9 Easy Ways to Save Money and Gain Financial Freedom
Personal Financial Advice
Are your finances controlling your life instead of you controlling your finances? Do you want financial freedom?
Here are nine easy ways to help you save money and gain more financial freedom.
Do you know all those e-mails, texts, or catalogs you receive with "Summer Sale" or "25% off your next order"? Have you ever opened an e-mail, and an hour later, you have added over $100 to your cart all because it said "Buy $100 get $25 off"?
These are advertising schemes to convince you to buy something that you probably did not want, let alone need until you saw the advertisement.
Remove the temptation to make unnecessary purchases by unsubscribing from all advertisement e-mails, texts, etc.
2. Pack Your lunch
Going out to lunch can be a coveted moment for yourself or a time to connect with co-workers, but it can also put a hole in your pocket. The cost of buying lunch typically costs between $10-$15 a day.
Let's do a little math and assume you spend $10 a day on lunch five times a week for fifty weeks a year. The total cost would be $2,500.
Imagine how much you could save if you packed your lunch a few times a week.
3. Make Your coffee
Picking up coffee on the way to work or for a mid-day pick-me-up is convenient, but all those small coffee purchases add up over time.
If you use the same example as above but assume you are spending $5 a day on coffee (instead of $10 on lunch), the total cost would be half or $1,250. With $1,250, you could purchase a Keurig to keep at your job and K-Cups for a year and still have nearly $1,000 leftover.
You may not be a barista, but saving over $1,000 should at least make you consider pressing the button on your Keurig.
4. Cancel Recurring Services
Recurring services are ongoing services that typically require you to provide payment upfront and automatically charge you on a monthly, quarterly, or annual basis.
Netflix, Hulu, HBO Max, Disney Plus, Amazon Prime, Spotify, Stitch Fix, Winc, Barkbox, Express Style Trial, KiwiCo, Daily Harvest, and HelloFresh are all examples of recurring services.
Although, there is nothing inherently wrong with signing up for a service that you intend to utilize. We often sign-up for "free trials" and forget to cancel or have more options than we can use. Paying for something you are not using is like throwing away cash. I would be happy to give you my address if you are into that sort of thing. I'm kidding! But really, let's stop wasting money every month by not canceling a recurring service.
Decide which services you use and cancel the rest.
5. Build an Emergency Fund
Benjamin Franklin said, "If you fail to plan, you are planning to fail." Often, our most expensive purchases come from failing to plan. It could be failing to plan for major expenses like unexpected car repairs, home repairs, or medical expenses. Or it could be less significant, like going on a vacation without a budget. But we can plan on life giving us a lemon at some point.
An emergency fund is important because it conserves funds for unexpected situations that require immediate cash. Often when we do not have the funds available to pay for unforeseen expenses, we are forced to borrow, leading to more stress and less financial freedom.
Start building an emergency fund today. A general emergency fund should be enough to cover three to six months of your expenses.
6. Coupon (But Not Extreme)
One of the easiest and most practical ways to save money is to use a coupon. This method works best when you know what you want to purchase or your shopping online because you can use the internet to search for a discount. My two favorite methods are to use a free service like RetailMeNot that provides you a list of available coupons for a particular retailer or subscribing to a retailer's e-mail on their website to receive an instant discount (but make sure you unsubscribe afterward).
However, if you are out and about and have a smartphone, you can download RetailMeNot's app and check to see if there are available coupons. Just search the store name, and a list of available in-store and online coupons will populate for you.
Most vendors offer coupons, and spending a minute or two looking for one will almost always save you a few bucks.
7. Pay Off Your Credit Card, Avoid Late Fees, and Do Not Overdraw Your Bank Account
Credit cards can be a terrific way to earn cash back, airline miles, or hotel rewards, but paying interest is a terrible way to spend your money.
According to the Nerd Wallet article, "2020 American Household Credit Card Debt Study" by Erin El Issa, the average American household carrying credit card debt will pay on average over $1,200 in interest, with the expense rising to around $1,500 if self-employed. That is a lot of money in the garbage.
In addition to credit card interest, late fees and overdraft fees can also accumulate and consume your cash.
Create reminders on your phone or calendar to remind you to pay your credit cards on time. And monitor your bank account frequently to ensure that you do not overdraw your account.
8. Commodity Comparison Shopping
Comparison shop annually for commodity services such as internet, cable, cellphone, and auto insurance to determine if your current provider or a competitor is offering a better price.
While this process may take more time, savings on commodity services can be significant. And because they typically cannot be discontinued, they are likely to save you more money in the long term.
For example, after reviewing my internet bill this year, I reduced my payment by $20 a month and improved my internet speed by taking advantage of a promotion my current provider was advertising online. This small amount of effort will save me over $200 a year.
Taking the time to compare pricing for commodity services can save you a lot of money in the long term.
9. Do Not Make Purchases on Credit That You Cannot Afford
The absolute best way to save money is to not spend it. But that advice is about as helpful and healthy as telling someone the best way to lose weight is not to eat. Saving money and having financial freedom is not about deprivation. It is about making choices that fit our budgets and align with what we value.
However, unless it is an emergency, do not make purchases on credit that you cannot afford to pay for with cash. As mentioned in number eight, carrying credit debt can cost thousands of dollars in interest each year.
Assume a couch is on sale for $1,000 instead of $1,200, so you buy it on your credit card. But you do not have the cash available to pay off your credit card, so you do not make any payments until next year. If your interest rate is 15%, you will pay over $150 in interest. Thus, the couch you purchased on sale has now cost you about the same as the original amount because you did not have the cash available to pay for it.
Bottom Line: If you cannot afford it with cash, you cannot afford it with a credit card.
For more financial life hacks, check out catchafrisbie's article on how to make money with bank promotions below.
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