If you’re like most people, you could use some extra cash. One solution to this problem is to increase your income. But it’s important to consider the other side of the equation: spending less. After all, it doesn’t matter how much money you make if you can’t hold onto it.
To help you keep more of your hard-earned cash, we’ve compiled this list of ways to save money. You’re probably familiar with some of them, but I bet there are a few you haven’t considered. Even if you just put a few of these ideas into action, it could meaningfully boost your savings.
With that said, here are 25 ways to save money no matter where you are in life. To make things easier to navigate, we’ve grouped our advice into six main sections. Use the table of contents above to skip around if you like.
Of all your monthly expenses, housing is probably the largest. Therefore, reducing what you spend on housing (and associated costs) can lead to some of the most substantial savings on this list. Here are some of our favorite ideas for saving money on housing:
Adjust Your Thermostat
According to the U.S. Department of Energy, “You can save as much as 10% a year on heating and cooling by simply turning your thermostat back 7°-10°F for 8 hours a day from its normal setting.”
If you’re at the office for 8 hours per day, then there’s no reason to keep your house warmer or cooler than necessary while you’re gone. So a small, easy step you can take is programming your thermostat to adjust the temperature during the hours you’re at work. Consult the owner’s manual for your thermostat to learn how.
To take things a step further, you can learn to be comfortable at a higher or lower temperature. This takes some time, and I’m not saying you should make yourself miserable. But in the winter, especially, you can often set the thermostat a bit lower if you put on some socks and a sweater. It’s easier than you imagine.
The most straightforward way to lower what you spend on housing is to get a roommate or two. The last time I had roommates, for instance, it cut my monthly housing cost in half.
And even if you can’t achieve a reduction that extreme, a roommate or two could leave you with an extra few hundred bucks at the end of each month.
Need help finding roommates? Check out this section of our guide to moving to a new city.
If you want to lower your housing costs without getting roommates, consider downsizing.
This could mean moving to a place that’s smaller (from a 1 bedroom to a studio, for example).
But it could also mean moving to a more affordable area of town or just to a less fancy apartment complex.
In either case, the goal is to live a bit more simply so that you’ll have to part with less of your cash each month.
Move to a Cheaper Location
For the ultimate housing cost savings, move to a different location entirely.
You can see this pattern occurring all over the U.S. People are leaving the large, expensive, coastal cities for lower-cost destinations in the Southeast and Midwest. If you’re up for the adventure of relocating to somewhere new, the move could save you serious cash over the long run.
You could also experiment with location arbitrage. In this scenario, you find a way to earn money remotely and then live in a city or country with a low cost of living. Doing this for even a few months can allow you to save massive amounts of money.
While housing may be your largest monthly cost, it’s far from your only expense. In this section, we take a look at ways to save money on the goods and services you purchase:
Wait 30 Days to Make Big Purchases
Online shopping has made impulsive purchases too easy. All you have to do is click a few buttons, then and days or even hours later that pricey new gadget will show up at your door.
Don’t get me wrong: I love the convenience of online shopping. But if you want to save money, you need to put some barriers between you and that convenience. To do that, make it your policy to wait 30 days before a large purchase.
It’s up to you to decide what constitutes a “large” purchase — that depends on your income and circumstances.
But when you put some time between you and that shiny new thing you want, you’ll have time to decide if you really need it. After 30 days, you may discover that you’d forgotten all about the consumer good that seemed so essential in the moment.
Pay for Subscriptions and Memberships Yearly
Monthly subscriptions have made it easy to get access to all kinds of software and services for a seemingly low price. However, you can often pay less in the long run if you subscribe to the annual plan instead.
If paying a lump yearly amount for a subscription seems out of your budget, consider saving a small amount for it each month. This way, by the time the next year rolls around, you’ll have saved up the full cost.
