It’s easy to get stuck in the habit of overspending. Making quick trips to the expensive corner store rather than planned weekly grocery shopping. Driving your car to places you could walk or bike to. That phone call you never make to cancel a subscription or negotiate a better rate.
Bad habits are difficult to break, but they don’t have to be. Opting for one or two small changes to your spending habits doesn’t seem like it would make much difference. But when you combine many simple ways to save, it can add up to massive annual savings, especially when you combine that with cutting small costs that really add up.
Easy Ways to Save Money on a Tight Budget
As you take stock of your personal budgeting, try these easy places to trim costs and save extra money.
Ways to Save on Housing
The most expensive cost for nearly every family is housing. And that makes it the most significant opportunity for savings.
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Ideas to save on housing aren’t the least time-consuming or noticeable monthly budget changes. But they offer the most potential savings for anyone who can swing them.
1. Rent Out a Room (Part-Time or Full-Time)
When I was single, I always rented out at least one bedroom. My housemate covered at least 70% of my mortgage payment. They covered their portion of utilities, lowering those costs as well. And nearly every housemate I ever had went on to become a close friend.
Not everyone loves the idea of managing money with roommates or screening tenants to find the right fit. If the potential headache of roommates turns you off but you also don’t want to pay full rent every month, you have options.
For example, my friend Renee rented out her spare bedroom on Airbnb for three to 10 days each month. Most months, it ended up renting for two long weekends. The rental income was enough to cover between two-thirds and three-quarters of her monthly rent payment. If that model appeals to you, read up on becoming a successful Airbnb host.
2. Rent Out Storage or Parking Space
While less lucrative, renting out your storage space or unused parking is also less intrusive and impactful on your lifestyle.
My business partner Deni has rented out her detached garage and at other times rented out driveway or garage space for boats and RVs. While it never covered the bulk of her mortgage or rent, she typically earned a few hundred dollars each month.
3. Explore Other House-Hacking Ideas
There are many ways to reduce or eliminate your housing costs. For example, some people house-hack by buying a multifamily property, such as a duplex or triplex, move into one unit, and rent out the others. Their neighboring tenants’ rents cover their mortgage payment, and they effectively live for free.
Check out other house-hacking ideas to brainstorm ways to slash your housing costs.
An oldie but goodie, you can save a lot of money by moving into a smaller, lower-maintenance home.
Most of us don’t need large suburban homes. Condos offer far lower utility bills and zero yard maintenance, and you don’t have to spend your weekends hassling with DIY home repair projects or contractors.
Downsize to ditch all the baggage — both literal and figurative — that comes with living a sprawling suburban lifestyle.
Ways to Save on Transportation
Whether you drive a gas-guzzler or a fuel-efficient vehicle, cars cost money. From gas to maintenance, everyone must budget for transportation.
But that doesn’t mean it needs to cost you as much as it does now. There are multiple ways to lower your transportation expenses.
5. Get Rid of a Car
In the beginning, my wife and I each owned a car. Then we moved abroad and experimented with sharing one car. It worked so well that when we moved again, we upped the ambition: We tried living without a car at all.
Living without a car requires getting extremely intentional about where you live. You must choose a home in a highly walkable area where you can walk or bike to work.
Beyond the money savings of not having a car payment, auto insurance, maintenance costs, or gas costs, you may also get into better shape since you walk or bike everywhere (potentially saving on gym membership costs).
If that all sounds like too much to you, start by simply questioning the assumption that every adult in every household must have their own car. Start by sharing a car if you’re not ready to go carless.
6. Consolidate Trips
It doesn’t seem like a big deal to run to the grocery store in the evening and stop by the credit union the next morning. But those separate trips can make a big difference in your gas mileage.
When you run errands, consolidate your excursions to avoid driving home each time you leave a retailer or appointment. As a bonus, you put fewer miles on your car too.
7. Shop Around for Auto Insurance
Believe it or not, changing your car insurance is pretty painless.
Compare price quotes online among the best car insurance companies and see if you can save some money. Don’t forget to research auto insurance discounts like good driver discounts.
You could truly save hundreds of dollars each year simply by making a 15-minute phone call.
8. Buy Cheaper Gas
Also, use the lowest octane unleaded option unless your mechanic or car manual specifies otherwise. The Federal Trade Commission notes that most of the time, using a higher-octane gas than recommended does nothing to improve performance, speed, or gas mileage. It also doesn’t make your car run cleaner.
9. Rethink Your Next Car
Many people want their cars to reflect themselves and their success. That’s precisely why some people aim to buy the most expensive new car they can afford. There’s a term for this sort of conspicuous consumption: a status symbol.
