10 Small Ways to Save Money That Make a Big Difference
When it comes to saving, sometimes starting small feels almost like not starting at all. A bit here and a bit there tends to add up like drops in a bucket. The important thing to remember though when it comes to saving money is that those drops can eventually grow to a trickle, then to a stream, then a torrential current of cash.
Using small ways to save is similar to the bundle of sticks story – remember the one that starts with the man easily breaking a single stick. Then he snaps two, even three sticks together. But when given an entire bundle of sticks, he finds it is virtually unbendable, let alone breakable. It’s much the same with small savings techniques. Many, seemingly inconsequential savings methods bundled together can significantly grow your nest egg to immense proportions.
1. Get rewarded for spending on a credit card
It might seem odd to begin an article on ways to save with a topic like credit cards. With interest rates often ranging anywhere from 10-20% percent (unless you get a zero balance transfer credit card), credit cards can be the arch nemesis to a savings plan, but only if you let them. First, you must ensure you pay off your balance each month to avoid those hyper-inflated interest rates. Second, get a credit card that offers cash back, store discounts, or other rewards and incentives, so that when you do spend, you also save.
2. Take advantage of balance transfer cards
If you are carrying a credit card debt then it will definitely be beneficial for you to transfer your credit card balance between cards, which will allow you to avoid paying the sizeable interest rate on a balance. Making such a move with your debt, say from a card with a balance of $1,000 and a 15% interest rate, to a card with an significantly lower or introductory 0% rate, can save you hundreds of dollars, if not more depending on the time it takes to pay off your balance.
3. Coupons will save you money
What if you saw a dollar bill taped inside the Sunday newspaper? Would you take it? Of course you would. Yet, there is a missing sense of urgency among many of us when it comes to coupons, which are essentially the same as cash. Certainly not all coupons are money savers, especially if they are used on particular name brand products that are more expensive than their generic competitors, but if you comparison shop and know a deal when you see one, coupons can turn small savings into big cash.
4. Start to save your spare change
Hey, if it worked when you were seven, it might just work when you’re thirty-seven. Hauling all that change to the bank to be turned in is often a big enough deterrent to make most people leave the jar where it is. Moreover, while all that change probably doesn’t look like much, you might be surprised how much cash you get when you eventually turn it in.
5. Save tax-free with government bonds
Putting money into government issued savings bonds can be a great way to save. These investment vehicles offer a low initial investment ($25 is the minimum E-series buy in), a secure way to save, and guaranteed (albeit sometimes low) returns. Taxes on U.S. government savings bond interest can also be deferred until the time the bond is cashed, allowing your investment to grow for up to 30 years tax-free, and if used for educational purposes might be tax-free altogether.
6. Set up a monthly direct deposit to a savings account
Direct deposit can be a small saver’s best friend. Diverting a portion of your paycheck, even if it’s only $20 each pay period, to a separate account, can add up to big savings over the years. That $20 deposit every two weeks is $520 a year, $5,200 after ten years, and that’s before you add any interest earned on the account.
7. Payroll deductions
Having certain items removed from your paycheck before you are paid is a small way to earn some big savings. Using deductions for an employer sponsored health plan, retirement account, or savings plan, can be a wonderful way to save without really noticing the loss of money. Not only are you stashing cash, but some of these deductions are pre-tax, saving you even more, especially over the long run.
8. Avoid taxes to increase your savings
There is a big difference between evading taxes and just avoiding them for a while. As we’ve already seen, everything from savings bond interest to certain payroll-deducted items can be tax deferred. Avoiding taxes will allow a larger portion of your money to grow, increasing your savings over time, and delaying the cost of taxes for years – sometimes indefinitely. When buying products or considering retirement, it is also important to consider sales and property tax rates since they can range widely depending on cities, counties, states, or regions.
9. Let your savings save
Once you’ve managed to start saving, let your stash work for you. Compound interest, dividends, and similar returns on investments can grow you’re money without you having to lift a finger. While sometimes the returns are small, over time, they can grow exponentially, and who can deny that free money, no matter how little, is nice to get.
10. Liquidating leftovers
Few people realize just how much money they have in their home, either in the form of books, CDs, DVDs, antiques, or other household items. Strip mall stores, resale shops, and a growing number of internet sites offer to purchase specific items such as textbooks, CDs, DVDs, and more. These businesses have made selling personal items a lucrative source of income for many. Reselling such belongings can be a great way to turn your unused items into cash.