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In today’s economy, it’s essential to have money set aside for emergencies, unexpected expenses, and even big costs. Whether you’re saving for an emergency fund, a vacation, or just trying to get ahead, finding ways to save money fast can be a challenge.
A few simple strategies can often have an immediate effect and make a big difference in your finances. These 20 proven strategies will help you save money quickly and effectively.
1. Cancel unnecessary subscriptions and memberships
The average American spends $219 per month on subscriptions.
Take a hard look at your streaming services, gym memberships, and other recurring fees. You might be surprised at how much you’re paying for things you don’t use. Use an app like Trim to automatically identify and cancel unnecessary subscriptions.
2. Automate your savings
Many online banks and apps like Qapital allow you to automate your savings by rounding up your purchases or regularly depositing a small amount into a savings account. You can also do this by direct depositing a portion of your paycheck into a savings account or joining a 401(k).
Automation allows you to save money consistently without having to think about it. If you save in a 401(k), you can take advantage of employer matching contributions and your savings will grow over time with compound interest.
3. Set up automatic bill payment
Setting up automatic bill payments can help you avoid late fees, which the Consumer Financial Protection Bureau reports can cost you hundreds of dollars a year. Automatic payments can also help you qualify for discounts from utility companies and lower interest rates from mortgage companies.
To handle this, you can use your bank’s online payment facilities or consider a third-party service that offers cashback or rebates for using their platform.
4. Switch to a bank with better interest rates and fewer fees
Traditional banks often charge steep overdraft fees. Consider switching to an online bank that offers fee-free checking accounts and high-interest savings accounts. Online banks can offer up to 5% APY, compared to less than 1% at traditional banks.
5. Open a Certificate of Deposit (CD)
A certificate of deposit (CD) allows you to put money aside for a set period of time. If you can afford to put your money aside for a short period of time, CDs are a great way to grow your savings. CDs offer a fixed interest rate, which is often higher than a savings account. Currently, one-year CDs offer a solid return on your money, with annual interest rates around 4-5%.
6. Take advantage of rewards and loyalty programs
Joining a grocery store, pharmacy or retail chain’s rewards program can lead to big savings. Loyalty programs, especially when combined with coupons and special offers, can save households hundreds of dollars a year.
7. Pay with cash or set a spending limit
Psychologically, it’s harder to part with cash than swipe a card, so paying for everyday expenses with cash can help curb impulse buys like that new game or that next round of drinks. Many careful budgeters espouse the “envelope” method, which literally involves splitting up your cash for the month into different envelopes allocated to different expenses. When you run out of cash, you can’t spend any more.
On the other hand, if a credit card fits your lifestyle, it does give you some safety nets: For example, many banks allow you to set spending limits and alerts on your credit cards, so you can keep control of your spending and prevent losing money.
8. Stop paying for convenience services
Americans spend a lot of money on convenience services — over $400 a month on delivery alone. To get that money back, stop outsourcing services and “insource” them instead. Cooking at home and doing small home repairs yourself can add up to big savings in no time.
9. Earn cash back on everyday purchases
If you need to use credit, see if you can get rewards. Apps like Rakuten and Ibotta offer additional cash back discounts when you shop online or in-store.
Cash-back credit cards like Chase Freedom and Discover It offer up to 5 percent cash back on regularly changing categories like groceries, restaurants, online shopping, etc. Just remember to pay off the balance each month to avoid paying interest.
10. Buy in bulk
Buying in bulk at stores like Costco and Sam’s Club can save you a lot of money in the long run, especially when it comes to storable items. Buying in bulk can significantly reduce the cost of your grocery shopping, especially if you keep a close eye on your cost per unit (CPU).
But be careful: buying fresh foods in bulk can lead to food waste if you’re not careful. To maximize shelf life, store your items properly and make sure you have enough space in your home to store all the food you buy.
11. Clip coupons (both digital and physical)
Sites like Honey and RetailMeNot make it easy to find digital coupons and apply them at checkout, and according to leading coupon company CouponFollow, households that use coupons save an average of $1,465 per year.
Combine coupon usage with in-store promotions to increase discounts, and automate coupon clipping by installing a mobile app or browser extension that automatically finds and applies coupons at checkout.
12. Sell things you don’t need
One of the quickest ways to generate extra cash is to sell items you no longer need, and platforms like eBay, Poshmark, and Facebook Marketplace make it easy to list and sell everything from old electronics to furniture and clothing.
Before listing, research similar items to set a competitive price and be sure to take quality photos of your items to grab the attention of potential customers.
13. Reassess your housing costs
Housing costs are often the largest part of a budget, and renters can save money on rent by negotiating a lower rent price in exchange for signing a longer lease.
If you’re a homeowner, refinancing your mortgage can help you reduce your housing costs. If you plan to live in your home for at least another two years, it’s a smart idea to refinance when interest rates are low. For example, if interest rates drop from 7.5% to 6%, refinancing your mortgage could lower your monthly payment by $500, saving you a total of about $200,000 in interest.
14. Find a better insurance rate
Many people stay with the same insurance company for years without realizing that they could save hundreds of dollars by switching insurers. Comparing quotes for auto, home, and renters insurance can lead to big savings. Plus, you’ll get the best deal when you combine your home and auto insurance.
15. Reduce energy consumption
Reduce your utility bills by using energy-efficient appliances, adjusting your thermostat, and unplugging appliances when not in use. According to Energy.gov, using LED light bulbs, eliminating air leaks, and adjusting your water heater settings can significantly reduce your utility bills. For example, replacing incandescent and CFL bulbs with energy-efficient LED bulbs can save the average household $225 per year.
16. Use a no-fee credit card
If your credit card has an annual fee, consider downgrading to a no-annual-fee option. Many companies, such as Citi and American Express, offer no-annual-fee credit card alternatives that offer perks at no extra cost.
17. Cook at home
Cooking for yourself can significantly reduce your monthly expenses. On average, eating out costs about three times as much as eating at home. Cooking at home using affordable ingredients can help you reduce this expense. Chances are, you’ll eat healthier meals, too.
18. Plan a no-spend day
A no-spend challenge is an effective way to reset your budget and pay more attention to unnecessary expenses. Challenge yourself to spend nothing but essentials like groceries, bills, and transportation for a set period of time, like one day a week or one week a month.
19. Make a budget
Budgeting is one of the most powerful tools for managing your finances. Apps like You Need A Budget (YNAB) and Monarch can help you track your spending, set financial goals, and save more effectively. Knowing exactly where your money is going can help you make smarter spending decisions.
20. Eliminate one of your wasteful habits
Eliminating just one costly habit, like a daily coffee, a subscription box, or online shopping, can save you hundreds, or even thousands, of dollars per year. Identify your habits and commit to reducing or eliminating them to free up some extra cash to put towards savings.
Conclusion
By making small but effective changes, you can increase your savings quickly and efficiently. From canceling subscriptions to switching to a fee-free bank to automating your savings, these 20 strategies will give you the tools you need to reach your financial goals. Start implementing these methods today and watch your savings grow.
