9 Small Steps to Generate Big Savings

Are you trying to save money to buy a house, a car, to create an emergency fund, or go on a vacation? Building a nest egg doesn’t have to be grueling. Here are nine painless ways to improve your savings.

1. Raise Your Awareness

The first step toward saving is knowing how much money you spend. Record your expenditures using a phone app, or write them down in a small notebook or on a folded piece of paper in your wallet.

Compile everything in one master list or divide your expenditures into categories. The most important thing is to record every cent you spend.

At the end of the month, add it all up. You may be surprised to discover how much money slips away on small expenditures that add up to a big chunk of your disposable income.

2. Use Cash

There’s a psychological advantage to using cash for your daily expenses. It’s much harder to watch cash dwindle in your wallet than to swipe a card. Cash payments eliminate the “spend it and forget it” phenomenon that comes with using plastic.

3. Ask for a Discount

Inquire about discounts wherever you shop. Ask your grocery store about coupons or registered shopper savings, and search the sale flyers to find the best prices on what you need.

Ask retail stores and grocery stores about matching competitors’ prices. Many will!

Ask your auto insurance agent if they offer any discounts (AAA memberships, alumni discounts, multiple policy discounts, etc.). Put your car insurance “on hold” when you are out of town, and your cars are sitting in your garage. (Ask your agent how.)

Many insurance companies offer discounted rates on all types of policies if you pay your bill annually, instead of semi-annually or monthly. The savings can be substantial! Just make sure you’re setting that money aside each month, so you’re ready to pay the bill when it comes due.

If you are purchasing something from an individual, ask if they would take less for the item. And, of course, when buying a house, ask your real estate agent about negotiating for a lower price!

4. Curtail Automatic Payments

It’s easy to sign up for services that automatically renew each month or year, such as streaming services, gym memberships, music subscriptions, and data storage. While each service may seem like a nominal expense, they add up quickly—and are often underutilized.

Take inventory of every automatic payment and cancel everything you don’t need or use.

5. Refinance Your Mortgage

This may not be as simple and painless as the other options on this list, but it could save tens of thousands of dollars over the life of your mortgage, depending on your current interest rate and how much you borrowed.

Even if mortgage rates haven’t changed substantially since you financed your home, you may qualify for a lower refinancing rate if your credit score has improved.

6. Approach your Mortgage Payment Differently

If your mortgage company allows it, consider paying your mortgage on a bi-weekly basis. In a bi-weekly program, you pay half your monthly amount every two weeks, which results in one extra monthly payment each year.

The savings can be substantial over the life of the loan. Just make sure your lender doesn’t charge additional processing fees and applies the extra payment to your principal.

Another option is to round up your payment. If, for example, your monthly mortgage is $971.28, round it up by $28.72 to an even $1,000.00. This relatively painless increase will also generate substantial savings. And, because the extra amount is applied to your principal, you will pay off your home sooner or have more money to use toward a future down payment.

7. Lower Your Utility Bills

Consider getting an energy audit to pinpoint ways to reduce your electricity usage. (Call your electric company to see if they offer this service free or at a low cost.)

Typically, one of the best and easiest ways to shrink energy consumption is to add insulation to your attic. Often, the savings in heating and cooling bills quickly offset installation costs. After that, you can pocket the savings.

Likewise, a new programmable or smart thermostat can trim enough off your bill to pay for itself in a few months.

Replace your incandescent bulbs with energy-efficient compact fluorescent or, better yet, LED lightbulbs.

If you need to replace major appliances, be sure to select ENERGY STAR certified appliances, and compare the annual energy costs between models.

In summer months, you can take a closer look at trimming your water bill.

8. Hit the Pause Button

If you see something you’d like to purchase, give yourself a waiting period of at least 24 hours and stick to it. Impulse buying wastes a lot of money and often leads to buyer’s remorse, a blown budget, and a cluttered home.

If you genuinely need something, you will still need it after your waiting period. In that case, research buying outlets and make sure you’ve found the best deal. Also, consider used and pre-owned options to save even more.

9. Tweak Your Systems

When you break a bill, throw the change in a jar and deposit it into your savings account once a month. For non-cash payments, check out the Acorns app, which rounds each charge up to the nearest dollar and adds your spare change to a small investment account.

Automatically deposit a portion of your paycheck directly into savings.

Ask your employer to maximize your 401K matching, so you don’t leave any “free” money on the table. If your employer offers a flexible spending account or health savings account, use it to make your family’s medical bills tax-free.

There are many small changes you can make to start improving your savings. And remember, small steps can add up to big rewards!