But even utilitarian-minded car buyers often overspend. They allow themselves to get caught up in the add-ons, gadgets, and extras the silver-tongued salesperson proposes, justifying it to themselves by saying it might come in handy one day.
Before buying your next vehicle, stop and reframe the purchase. Instead of asking, “What’s the most I can afford to spend on a car?” ask yourself “What’s the least I can spend to get around?”
Your new car doesn’t have to be a status symbol. It doesn’t reflect anything about you. And if it’s something you only might need one day, it’s probably something you can handle with often cheaper aftermarket products if the need does arise.
Your vehicle is simply a mechanism to get you from Point A to Point B. So buy an inexpensive new car or used car rather than a status symbol or add-on-loaded vehicle the next time your car kicks the bucket.
Ways to Save on Groceries
10. Buy (Some Things) in Bulk
There are some things you shouldn’t buy in bulk.
But nonperishables like paper towels, toilet paper, and staples like dried pasta? Bulk-buy away, assuming you have enough storage space.
Just come up with a system to prevent you from forgetting what you have.
11. Clean Out Your Pantry Every Quarter
One of the great drivers of food waste is forgetting what you already have.
So once every two or three months, take on the pantry challenge. Use all the ingredients taking up space in your freezer and pantry, which forces you to take inventory and use up food that’s getting close to its expiration date anyway.
12. Allow Yourself Only One Weekly Grocery Trip
The more often you go to the grocery store, the more opportunities you have to buy things you don’t need. And that says nothing of the gas and time expense.
Fortunately, careful meal planning can save you money. Every week, plan every single meal for the week. Draw up a shopping list based on your meal plan, check what you already have in your pantry and refrigerator, eat a heavy snack to avoid shopping on an empty stomach, and go grocery shopping.
No midweek cheat trips to the convenience store. No back and forth. Just one organized trip in which you buy everything you need — and nothing not explicitly on your grocery list.
13. Buy Generic
Often, the store brand is literally the same product as name-brand products repackaged and marketed differently. They’re even manufactured in the same plant to take advantage of an economy of scale.
For example, many of Costco’s Kirkland Signature products are manufactured by some of the most popular brands. Reynolds makes no secret of the fact that they make Kirkland aluminum foil — its name is right on the box.
Even when the products aren’t identical, they often taste just as good or work just as well. So try store-brand products before writing them off as inferior — because they’re often not.
14. Reduce Meat Consumption
Meat is relatively expensive, so it can save you money to cook vegetarian meals a few days each week.
That can mean anything from vegetarian chili to beans and rice to a pasta-based meal. By nixing meat just a couple of days per week, you could conserve $10 to $20 on your weekly shopping trip, saving hundreds of dollars each year. There are also environmental benefits of eating less meat, which causes more environmental impact per calorie, per a 2018 analysis published in Science magazine.
When you do purchase meat, buy it when it’s nearing its expiration. Grocers often cut the price in half to unload products nearing their end date. That absolves you of both the financial and environmental guilt since you’d be eating meat the grocery store would otherwise discard.
15. Stop Buying Bottled Water and Sweetened Beverages
Manufacturers would have you believe bottled water pours from a sun-dappled spring in the ground blessed by unicorns. But it’s usually just filtered water — the same stuff you can drink at home for next to nothing.
While you’re at it, stop buying sweetened beverages like sodas and bottled teas. Besides being bad for you, they’re expensive. A 2016 study by the United States Department of Agriculture found the average family spent $2,238.80 on them in 2011.
And if you’re the type to stop at the coffee shop for a $4 latte on the way to work each morning, you can invest in a coffee maker and learn to make your favorite caffeinated beverages at home.
16. Try Apps Rather Than Couponing
Ways to Save on Entertainment and Eating Out
Americans spend enormous sums on entertainment expenses and meals prepared by businesses rather than themselves. But there are plenty of easy ways to spend less on it without having less fun.
17. Skip the Alcoholic Drinks at Restaurants
When I worked in the restaurant industry, I learned that restaurants make most of their profit on meal add-ons like appetizers, desserts, and (most of all) beverages. The restaurant where I worked marked up alcoholic drinks by four or five times their wholesale cost.
Have a drink at home before or after your meal. Or better yet, quit drinking entirely to both save money and improve your life expectancy.
18. Take Advantage of Discounts
When I was young and single, I had a hard time getting excited about cooking romantic meals for one. So I went out to eat at bars and restaurants frequently.
