With the holidays around the corner, most people could use some extra cash for added peace of mind. Not many have the time to work an extra job or create a side business
– especially in the midst of a global pandemic. However, making a few simple changes in your spending habits could save you more than you realize. Small purchases can add up to a lot and prevent you from achieving greater financial stability.
Here are some areas you could cut back on and changes you could make to help your savings grow:
How many subscriptions do you currently pay for that you use regularly? An $8.99 monthly fee doesn’t sound like it will break the bank, but on top of other subscriptions, it may not be valuable
. Evaluate which subscriptions you use and enjoy the most. If you feel like you are not getting the most out of one or more of your subscriptions, set some time aside to learn more about it or see what else it could offer. If it is a streaming subscription like Netflix or Hulu that you feel you don’t use enough, make a point to browse through there next time you are watching TV. If you cannot find anything of interest, it may be time to cut the cord and save the $100+ a year.
Many subscriptions renew automatically each month. Pay attention to your credit and debit card bills and cancel any subscriptions you don’t use. If you plan to cancel but have already paid for the month, try to make sure you utilize the service. Here are just a handful of subscriptions you may be paying for that you may want to reconsider:
• Streaming services
• Gym/health club memberships
• Monthly subscriptions boxes (ipsy, Barkbox, Stichfix, etc.)
• Premium versions of apps
• Cloud storage fees
Consider how much you use each service and if the amount you pay justifies what you receive in return. You could save several hundred dollars by cutting just a few things off the list.
Coffee and Restaurant Spending
Buying a coffee on your lunch break from work may cost about two to five dollars with specialty flavors and tipping. $5 doesn’t sound like a lot when you hand over your cash, but if you purchased a coffee every work day that would be $1,300 for the year. Brewing your own coffee at home could save you a big chunk of change. Whether you drink hot or iced, making a one-time investment in an insulated bottle can still give you that fresh coffee taste. Even purchasing a small instant brewer to bring to the office could save you money. If you think you could cut back on caffeine, choose just one day of the week to purchase a coffee and support the local café.
Eating out frequently can add up as well. This is especially true if you frequently order meals to your home with a delivery fee or eat in restaurants where it is customary to tip. Americans eat out an average of four to five times a week. You would probably pay $10 for a sandwich at a restaurant that you could make at home for much less than $5 worth of ingredients. If you lack time to prepare meals at home or lunches for work, consider getting up earlier during the work week, packing your lunch the day before, or making large batches of meals to reheat later on.
Buying Name Brand Items Instead of Generic
Many brand name products that you see at the grocery store have a generic or store brand
equivalent that tastes just as good and costs much less. You can see the cost savings
for yourself by looking at the tag on the grocery store shelf that indicates cost per ounce or serving. Likewise, many secondhand clothing stores offer used name brand items at a much lower cost. When you need to cut back on your clothing budget but still want something new, consider shopping at a resale store that is local or supports a charity you like. If you find an item you like from a brand name, look online
for a used option or a similar version from a less-expensive store. Your $50 handbag may not feel like a big purchase, but if it is one of five that you rotate out, you may not be getting your money’s worth.
Track Your Spending on Small Items
Many people do not include items such as their daily coffee purchase in their budget because the amount seems too small to be significant. Trying an app that is linked to your debit and credit cards and takes every purchase into account may help you see how much small purchases are adding up to. Apps like Mint
categorize spending and allow you to set a monthly budget for each category. If you are close to your set maximum budget, you will know it’s time to sacrifice the coffee purchases for the month. Using cash for small transactions could also be beneficial because you will not be able to exceed the amount you have on you.
Be Sure Your Spending Habits Match Your Financial Priorities
Everyone has different priorities and comfort levels when it comes to spending the money they have earned. Perhaps you have the money in your budget to continue spending on small expenses, but are curious how much you would save if you cut back. If you are trying to pay off debt or put more money into savings, however, you will most likely need to make some adjustments in your spending habits. The impact of starting with small changes may have you surprised. You could realize it may not take an extra job or overtime to meet your financial goals.