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Thrifty ideas for saving money

Have you been looking for some thrifty ideas for saving money?

Thrifty ideas for saving money

Some of these you may already be doing, some may be more or less suitable depending on your circumstances, some may be seen by your friends and family as a bit wacky, and some may even prompt you to say duh!. But let’s face it, what is obvious to some folks may be less so to others. So let’s just lay it all out there. Here we go.

Set financial goals

Bullseye

Fail to plan and you are planning to fail. This applies many times over to budgeting and managing your money.

Use credit carefully

Credit card

I’m not saying only use cash and never use credit. I am saying use credit carefully.

Use a credit card from your regular retail bank. You should be able to get one of the main credit cards at no cost from the bank where you have your checking account.

Here is the really simple part – just pay off the statement balance every month without fail. You should even be able to set this up as a standing feature with your bank. This way you will never pay interest.

It is important to know the game that credit card companies are playing. Store cards play that game even harder. They want you to run up credit and forget to pay off the balance. Or they are hoping that you will focus on the minimum payment and miss the payment needed to pay off the balance. The game they are playing is to lure you into using credit.

It’s a bit like the old Blockbuster Video business model. They made more money off of late fees than off of regular rentals.

OK, I shouldn’t assume everyone knows who Blockbuster Video was. This was a company that rented out videotapes, mostly of movies and old TV shows. They had outlets all over the country. They just hoped you would forget to bring the tapes back on time so they could charge their substantial late fees. Credit card companies are doing much the same thing.

Pay off your debt

Pay off debt

This is an obvious one maybe, but it is something many of us struggle with. Here is an article that explains the quickest ways to get out of debt. Here is an article that reviews some of the major debt relief programs.

Use coupons

Sale

My mother used to do this. Save up the coupons that come through the mail and that you get at the supermarket checkout. Get into the habit of sorting them into a safe place and take them with you when you go shopping.

Use your rewards

Rewards cards

Make sure you maximize the use of your rewards by planning when and how you use them.

Create a budget

Budget

This is another one that seems simple but so few people do it. Track your actual expenses sort them into categories. You may be in for a shock or two. Most people who don’t already live frugally are surprised at how much money goes on eating out for example. Stop eating out for a month or two and you might be able to afford a new couch. Well, a cheap now maybe.

Use the 50:30:20 rule

50 30 20 rule

This says 50% of your income should be for essential expenses. Essential expenses include rent, utilities, groceries, insurance. In the next category, 30% of your income should be for non-essential or discretionary expenses. These would include eating out, movies, impulse purchases, and other extravagances. In the last category, you should be saving 20% of your income to build a nest egg.

Follow Mr. Mickawber’s advice

Mr Mickawber

This is another way of saying – live within your means.

Mr. Mickawber was a charming character in Charles Dickens’ novel David Copperfield who had trouble staying out of debtors’ prison. As he explained to the young Copperfield,

“Annual income 20 pounds, annual expenditure 19 pounds 19 shillings and sixpence, result – happiness.

Annual income 20 pounds, annual expenditure 20 pounds, and sixpence, result – misery!”

Of course, back then in 19th century England 20 pounds went a long way. Actually, I can remember a time when 20 pounds went a long way but that’s another story.

The point is clear if you are swimming and keeping your mouth above the surface of the water you can carry on swimming wherever you are going. But if you are swimming with your mouth under the surface of the water, you will drown. The difference is marginal and critical at the same time.

Check your credit card and bank account statements regularly

Check statements

This is a simple point but important. How else are you going to spot errors or evidence of something worse going on? Many of us use credit and debit cards to make all sorts of small purchases. It is a good idea to check your statements, making sure you recognize the names of the vendors and the dates and amounts. However, rather than shuffling through papers, there is an easier way to do it.

Note: This article contains affiliate links

Consider using a budgeting and cost tracking tool like Tiller Money.