Looking for an app to help you save a little each month for your yearly subscriptions? We recommend You Need a Budget:
Making a detailed budget can be transformative. If you want to budget for every expense before it comes up, then You Need a Budget (YNAB) is the best app out there. Along with sophisticated tools for budgeting, it also teaches you how to better manage your money. Click the button below to try YNAB free for 34 days.
It’s a sound financial strategy to compare prices. Especially when you’re shopping for something expensive like furniture or a new appliance.
When shopping in person, don’t be afraid to visit multiple stores. And take advantage of any price matching promos you encounter — your preferred store might be willing to match a competitor to keep your business.
Declare a Gift Truce
Let me be the first to say that I love giving people gifts. I pride myself on my ability to pick something that’s both thoughtful and surprising.
However, the custom of buying gifts for friends and family during holidays can get expensive.
Sure, you’re getting something in return from the other person, so theoretically it’s a “net neutral”. But if you gave up the gift-giving, both of you would have more money at your disposal.
It is possible to get to this point by declaring a “gift truce”. This is a mutual decision for you and your friend (or family member) to stop giving each other gifts.
Be careful with this approach, as some people find it rude or insensitive. I would never consider proposing a gift truce to my family members, for example. But a couple of friends and I have reached such an agreement, and we’re all enjoying the savings it’s brought us.
Make Gifts for People
Homemade gifts get a bad reputation. Many people are afraid to make them because they think they’ll be perceived as cheap. But I’d counter with this: Is how much money you’re willing to spend on a gift the true measure of a relationship?
Properly done, a homemade gift can be so much more meaningful than something you bought at the store.
Here are a few ideas to get you started:
- Handwritten card or letter
- An original work of art
- Homemade food or drinks
- A homemade scarf, hat, or sweater
With just a few changes, you can save loads of money on food and drink. Here are a few of the best ways we’ve found to save on these essential expenses:
Learn to Cook
In our modern world of food delivery apps and trendy restaurants, the temptation not to cook is strong. Learning to cook just a few basic meals, however, can massively boost your savings rate.
If I order dinner through DoorDash, for example, I’ll end up paying around $25 when factoring in the fees and tip. In contrast, $25 at the grocery store would buy enough food to make several tasty meals (or even more, if I was being really frugal).
Bring Your Lunch to Work
In the same spirit as the above tip, you can save a fair amount of money if you bring a homemade lunch to work. If you go out to lunch, you’ll likely spend at least $15 – $20. A packed lunch, in contrast, will run you a few dollars at most.
Even if you only bring your lunch a couple of times a week, that could mean an extra $100 in your pocket at the end of the month.
Learn to Make Coffee
Note that I didn’t say “cut out Starbucks”. While spending less money on coffee is the goal, I think that’s the wrong way to frame it.
If you get a few pieces of basic equipment and are willing to practice, you can make superb coffee at home. It’ll certainly be better than the crap that comes out of those coffee pods every office seems to have.
To get started making great coffee at home, check out this playlist from James Hoffman.
Make Water Your Drink of Choice
Odds are, you don’t drink enough water. But while drinking more water overall is a good goal, you can also drink water to save money.
Compared to buying bottled drinks, the water you filter and drink at home is much cheaper. And when you go out to eat, ordering just water will save you even more money.
What you do for fun can cost quite a lot if you aren’t careful. These techniques will help you keep your entertainment spending in check:
Use the Library
I’m always advocating for more people to use the library. Seriously, it can save you so much money on education and entertainment.
Obviously, borrowing books instead of buying them will save you money. But the library has so much more available than that.
You can borrow audiobooks, digital books, and even movies. And if your library is part of Kanopy, then you can use your library card to stream a variety of movies for free.
Finally, some libraries even let you check out passes to local museums, saving you the cost of admission.
Find Low-Cost Hobbies
Living in Colorado, it’s easy to pick up expensive hobbies. You have skiing and snowboarding in the winter, mountain biking for much of the year, and fancy fitness studios everywhere.
