These 17 tips for saving fast will help you reach your savings goals in no time. Although saving may seem boring, there are methods that allow you to save according to your lifestyle. And not only that, but it will also help you visualize a happier future, make ends meet and increase your general well-being. So, if you are wondering how to save fast, we bring you these 17 tips so that you can see your bank balance grow like foam.
Before you can save every month, you have to be aware of what your duty and credit are. That is, evaluate all your income and expenses, which include your credit repayment installments, your monthly bills and your savings contributions. Let’s analyze them step by step.
1. Learn to manage yourself and understand how your personal finances work
The most effective advice to save fast is to learn to manage yourself. If you stick to a budget, you will take control of your finances. Financial independence is essential to achieve your financial goals in the short and long term. Here’s how to manage your money to start saving fast:
- Track your personal finances for 30 days (include all your income and expenses).
- Compare your monthly income with your monthly expenses to assess how much you are managing to save or how much you are spending more each month.
- Divide your expenses into fixed and variable. Your fixed expenses are those that are usually difficult to adjust, such as rent and utility bills. Your variable expenses are the easiest to adjust, such as grocery shopping, entertainment, and service subscriptions.
- Identify those variable expenses in which you can cut, that is, unnecessary expenses, to increase the amount of money you save every month.
- Evaluate your progress regularly and make adjustments if necessary. If this seems overwhelming, there are plenty of financial management apps that can help you stick to your budget.
2. Pay off your debts
Before you start saving, you will have to pay off your outstanding debts. The longer you delay paying your debts, the higher the interest will accrue over time. Therefore, the savings that you manage to gather will have to be used to pay off your debts. So before you focus on saving for other things, make paying off your debts your priority.
To do this, we propose the 50 30 20 rule. The 50/30/20 rule was created by US Senator Elizabeth Warren when she was a professor at Harvard specializing in insolvency and offers a simplified method to pay off debts. Is that how it works:
- allocate 50% of the income to your needs, that is, your fixed expenses (eg, rent payment and consumption bills);
- allocate 30% of the income to your whims, that is, your variable expenses (eg, eating in restaurants and subscription to services);
- allocate 20% of the income to your savings. For example, if you earn €2,500 net per month, you can set aside €500 every month. In just one year, you will have repaid €6,000 of debt.
3. Open a special savings account
To save fast, you will have to separate the money you spend on your daily needs from the money you want to save. For this, you will need a special savings account. In this way, it will not be so easy for you to fall into the temptation of resorting to your savings to cover daily expenses. Plus, this will encourage you to stick to your daily budget as it will keep your savings out of reach!
4. Automate your savings
If you have a fixed monthly income, you can automate your savings contributions each month. To do this, you must set up an automatic transfer from your checking account to your savings account every month, this can be done with spaces in your bank account. By automating your savings and controlling expenses, you will further reduce the possibility of using this money to cover your daily expenses.
5. Automate your invoices
That being said, it wouldn’t hurt to automate the payment of your bills. Companies often charge late payment fees if you don’t deposit the money on time, so paying in advance will save you more unnecessary expenses.
6. Set a spending limit on your card
Do you want a practical tip to save fast? Limit the amount you can spend with your credit or debit card. This will prevent you from spending more than necessary and will encourage you to keep track of daily expenses. Many banks offer this service. At N26 you can set daily spending limits and decide whether or not to allow yourself to make withdrawals at ATMs, all in a matter of seconds through the N26 app.
7. Use a personal administration system with envelopes
Another infallible trick that will help you save fast is Dave Ramsey’s envelope management system. It consists of taking your monthly income in cash (every last penny!) from the bank at the beginning of the month and dividing it into separate envelopes that correspond to your savings goals.
In this way, you will have envelopes for your fixed expenses (eg, rent, consumption), and envelopes for your variable expenses (eg, clothing, eating at restaurants, shopping). If you pay for all your expenses with a fixed amount of cash, it will be virtually impossible for you to go off budget. Also do not forget to have an emergency fund to save you from extreme situations.
8. Cut down on rent
Saving on rent is one of the fastest ways to start optimizing your expenses. If you currently live alone, one of the easiest ways to achieve this is to share a flat. This will divide the rent by two, and if you decide to live with two roommates, you will pay one third of what you are paying right now.
For example, if you currently pay €1,300 per month for a three-bedroom apartment and add an additional roommate, you will save €650 per month. If you decide to live with two people, you will save around €870 per month, that is, almost €10,500 per year!
