire way to control your impulse purchases and give you plenty of time to make sure there isn’t a better deal.
14. Buy a car at the end of the financial quarter
If you want to get a good deal on a car, the best time to buy is usually at the end of March, June, September and December. For what ? Because most dealers have specific sales targets to meet in order to claim their financial bonus. Although these sales targets are set weekly and monthly, the big bonuses are distributed quarterly. This means that you are likely to get a better deal on a car at the end of each financial quarter, as the car dealer will be keen to hit their quarterly sales target. Moreover, even if it means changing cars, why not opt for an electric vehicle? Many conversion bonuses have been put in place to lower the bill and guarantee a greener future.
15. Reduce your shopping expenses
If you can manage to reduce your shopping expenses each week, you’ll be amazed at how much you can save in a few months. One of the best ways to do this is to plan all of your meals in advance. This means you can accurately calculate how much you’re going to spend before you shop and reduce your chances of going over budget.
Another tip would be to consider not consuming meat once a week. Since meat is generally more expensive than vegetables and vegetable products, it can be profitable to go without one day a week. These small weekly savings will add up over time.
In addition to this, be sure to look at the products sold at the bottom of the shelves. Supermarkets often put their most expensive products at eye level, to encourage you to spend more, and the cheaper products closer to the floor, making them harder to spot.
16. Set a no-spend day per month
To get used to saving money, decide on one day a month when you will spend absolutely nothing except fixed costs. For this, you can prepare all your meals from the ingredients you have at home, choose to socialize in the park or at home, and spend a relaxing evening reading or watching television. Once you get used to it, you can do this two days a month, and maybe even one day a week to really increase the amount of your monthly savings.
17. Sell your unused items
If you want to start saving money for your vacation quickly, it’s worth making a list of all your unused items and selling them on an online sales site such as Le Bon Coin, for example. This not only declutters your home, but also saves you small amounts that you can save for your next vacation. Conversely, you can also start buying second-hand items more frequently, in order to achieve significant savings and avoid over-consumption.