If you want to have more control over how much you save and want to aggressively save money, here are 13 different ways that you can do so.
It is just as simple as it sounds. If you want to save $500 per month when your paycheck hits your bank account have an automatic withdrawal set up to transfer $500 to your savings. Then learn to live on the rest.
That sounds easy, but most people don’t do this. The average American waits to pay themselves at the end of the month. This is why the average American household has only $8,863 in savings!
Do something for yourself, and pay yourself first! You won’t regret it!
Investing your money goes hand in hand with paying yourself first. Did you know that the current yearly rate of inflation of the US Dollar is 1.68%? That means that next year it will take $1.02 to buy what it only took a dollar this year!
That doesn’t seem like a big deal, but let’s use some bigger numbers. Let’s say you have an emergency fund of $10,000. Next year that same emergency fund will only have the buying power of $9,800. That puts you on the wrong side of compound interest.
Alright, so now what? You know about inflation, and know it is bad but what do you do about it?
Invest your money!
I would recommend looking into a few things right off the bat. Does your work have a retirement plan? Are you contributing to it? Those are some of the easiest ways to start investing.
If not, I would recommend researching into areas of investing that sound interesting to you. Here are a few types of investments to begin researching:
Stocks (Index Funds) Real Estate Bonds Crypto (only put in what you are absolutely willing to lose)
No matter what you do, make sure to invest somehow. In 10 years you’ll be happy that you did!
This tip is right up my alley. I have had side hustles for as long as I can remember! I’ve had a newspaper route, sold candy at school, done landscaping, done freelance work, started a blog, etc.
If you are willing to put in the work, you can easily make an extra $1,000-$2,000 a month by getting a job after hours and on weekends.
If you are more entrepreneurial then you can also start your own business instead of working extra for someone else. The richest person I know started his own business and is now building a vacation home in Hawaii for the fun of it.
One of the side hustles that I can recommend starting is a blog. I have thoroughly enjoyed working on Pineapple Money.
Here’s a guide I wrote to help you get started. If you have ever wanted to start a blog there’s no better time than today!
To top it off, here is a list of a few articles we have written about side hustles.
We have a budget that helps us allot money into different categories and slowly ratchet down the amount of money we spend in each category. You should be budgeting very aggressively if you want to be saving aggressively. Every dollar every month should be accounted for.
We are currently working on a free budgeting guide to help others get educated on where they are spending their money. Stay tuned!
Let me clarify this, I think you should get out of bad debt. If you have a mortgage that’s under 4% on a reasonably sized home, that’s fine. If you have a jumbo loan on a mansion that you don’t really need, then that’s a different story.
The Debt Avalanche is paying off the debt you have with the highest interest rate first and then paying off each debt in order of the amount of interest you pay on it. The Debt Snowball is paying off your lowest amount owed and then paying off the next lowest amount owed until you are out of debt.
I prefer the Debt Avalanche because it saves you more money in the long run. However, it usually does not provide as much motivation and inspiration as the Debt Snowball.
In the end, it doesn’t matter what method you choose, as long as you are paying off your debts.
Tip: Look for a credit card with an introductory 0% interest rate and move your balance there while you pay it off.
This tip is fairly self-explanatory. If you don’t know where your money is going how are you going to save aggressively?
If you aren’t tracking your spending at all, I would recommend getting either an app like Empower to track your spending or get a good old spiral notebook. If you choose the notebook route, make sure to place it next to wherever you enter the house from. Every time that you spend money, you have to write it down in that notebook.
Quickly you’ll realize how much you are spending because you’ll be turning to the next page of the notebook after only a few days into the month. This will help you be able to start a budget because you’ll actually know where your money is going and what you spend it on.
Normally I focus on increasing my earning potential over cutting down expenses, but sometimes reducing expenses is easier than earning more.
It can become a game at times to see how much you can save by cutting out expenses. Currently, we don’t pay for any streaming services and we don’t miss them at all.
A few things you can do to cut down on living expenses:
As I have gotten older my number of windfalls has increased.
A windfall is any unexpected money that you end up receiving. An opportunity for consulting work, your tax return, or a bonus from work are all great examples of windfalls. Most of my friends use these opportunities to book a cruise, buy a car, etc. I would recommend instead saving that windfall. Better yet, you should invest it.
So you’re saving money, but you want to get the best interest rate you can. That’s where High-Yield Savings Accounts come in.
The average bank account pays you next to nothing for the privilege of watching your money for you. If you use an HYSA you can get way better interest rates. If you are willing to put in the leg work, you can follow the Financial Panther’s guide on how to get 5-6% interest from a few different HYSAs!
We have always cooked a lot at home, and we have gotten even more experience at it lately. If you calculate that the average meal for a single person eating out is $10, and you most likely eat out three times a week, in a month you are looking at $120 in eating out.
If you eat out at a sit-down restaurant you are most likely looking at $40 per visit, and if you go out to eat at a sit-down restaurant every week, that’s $160 a month.
Now, if you instead cooked at home for all those meals, you’d have delicious food at a much cheaper rate per meal. There are usually leftovers as well. I can honestly say Chelsea makes some of my favorite meals!
Did you know that the average worker now stays at a job for 4.6 years? I know in some industries it is as low as two years. Unfortunately, it seems like the best way nowadays to get paid more is to find a new job.
If you get a new job making 10% more than your previous job, that makes saving 10% more a whole lot easier. As I have progressed in my career, we have tried to keep our living expenses low so we can continue to grow our savings rate. With every new job, we have been able to increase our savings rate with less and less effort.
This one is huge for us! We try to go and do things as much as possible. We go for walks in cool parks, play pickleball in public parks, go to free events, etc.
Check out your local library for passes to local events and attractions. You’d be surprised what the library has to offer. Some libraries now have maker spaces inside them with 3D printers, machinery, etc.
If your job allows it, working overtime is a great way to save extra money. You already know how to do your job, and a lot of the time overtime is paid at a higher rate than your normal wage.
It might not sound like fun, but another benefit of working overtime is that you won’t be out spending money while you are working. Getting a few extra hours a week can greatly boost your savings rate!
No matter what you do to save aggressively, the important thing is that you are doing it. With the 13 tips above, you’ll be able to increase your savings rate in no time!