To save money on restaurant meals, I started keeping a (nerd alert) spreadsheet of all my favorite haunts’ happy hour deals and nightly discounts. That way, on any given night of the week, I’d know every special from $1 Taco Tuesdays to $4 burger night.
19. Cut Cable in Favor of Streaming Services
Why spend $100 per month on cable TV when you could spend $10 per month on Netflix or Hulu?
Cut the cord and keep only your favorite video streaming service to save significant money each month.
20. Ditch Your Landline
While you’re at it, ditch your landline phone bill and stick with a low-cost cellphone plan. Almost everyone has a cellphone in today’s world, and paying for two phone numbers is unnecessary. It’s not like you’re using your landline to send faxes, after all.
21. Get Outside
There’s plenty of free or inexpensive things to do in the great outdoors. For example, camping costs a fraction of the price of a hotel room, if anything at all. Or you can do your favorite athletic outdoor activities, like hiking, fishing, canoeing, or snowshoeing.
Ways to Save on Health and Medicine
Health insurance and medical care are generally outrageously expensive in the U.S. Save money where you can on these often unexpected expenses.
22. Quit Smoking
At an average cost of $6.28 per pack, according to SmokeFree.gov, a pack-a-day smoker blows $2,292 per year on cancer sticks.
Aside from the obvious financial benefits of quitting smoking, it’s also one of the best documented ways to extend your life and reduce the risk of expensive health risks like lung disease and heart disease. Conditions like that can cut your career short in addition to costing hundreds of thousands of dollars in health care expenses and lowering your quality of life.
23. Buy Generic Prescription Drugs
Even more than groceries, generic prescription drugs use the same active ingredient in the same doses as name-brand drugs (the Food and Drug Administration requires it). Don’t pay extra for a brand’s marketing. Buy generic drugs.
24. Try Prescription Drug Savings Apps and Discount Cards
Prescription drug prices vary wildly among sellers. It’s not uncommon for a pharmacy to charge double the price from another only a few miles away.
25. Switch to a High-Deductible Health Plan and Health Savings Account
When you pay for expensive health insurance, you pay one high bill (the premium) to avoid the possibility of other high bills (medical expenses).
Instead, you can pay a low premium with a high deductible and put the monthly savings in a health savings account (HSA). Think of it as a dual-purpose medical emergency fund and investing account.
These accounts come with the best tax benefits of any tax-advantaged account, allowing you to save and invest tax-free for your future. In doing so, you keep more of your own money in an account you control rather than lining insurance corporations’ pockets.
26. Explore All Your Options if Your Job Doesn’t Include Health Coverage
More health insurance options have opened up in the last 15 years for workers without health benefits.
Review all your options for health insurance without employer coverage, such as an HSA or association health plan, rather than simply assuming you have the most cost-effective option.
27. Quit the Gym
According to Fit for Everywhere, gym memberships add up to a surprising amount of money each year, roughly $800 on average.
Rather than spending money on membership fees, try home workout routines that don’t require equipment. Try home workouts from Nerd Fitness for some fresh ideas. Or you can find workout videos from pros on YouTube or use apps for your smartphone, tablet, or streaming device.
Ways to Save on Utilities
Utility bills can add up if you’re not careful. While you can’t avoid paying for electricity or water entirely, you can slash your bills if you pay attention.
27. Negotiate Lower Rates
If you live in a regulated state (meaning energy contracts are awarded to one or two providers), your electric and gas bills won’t budge. If you live in a deregulated state, there’s more competition for utilities, which means there’s room to negotiate or seek a new provider.
Get out your recent bills and customer service numbers for each utility, and start making calls. Explain that you plan to change providers unless they can offer you a better rate.
Note that this tactic works much better if you’re currently outside the contract term or your contract expiration is approaching soon.
28. Seal Drafts and Leaks
Winter months mean high heating bills, especially if your home leaks energy. Before it gets cold, winterize your home. Check for gaps around doors and windows, and seal them with foam to keep the heat in your home and prevent sky-high bills. You can also conduct a complete home energy audit.
For more ideas, read our article on lowering your heating bills during the winter months to save hundreds each year. The same energy efficiency updates also keep cool air inside during the summer, reducing your air-conditioning costs and deepening your savings.
29. Reconsider Your Thermostat
For a couple hundred dollars, you can upgrade to a smart thermostat. It can pay for itself in energy savings in just a year or two.
They work by optimizing your thermostat based on your typical usage. And they concentrate on climate control when you’re home and reduce it when you’re not.
30. Reduce Water Usage
The average American household spends $851.16 on water annually, according to data compiled by Move.org. But there are several easy ways to cut costs.