Embrace your thrifty self

Embrace

This is a matter of self-image. You will stand a better chance of adopting thrifty habits if you identify yourself as a thrifty person. This carries over to how you interact with people around you. They are more likely to accept your thrifty behaviors if they perceive them as consistent with who you are.

Don’t keep company with extravagant people

Party

This may be hard to do if it involves overhauling your entire social circle. But it’s obvious. If you spend much of your free time carousing around bars and expensive restaurants with friends who don’t think twice about burning through hundreds of dollars in an evening then you will also become like the fool and her money – soon to be parted.

Cultivate cheap habits

Empty pocket

Another no-brainer I guess, but then what are cheap habits? Here are some obvious ones:

  • Repairing shoes and clothes rather than throwing them out
  • Preparing only the amount of food required for a meal
  • Buy raw ingredients and make your own food rather than premade meals, it’s also healthier
  • Avoid eating out
  • Cancel subscriptions you can do without
  • Switch lights off and heating and AC off when you are not using them
  • In winter turn the heating down and put more layers on
  • In summer turn the AC down and take more layers off

Exercise the 30-day rule

30-day rule

The 30-day rule says if you see something expensive that you want to buy, stop, turn around, leave the store. Come back 30 days later. If you still think it is a good idea and you can afford it, then you may purchase it.

Live in a less expensive neighborhood

Neighborhood

There have been some very interesting research done on this subject. This is often referred to as the neighborhood effect and it works in many ways.

Most research and articles focus on the impoverishing effects of living in a poor neighborhood even if you grew up in a wealthy household. But social cohesion works in all directions.

If you live in a neighborhood with a lot of people who live beyond their means then statistically your chances of living within your means are reduced. It has been found that your neighborhood often determines the wealth a family is able to accumulate over the years.

Keeping up with the Joneses can either mean you feel deprived if you can’t vacation in the Caribbean every summer or if you are content making a low-cost camping trip.

Buy used stuff

Thrift shop

Even though I have a Kindle and occasionally will buy books on my Kindle I still prefer to read what I call a real book. But rather than buy new I can often get as new at a much lower cost. In case you were wondering, my reading is far too disorganized to make decent use of the public library.

Sell your old stuff

Yard sale

This is another one I have to admit I have been lamentably poor at actually doing. Our basement has rows of stuff waiting to be sold either on eBay or at the yard sale we keep promising ourselves we will be holding.

Our excuse now is the pandemic. I’m sure that in the future we all like to believe in when we have all been vaccinated, or at least those of us who want to get vaccinated have been, then all the flea markets and yard sales will start up again.

Grow your own food

Growing vegetable

Even if you live in an apartment and don’t have any outside space you can grow food in window boxes. There are many possibilities.

Save constantly

Save

This is simplicity itself. This was something my grandfather instilled in us when I was very young. If ever we got any sum of money, for Christmas or a birthday, actually those were the only times of the year when we did get money, the motto was – spend half and save half!

The thing to be doing is siphoning money off from your cash account into a savings account or better into an investment account. You should set this up as an automatic feature with your bank.

Start investing as soon as you start earning – if not sooner

Market prices

The easiest and often one of the best ways to start is with each paycheck to buy regular amounts of indexed ETFs.

This article explains how to assess which approach to investing is right for you. If in doubt, just start with a basic brokerage account and make regular monthly purchases of indexed ETFs.

The US Consumer Financial Protection Bureau has some excellent advice on saving money.


Questions and answers


Q. What are fun ways to save money?

A. Save every $5 bill. I tried this is coins and then found it was a pain finding anywhere to change them for bills. Be creative,

  • hold a cheapskate potluck evening in with friends,
  • have a “no-spend” week or month,
  • seek out free activities,
  • fine yourself every time you indulge in an unnecessary expensive habit
  • adopt paid pastimes, like dog-walking, part-time grocery or food deliveries.

Q. How much should I save every month?

A. Following the 50:30:20 rule, you should be saving 20% of your income to build a nest egg for retirement. This can include contributions to an employer 401k and any IRA’s you may have.


