You can save money by earning more and having more to save. Or you can spend less. Hand-in-hand with each of these is making lifestyle changes to improve your savings rate. However, not all lifestyle changes are applicable or practical for everyone. 

What follows are some life changes to help you spend wisely on things that genuinely matter and avoid lifestyle inflation.

How to Save Money

First you have to know where you are spending. Break down your expenses by fixed and variable costs. Doing this helps to view everything as either in your control or out of it. Since you can’t do much about fixed costs, these tips will focus on your variable costs, the things you do have control over

First Things First

• Take care of your fixed expenses
• Invest consistently where you feel comfortable (the amount depends on your budget)
• Save for retirement
• Save into your emergency fund for a rainy day (at least 6 months’ worth)

When people say “pay yourself first”, they are referring to the above four areas. Take care of these, and then figure out the rest.

Remember also, once your emergency fund has been built up, the amounts you were putting away there can be re-allocated wherever you need them. (For instance, to pay off any debt)

Of course, investments and emergency funds aren’t required in life, but they are highly recommended.

Next, Develop A Savings Mindset

Once your fixed expenses are out of the way, the rest is up to you to control. Get into the mindset that you control your spending, and whenever you do spend money you should do everything possible to get the most bang for your buck. 

Life Changes To Help You Save

Life changes include habits and the mindset mentioned above. Do these and watch your savings go up!

Buy Only What You Need 

This is especially true when you are working towards paying off debt or have large expenses to take care of or prepare for. Keep your recreational expenses to a minimum and see first where your money is going and what’s the most costly part of your day-to-day.

Avoid Lifestyle Inflation

Lifestyle inflation is one of the worst thing you can do to your expenses. Ignore your neighbors and instead focus on your own needs, expenses, and financial situation. Also, consider delaying any lifestyle upgrades until you understand your finances (e.g., don’t buy a brand new car right away).

Get The Most Bang For Your Buck

Here are some examples to stretch a dollar and get the most out of your spending.

• Look For The Best Deals. Compare rates. If you can shop online, use Rakuten or other cashback apps to help you save. Bargain shop whenever possible – sales, outlet stores, etc. Remember, you don’t need to pay full price to get high-quality items.
• Consider Bulk Spending. This can help you save in the long run, especially if you have families. Costco and Sam’s Club memberships work well here. Paying for memberships upfront annually often can reduce long-term costs (e.g., gym memberships).
• Don’t Sign Up For Subscription Services. Most sign-ups are cheap or free up front, and then are forgotten. Review services you actually need and use and stick to those. Avoid anything that doesn’t serve you.
• Return What You Don’t Use or Like. How many people go shopping, especially online, get stuff, and maybe it doesn’t fit right, or you’re unsure. Now, how many forget to return those items sometimes? Make it a point that if you purchase something and it’s not working out, go and try to get your money back. Those few dollars here and there can add up.
• Purchase Better Quality. Sometimes spending a little more upfront can save you in the long run. For instance, better quality clothes last longer, which means you have to replace them less often, saving on future costs.
• Try DIY. Try fixing things yourself! Youtube is a great resource, as is a simple Google search. It takes a little extra time out of your day; however, the savings can be huge.

Save on Day-to-Day Spending

For the random stuff, consider this:

• Save on utilities by avoiding high usage during expensive, peak hours of the day. You can also consider investing in a Nest thermostat where you can control settings from your phone.
• Only purchase items on credit if you can pay them off in full (this double checks that you can actually afford it!)
• Consider discount grocery stores – You don’t have to use them for everything, but certain items here can save you a lot.
• Try to cook at home versus eating out and attempt to reduce food waste.

For Fun

Be a tourist in your home town! Look for free things to do in your new hometown. 

For instance:

• Visit parks, and museums, go to the beach (if you live near one), go hiking, play outdoor sports, and go for picnics

If you’re unsure about how to afford a vacation, then consider staycations over big international trips. When you go on international trips, create a travel budget, and save up for them separately.

When you plan an evening out on the town or go out to eat, look for and attend happy hours, and look for discount events so that you don’t have to pay full price for those drinks.

A Comment About A Frugal Mindset

Everyone’s tolerance or willingness to go the distance to save is different. The differences arise as a result of our priorities and what sacrifices we are willing to make.

The idea here is to find what works for you and capitalize on it. Sometimes we don’t know how or where we can cut costs until we try. See which of these frugal living tips help you save, and incorporate whatever works into your routines.

What Happens If You Can’t Save?

At some point, cutting expenses will reach a plateau. If you find that you are not saving as much as you’d like, or that you can only go so far on cutting expenses, then look for ways to increase your income. Negotiate a higher salary at work, pick up side jobs, or earn income on the side.

Some Intangible Money-Saving Moves

It’s important to remember that there are some intangible ways to save and increase your net worth. So, you won’t necessarily see your bank balance go up right away with actual cash; instead, you will see a difference in future savings or save on future expenses. Intangible savings may not be as exciting; however, these are super effective ways to save cash and increase net worth.

Pay Off Debt

While this is likely on everyone’s agenda already, it’s important to make it a priority. 

How can higher debt payments now become an intangible benefit?

• The final amount you repay will be far less than if you keep making minimum payments because you will save on interest accumulation.
• Your ability to save AFTER becoming debt-free will be exponentially higher and faster.
• Your ability to go after those lifestyle upgrades you want will also improve as you can easily take on new debt (if you wish) for those purchases.
• Each extra payment saves you in interest. That’s your savings! It’s not literal money in the bank now, but it is literal money in the bank in your future. And yes, the future matters too.

Retirement

This is not a savings account that you have access to, but it is important to have and think about.

The benefits here are the pre-tax accounts. Investing in these accounts will save you in taxes each year. You’re paying yourself in the future versus paying the government now.

In Summary

These tips and money-saving moves can help pay off debts, finance large purchases like buying a new home and still allow you to live life in a fun and comfortable way.

You can make these life changes and incorporate these habits at anytime and still enjoy yourself and prioritize the luxuries that matter most to you. Many of these examples aren’t just about saving money but also about spending it in the best way possible. Try some of these tips and see if they help you!

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Original post published by The Female Professional and syndicated by Wealth of Geeks.

Featured image credit; unsplash.