There’s this widespread myth that saving money equates to depriving yourself. That couldn’t be further from the truth. Saving is about making intentional choices, not deprivation.
If you lose your job, saving is the difference between being evicted and being able to pay your rent because you had a 6 month emergency fund.
I’m going to give you practical strategies for how to save without feeling restricted, allowing you to protect yourself against the inevitabilities of life.
Let’s begin!
1. Save Money by Spending Smarter
Traditional budgeting emphasizes cutting expenses, no matter how dear some of those expenses might be to you. While that may work for some, it doesn’t work for the vast majority of people.
You have to view saving as a balance between cutting costs and enjoying life. You don’t have to become entirely logic-based and cut out all unnecessary expenditures. Try this:
- Instead of depriving yourself, focus on value-based spending. In other words, keep what brings you joy and cut out what doesn’t.
- Many people waste money on things they barely use, like subscriptions or gym memberships. The key is intentional spending. If your morning $5 coffee is important, keep it. On the other hand, if your Netflix subscription goes unused, cancel it. Through prioritizing what actually adds value, and eliminating expenses with low value, you can save easily without feeling restricted.
- You can also reduce the number of times an expense happens, and this way you treat yourself in moderation without sacrificing your financial health. For example, you could eat out once a week instead of twice a week, or travel once every six months instead of every three months.
2. Identify High-Impact Expenses
According to the Pareto Principle, 80% of results are driven by 20% of actions. In other words, don’t overly fixate on small expenses. At least not until you’ve addressed the largest expenses. Do this:
- Focus on cutting your largest expenses first. Housing, transportation, and food are often the biggest expenses. Think about how you can bring those down. Maybe you could downsize your apartment, walk/take public transportation, negotiate bills, meal plan, and buy generic brand items instead of name brand items.
3. Use Smart Money Systems Instead of Willpower
We all know that saving money is important. However, just because you should save money, doesn’t necessarily mean that you will. Here’s what you might consider doing:
- Automate savings. Out of sight, out of mind. Paying yourself first before even considering any unnecessary expenditure is imperative when it comes to saving money.
- The envelope system. You could do this for all of your finances, or you could only do it for guilt-free spending.
- Audit your subscriptions.
- Execute regular financial check-ins to make sure you’re on track.
4. Say No More Often
When cutting expenditures, peer pressure can be difficult to deal with. In this case, no will be your favorite word in the dictionary. The following will be crucial:
- Set expectations with your friends and family about your financial priorities.
- When you face peer pressure, take a step back and remind yourself of your financial goals.
- Lastly, don’t expect that people will understand. Many people subscribe to financial myths that don’t allow them to see past the end of their nose. Follow your financial path and ignore the naysayers.
5. Increase Income Instead of Only Cutting Expenses
Sometimes, there is more month than there is paycheck. In that case, you need to earn more. Here’s some ways to do that:
- Get another job. It’s unlikely that you’d get a sufficient raise to meet your expenditures, so changing jobs might be the best option, but if you’d like to go through the route of a raise, build your case by keeping track of your accomplishments (make use of statistics such as how much money you’ve saved the company, or how you cut down a process into 30 minutes from 2 hours).
- Try side hustles. Side hustles are incredibly popular and have allowed many people to achieve financial freedom. Not all side hustles are created equal however. Do your research.
6. Gamify Saving
Make saving fun. If you gamify the experience, your savings journey will be more rewarding than if you make saving a miserable experience. Try this:
- Go on a no spend challenge for an entire month
- Only order food where there’s a buy one get one free offer
- Try savings challenges. Every time you save money, you color in the icon representing the amount that you saved. I always feel proud when I’m able to complete a savings challenge. It motivates me to save more.
To Sum Up
Saving money isn’t about suffering. It’s about being intentional. Strategizing how you save money can lead to huge long-term benefits.
Try one strategy today and see the difference.
Want specific ways to save money without needing to put in the mental work yourself? Here’s 10 ways to save your way to $10,000, or more, a year!
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