Q. What is the most effective way to save money?

A. That depends on your circumstances. For most people in the USA today, the most effective way to save money would be to pay off their credit card debt.


Single-page summary

Here is a single-page PDF summary of thrifty ideas for saving money.

Thrifty ideas for saving money summary


I hope you found this article interesting and useful. Do leave me a comment, a question, an opinion, or a suggestion and I will reply soonest. And if you are inclined to do me a favor, scroll down a bit and click on one of the social media buttons, and share it with your friends. They may just thank you for it.


Disclaimer: I am not a financial professional. All the information on this website and in this article is for information purposes only and should not be taken as personalized investment advice, good or bad. You should check with your financial advisor before making any investment decisions to ensure they are suitable for you.


Affiliate Disclosure: This article contains affiliate links. If you click on a link and buy something, I may receive a commission. You will pay no more so please go ahead and feel free to make a purchase. Thank you

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20 Comments

  1. I guess a lot of these suggestions are common sense, but nonetheless very valuable. You said correctly, we are not all the same. What is very obvious to me, might not be at all for someone else. For many people this will be a very good reminder and for others it will be very helpful.

    The one I like best is the 50:20:30 rule, which I never heard of before. I would say if people would even try to live by that rule, a lot less persons would be in financial trouble. Thanks!

    • Hi Jerry, Yes a lot of this is common sense. But something I have found through experience in a number of situations is that common sense isn’t always that common. Thanks for your positive comments.

      Best regards, Andy 

  2. Great subject, I’m listening to the book Rich Father and Poor Father of Chiosaki right now. These tips of yours will do me good to complete the learned and practice. Thanks for the advice 50:30:20, I’ll apply it 🙂

    Thank you for your helpful advice and ideas for saving. I think it’s going to help a lot of people.

    • Thanks for your positive comment. Robert Kiyosaki has some excellent points on building wealth and the importance of income-generating assets rather than money-draining burdens. I am glad you liked the article. Best regards, Andy 

  3. Saving money is an aspect of life many of us fail to get it all right. Regardless of how little earnings we get maybe, I agree with you that we need to set some financial goals; use credit carefully, and most importantly, make a budget. The frustration caused by hard-work which may seem to yield unexpectedly bad results can be overcome by acting decisively regarding how we use and save money.

    • Hi and thanks to taking the trouble to stop by and leave this comment. I agree with you, without proper financial planning and budgeting, even in spite of hard work and earning well we can still get into financial difficulties. Best regards, Andy

  4. This is a never ending topic it seems, Most people are really good at spending money, but have no or less ideas when it comes to saving them. The 50: 30 20 rule sounds great, but I stick to Jim Rohns advice on how to spend a dollar. The 70: 10:10 :10 rule. He teaches never to spend more than 70 cents of a dollar. Invest 10 in active capital, Give 10% to charity and invest 10% in passive capital. He taught this to young people. And If you start at 15 and follow this rule you would be financially independent before the age of 35. I do think paying off debt is important to do and I agree with you on that. Debt is costly. We can always save on electricity and food, but it has its limits to how much we can save. What would you say are the best way to invest your money?

    • I had not heard of Jim Rohn’s advice and that sounds excellent. The all-important aspect is to start as young as possible and to keep it up. As regards the best way to invest, I think it is important to understand yourself as an investor and adopt an approach that best fits you. If you are very young it makes sense to start with a very simple approach such as CDs or even a simple savings account. But as I say I think it is important to grow and understand yourself as an investor and adopt an approach that you are comfortable with and matches both your risk tolerance and your risk appetite. I started investing very young indeed on the impetus from our grandfather. However, he was very rigid in his approach. I abandoned that approach simply because it did not match my proclivities for greater risk and reward potential.

      This article explains some things to consider to start investing

      .