Try putting something heavy and bulky, like a brick, in your toilet tank to reduce the amount of water used per flush. Or you can follow the “if it’s yellow, let it mellow; if it’s brown, flush it down” approach.
Take shorter showers. Turn off the faucet while you soap your hands. Wash dishes with a bowl of soapy water rather than leaving the tap running.
For more ideas, see our article on ways to reduce water usage.
Ways to Save on Financial Services
Bank accounts and financial services can get expensive quickly. But by setting up the right accounts for your savings goals, you can avoid most or even all fees.
31. Switch to a Truly Free Checking Account
Most banks advertise free checking with a series of asterisks and other mysterious symbols next to it. When you dig through the fine print, you discover you must do things that are simply impossible for many Americans to avoid bank fees, such as maintain a minimum daily balance of $2,500 or have your paycheck direct-deposited.
32. Pay Off Your Credit Card in Full Every Month
Pay off your credit card balances in full every month to avoid paying excessive interest rates on them. If you can’t pay them all off immediately, try the debt snowball method to knock them out quickly.
33. Use a Commission-Free Brokerage Account
Not so long ago, all investment brokerages charged commissions.
Then, Charles Schwab announced it was eliminating all commissions, and reluctantly, other brokerages started following suit.
34. Use a Free Robo-Advisor
Human investment advisors are expensive. Fortunately, the overwhelming majority of people don’t need that level of customized financial advice.
For most people, a robo-advisor is more than capable of helping them achieve their long-term financial goals. And today, many of the best robo-advisors, such as Schwab or SoFi Invest, are free. So stop paying an asset management fee to an investment banker.
And use automatic transfer features to take advantage of dollar-cost averaging. It’s a strategy that spreads investments over time and reduces the impact of market volatility.
Ways to Save on Clothing
Clothing can eat up a considerable portion of your monthly budget if you’re not careful. Even if you love to shop, consciously checking for the best deals, avoiding impulse buys, and operating within a budget can add up to a lot of savings in the long run.
35. Use Cash-Back Programs
Commission cookies are tracking tags saved to your browser that tell a retailer how you found its site or product. The retailer then pays a commission back to the referral point. These cookies are common on blogs, so if you follow a link from your favorite shoe blog to a pair of killer boots, you’re giving that blogger a commission.
By using a cash-back program like Rakuten, you get your own referral link, and Rakuten shares the commission with you. It’s a simple way to get some cash from your online purchases — just log into your account, shop from the Rakuten site as the access point, and reap the rewards.
36. Download Coupon Apps
Never shop for clothes without first checking couponing apps like SnipSnap and RetailMeNot. While waiting in line to check out, run a quick search from the app to see if the retailer has any current in-store deals. They can scan the coupon right from your phone. It’s an easy and convenient way to save money, even on unplanned shopping trips and purchases.
37. Swap, Don’t Buy
To mix up your wardrobe, swap with a friend who’s a similar size instead of purchasing an expensive brand-new garment. You can even host a clothing-swap party to take this tactic to its logical extreme.
38. Rent Special-Occasion Wear
What’s the point in buying a tux if you only plan to wear it once? Whether you’re talking about a suit or a dress for a special event like a wedding or prom, clothing rental websites like Rent the Runway can help you dress the part without wasting cash on clothes you’re only going to wear once. For example, a $700 designer gown costs as little as $70 for a three-day rental with free shipping both ways.
39. Check Online Clearance
Clearance racks are like shopper heaven to someone on a tight budget. But if you find they yield limited sizes, check the retailer’s online clearance instead. In-store clearance inventory is limited to what’s on hand and in storage for that location, but going online means pulling from numerous storehouses.
You can get better deals and more sizes by checking the retailer website before you attempt to buy in-store.
40. Buy Timeless Clothes
In my 20s, I wanted to wear edgy, stylish clothes — the type of clothes that fall out of fashion within a year or so.
But over time, I’ve discovered that certain looks never go out of style, such as the preppy look, athletic look, or classic looks like black T-shirts and jeans. Today, I wear athleticwear while I work (which conveniently includes a midday workout), preppy attire for cocktails and parties, and a classic look for laid-back occasions. I may not win any runway awards for adventurous fashion, but I also never look tacky or out of place — and I rarely have to buy clothes.
The greatest opportunities for saving often mean the greatest impact on your lifestyle, such as buying a multifamily property to house-hack.
But not always.
Many ideas can save you thousands of dollars each year with only minimal change in your behavior. Start with one idea this month, and watch the savings trickle in by the end of the month. Then pick up another next month, then another the month after, and watch the savings snowball.