Thrifty ideas for saving money

Have you been looking for some 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

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

Use credit carefully

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

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

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

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

Create a 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

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

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

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

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

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

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

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

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

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

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

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

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

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.

This article from Bankrate explains how much you should be saving for retirement, depending on your age now.

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

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Questions and answers

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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.

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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.

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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.

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Single-page summary

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

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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.

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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.

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