There’s nothing wrong with any of these pursuits, of course. But I’ve found that if I gravitate towards less expensive hobbies, I save a lot of money throughout the year.
You can apply this same mindset to your life. Here are some low-cost hobbies to try out:
- Walking around the city
- Social sports leagues
- Playing music (once you have the instrument)
I’m not saying you have to give up an expensive hobby if you enjoy it and can afford it. Just try to avoid having multiple expensive hobbies at once.
Take Local Vacations
I’ve had the privilege and good luck to travel to several different countries in the past decade. But while international travel can be life-changing, you don’t have to make every vacation a European getaway.
If you’re willing to take your vacations a bit closer to home, you can spend much less overall.
Mainly, you’ll save on travel costs. Driving to a campground or another vacation spot just a couple of hours away is much cheaper than airfare. Plus, you don’t have to deal with the hassle of going through the airport.
You can even cut out the travel portion completely and take a staycation. Get an Airbnb or hotel room in a different part of your city and pretend you’re a tourist for a couple of days. You haven’t gone far, but you’ve still managed to shake up your routine and take a break from life’s stresses.
For this section, let’s get a bit meta. From smarter investments to lower interest rates, here are our favorite ways to save on managing your money:
In some cases, you can get a discount for enrolling in autopay. My student loan servicer, for instance, gives me a 0.25% interest rate reduction in exchange for using auto-debit. And I’ve encountered similar discounts with utility companies as well.
Autopay is a smart option anyway. It helps you avoid late fees or other penalties for missed payments. Not to mention, autopay frees up your mind for more interesting tasks than remembering if you paid your bill this month.
Invest with the Lowest Fees Possible
The goal of investing is to turn a smaller amount of money into a larger amount. Therefore, you should do all you can to avoid any fees that cut into your investment returns.
To start, watch out for any fees your investment broker charges. Fortunately for you, all brokers are required to disclose the fees you pay when you invest through them. You’ll receive this information when you sign up, and it should also be available on the broker’s website.
Besides fees your broker charges, check the expense ratio of any index funds, mutual funds, or ETFs you plan to purchase. The expense ratio is a fee that covers the cost of operating the fund, and it can vary quite a bit depending on the fund in question. You can find info on expense ratios on your broker’s website or in the expenses/fee table of the fund’s prospectus.
Finally, beware of all the fees lurking in your company’s 401(k). Management fees for 401(k) plans can be quite high, and many employers pass these fees along to their employees. The selection of funds to invest in is also often limited, meaning you could get stuck paying high expense ratios.
Therefore, it might be better to invest only the minimum needed to get your employer match. And then you can invest any leftover cash in an IRA, which will give you a better selection of investments and lower fees.
If you’re looking to open an IRA, then we recommend using M1 Finance. They offer very low fees while still providing all the tools you’d expect from a modern, online broker. Learn more below:
Once you've started earning a stable income and paid down your debts, it's crucial to start investing for the future. In my opinion, M1 Finance now represents the best option for beginning investors. The platform is free to use, allows you to open a Roth IRA (the best starting option for most students and young professionals), and allows for automated investing into index fund ETFs. Almost no other platform offers this combo.
Never Pay Credit Card Interest
Sometimes it’s less about saving money and more about not wasting it. And it’s hard to imagine a more wasteful form of spending than credit card interest (maybe compulsive gambling?).
If you’re paying credit card interest, it means you’ve spent more money than you have. Take a look at our guide to getting out of credit card debt to help you remedy that.
And once you’re debt-free, resolve to never pay another cent of credit card interest. It’s spending that gives you no benefit except the ability to spend beyond your means.
Accelerate Your Debt Payments
The faster you pay off a loan, the less you’ll pay in interest. So if you can find a way to put more money towards a loan payment each month, you can save money in the long run.