      Thanks and best regards

      Andy

  5. Thanks for writing this article. It’s a reminder not to forget to check my personal finance habits. I think I have done most of the habits that you mentioned above. One of the most useful things that I almost guarantee to be good is to avoid hanging out too much with extravagant people. It really cost me a lot of money when I was hanging out with them. I’m really grateful that now I just keep my closest friends who also happen to be more the frugal kind.

    • Hi and thanks for your comments. Actually, one of the more interesting aspects of researching for this article is just how much social pressures impact our finances and actually how much we end up with in retirement. I think avoiding extravagant people is maybe the more obvious one, but the impact on your financial future of living in different neighborhoods comes as a surprise to many people even when all other factors are the same including the cost of living in different neighborhoods. So it really is a matter of expectations and social pressures. Best regards, Andy

  6. Financial literacy is definitely not taught in school so we all can use these tips as much as we can. Especially in this economy, am I right? I love live within your means the most. Most of us let the temptation of having new things to rule over and we fall into the victims of the credit card. I suggest that if you want to get off debt and save money, go listen to Dave Ramsey. 

    • Hi, I agree with you. Dave Ramsey makes a lot of sense and provides some very good financial advice. Best regards, Andy

  7. Hey Andy,

    wow what a great article! I really like how you point out the different methods on how to save money. I personally like the second one “use your creditcard carefully”. I remember when I have ordered my first creditcard. I felt like the whole world became a big shopping mall. An t-shirt here, an ice there, 20$ meal here, a new subscription there. Flew high, fell deep! At the end of the month I just realized how much I have spent and was surprised that it was that much! in the moment you don’t even pay attention to it, but later on you realize that you should! Thank you for the article, I will definitely give it a share. All the best, Sj

    • Hi Sergej, yes, credit cards are a wonderful trap. I am convinced that many retail and consumer businesses hope that you will fall foul of repayment terms, either because you misread your statement or you just forget to make a payment on time and wallop! you get hit with massively higher interest and fees. If everyone paid their bills on time and paid off the balance before they were charged interest I’m sure many of those companies would go out of business. Best regards, Andy

  8. Why has nobody ever told me about the 50:30:20 rule before? That is such great advice and I can see how it can help me financially! As we are speaking, there are so many people around the world suffering financially, thanks to the economical drop for the past year! Your advice can really help so many people and I do hope that more people can find your article soon! For me, I avoid my credit cards and use my debit cards instead. Use what I have, so I don’t have to worry about paying the bank every month. Debts are also one that a lot of people choose to delay with, which I feel is a very foolish move. Another thing that I agree with you, is to sell off things that you no longer want, you can save space around your house and earn more! 

    Also, with everything online now, the addiction to online shopping is also a dangerous one. It is important for people to set a budget and keep to it which really requires discipline! Thank you for your insightful article and keep up the good work!

    • Hi and thanks for your comment. I agree with you that online shopping in many ways is just contributing to retail addiction and debt problems. Best regards, Andy 

  9. Thanks for this great article Thrifty ideas for saving money. Many of your tips listed in this article I already stick to, but I also like the idea of ​​a 50:30:20 rule. I will now pay a little more attention to the amounts under this rule.
    But I can truly say that if you live by these principles or follow the suggestions you have written in this article, life is much easier and freer from a financial point of view. And in fact, you’re not under stress all the time in terms of revenue and expenses.
    I wish you much success,
    Nina

    • Hi Nina, thanks for the comment. My grandfather tried to teach us a different version of the 50:30:20 rule. His was a 50:50 rule which was just a bit too draconian and hard to apply. The problem with rules that are hard to apply, is we tend to stop following them sooner or later. 50:30:20 is a really good principle to follow. Thanks and best regards, Andy

  10. Hi. I guess saving money is a little bit hard. Like you say, we are not the same, what works for you, maybe will not work for me. I always make a list, and know how much I will spend on bills, for food, toys..etc  And that is a good way to see how you spend your money. The other thing I always do is plan costs far ahead and always put some money on the side for urgent situations. 

    • Hi and thanks for your comment. You seem to have your expenditures well sorted out. Best regards, Andy

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