If you already live in a shared apartment, you can consider moving to a smaller room. Rental income is usually calculated based on the size of the room that is occupied, so you can save a good bit each month. What’s more, this may also encourage you to be more minimalist, for example, selling things you don’t use to earn extra money.
9. Cut consumption bills
Another fantastic tip to save money fast is to cut back on your consumption. Your electricity and gas bills make up a large percentage of your fixed monthly expenses, so if you can cut them down, you could save yourself quite a bit. We explain how:
- Change energy provider. If you look for the cheapest rates on the market, you can save hundreds of euros a month in gas;
- change your lighting to LED bulbs. LED bulbs are not only 75-85% more efficient than conventional bulbs, but also last 15-25 times longer;
- invest in a smart thermostat. This device will adjust your heating intelligently and you can save a good amount or
- seal air leaks. Leaks in doors and windows can increase your electricity costs, since your radiators have to be running longer to heat the rooms. To fix this, seal these leaks with self-adhesive tape, which will prevent hot air from escaping.
10. Find a second job
If you really want to boost your monthly savings, it is worth looking for a second job. You can work a few hours at night in a bar or restaurant after your work in the office, do freelance work, become a virtual assistant or even be a pet sitter.
If you can afford it, you might be motivated to put all the money your second job generates directly into your savings account. But be careful: don’t end up burning yourself. Your mental health is much more important than reaching your savings goals!
11. Cancel subscriptions you don’t use
Subscriptions are a money machine for many businesses. And it often happens that, when a client subscribes to your service, he is usually reluctant to cancel his subscription, even if he hardly ever uses it.
This is due, in large part, to the sunk cost fallacy. Applied to a subscription to a service, the sunk cost fallacy means that it is difficult for us to cancel a subscription that we rarely use because we have already invested a lot of money in it. Therefore, canceling the subscription would mean accepting that until then we have been wasting money. But, by postponing the unsubscribe, we feel we still have a chance to take advantage of it. However, in general, few of us take full advantage of subscriptions. Therefore, it is much cheaper to cancel the subscriptions that we do not use now, instead of waiting for a hypothetical moment in which we will take advantage of them.
12. Try to be more handy
A great way to save is to try to fix things that break with your own hands. Thanks to YouTube and the internet in general, you can learn to fix almost anything online. From leaky pipes to jean zippers, it’s always cheaper to fix these things yourself than it is to hire someone or buy new items.
13. Think twice before splurging
Succumbing to the temptation of satisfying a sudden craving is one of the biggest obstacles to saving. Before making a significant expense, whether impulsive or not, give yourself a period of reflection of at least three or four days. This way you will avoid being dominated by the impulsive part of your brain, which wants that shot of serotonin that the purchase produces.
If you really want to test yourself, challenge yourself not to make any significant purchases until 30 days have passed. In this way, you will be able to reduce your impulse purchases and you will have plenty of time to find other cheaper offers.
14. Buy the car at the end of the term
If you want to buy the car at a good price, the best time is usually at the end of March, June, September and December. Why? Because most dealerships are set quarterly sales targets in order to earn their sales commissions. Although these targets are set weekly and monthly, the large commissions are charged each quarter. Therefore, you will be more likely to get a good price at the end of the quarter, as the dealer will want to hit their quarterly sales target.
15. Cut back on your supermarket purchases
If you manage to save on your grocery shopping each week, you’ll be amazed at how much money you can save over just a few months. One of the best ways to achieve this is to plan your meals in advance. That is, calculate exactly how much money you are going to spend before making the purchase and reduce the chances of going out of your budget.
An additional tip is to go meatless one day a week. Since meat is usually more expensive than vegetables and plant products, it is worth choosing one day a week to do without it. This small weekly saving is noticeable over time.
Other than that, don’t forget to take a look at the products on offer on the lower shelves. Supermarkets tend to place the most expensive products at eye level so you spend more money, but the cheapest products are lower to the ground, so they go unnoticed.
16. Choose a free day every month
So that saving becomes a habit, choose one day a month in which, apart from your fixed expenses, you don’t spend a penny. This can translate into cooking all your meals with the ingredients you have at home, socializing in a park or at home, and spending a relaxing afternoon reading or watching TV. When you get used to it, you can increase to two days a month and even one day a week.
17. Sell the things you don’t use
If you want to start saving quickly for your holidays, we suggest that you review all the possessions that you do not use and sell them on online markets, such as eBay or Nextdoor, thus promoting the circular economy. That will not only help you organize your home, but you will also earn some extra money that you can put towards your savings goals!