If you have credit card debt, focus on paying that off first. From there, you can move to lower interest loans such as your auto loan, mortgage, or student loans. Just be sure that you can still meet your living expenses and savings goals before throwing extra cash at loan payments.
This final section includes ways that didn’t fit into the other categories. Some of these are about having the right mindset, while others deal with more mundane matters such as driving less. All will help you save money:
Be Frugal, Not Cheap
Much of the advice in this article is about being frugal. A frugal person doesn’t waste their money on frivolous things or pay more for something than is necessary. Being frugal is wise, and it will save you lots of money.
Just be sure you don’t take things too far. There’s a point where you cease to be frugal and are just cheap. Being cheap is a mistake, as it can end up costing you money in the long run.
If you’re cheap, for instance, you’ll try to spend as little as possible on your desk chair.
But if you buy a chair that’s poorly made, it will likely break sooner. This means you’ll end up spending more overall than if you’d just spent the extra money for a better chair upfront.
And that’s not to mention the reduced productivity or even potential back problems that come from sitting in a crummy chair.
In a similar spirit to the above tip, sometimes saving money in the long-term requires spending it in the short-term. When you spend a bit now to maintain something, it can save you from spending lots later on emergency repairs.
Car maintenance is probably the best example of this. Taking your car in for regular, scheduled maintenance will help prevent more serious problems from developing. Problems that will cost you far more to fix than the cost of an oil change.
If you own your home, the same philosophy applies. It’s much less expensive to pay someone to regularly service your furnace, for example, than to shell out thousands to replace it when it breaks mid-winter.
Beware Lifestyle Inflation
Once you’ve left college and gotten a full-time job, you’ll hopefully find yourself making a lot more money than you used to. With all that extra money, you may feel tempted to upgrade certain aspects of your lifestyle.
Maybe it starts with eating at nicer restaurants. Or getting fancier clothes. Or even moving into a swankier apartment. None of these choices is necessarily bad if it fits in your budget. But if you aren’t careful, you’ll find that your spending quickly rises to match your higher income.
The main way to avoid lifestyle inflation is simply to be aware of it. When you get a raise, view that extra money as additional savings…not extra spending money.
Ideally, you should keep your lifestyle the same and use that extra money for investments, debt paydown, or saving for a large purchase such as a home.
Fight Subscription Creep
Quick: How many subscriptions do you have? And how much are you spending on them per month? If you don’t know the answer, then finding it could save you some money.
Because each subscription is typically a small monthly amount, it’s easy to sign up for a new one here and there. But before you know it, you could be spending $100 / month just on streaming services. I call this phenomenon “subscription creep”.
To combat subscription creep, look through your bank statements and find all the subscriptions you’re currently paying for. Odds are, you’ll encounter one or two you don’t even use. Canceling these unused subscriptions is an easy way to end the month with more money in your pocket.
Because driving is so ubiquitous, people rarely consider how expensive it is.
There’s the cost of fuel, of course. But there’s also maintenance, the depreciation that occurs when you add miles to your car, and possibly even a monthly car payment.
According to AAA, the average yearly cost of owning a new vehicle is $9,282. If you can find a way to drive your car less, then you can reduce that ownership cost and put more money in your pocket.
Besides taking a cheaper form of transportation such as transit or biking, you can also plan your errands so that you have to make fewer trips. Or, use online shopping and services to replace trips you’d have to make by car.
No matter your situation, you could probably find a way to drive less and thus save more.
As you can now see, there are far more ways to save money than you probably imagined. And this list is by no means exhaustive. If you apply a frugal mindset, you’ll discover ways to save money that this list didn’t even mention.
In many cases, saving money is a matter of developing better habits. To learn how to build the habits you need to live your best life, financially and otherwise, check out our habits course:
Building habits isn’t just about discipline; there are real-world steps you can take to set yourself up for success! In this course, you'll learn how to set realistic goals, handle failure without giving up, and get going on the habits you want in your life.
Image Credits: putting coin into piggy bank