Seven Things To Do NOW To Start Saving Money
One of the most common questions I get asked is “How did you save so much money for this trip?“. I wish there was a perfect answer to the question, but the truth is that I used a combination of many methods to save money. I will be posting many tips we used throughout our trip, but for now, here are seven things you can do now to start boosting your savings:
1. Get serious about saving and set goals
It doesn’t matter if you are saving for a trip, a car, more schooling, or something else, the biggest thing to remember is if you aren’t serious about saving, then your account will never grow. Sacrifices need to be made, and you need to stay honest with yourself about what you’re spending. I recommend signing up for Mint.com and adding your bank accounts and credit cards to their program. Mint.com tracks both your income and spending daily, and gives you monthly reports on where your money is going. You can also set goals in Mint.com and track how you are coming along, and project when you are on pace to hit each goal. I actually used Mint.com’s goal setting feature to choose my departure date over a year beforehand.
2. Utilize auto-withdrawals
You can’t spend money that you never had. Most direct-deposit payroll systems allow you to deposit money into more than one account. I set up my paycheck to automatically send a percentage of my check to be deposited directly into a separate travel savings account. As I continued to get good at cutting my cost of living, I continued to up the percentage that went into the travel account. This is the fastest and best way to force yourself to save, and this is where the majority of money is coming from that I am using on this trip.
3. Cancel your cable and share your internet
The cost of cable/satellite tv continues to rise, and before I cancelled mine it had become one of my biggest monthly expenses. I don’t know what the better benefit of canceling cable is: saving money, or wasting less time in front of the TV. There are so many more alternatives than cable to watch TV. There are a lot of online options, many of them free, as well as cheaper subscription options like Netflix or Amazon Prime.
As for internet, get together with a few neighbors, upgrade to a high-end wireless router, and share the internet connection across a few homes or apartments. This can cut your internet bill by over 50% instantly, maybe more if you live in an apartment complex and can share with 4-6 units. Canceling cable and sharing internet can save you over $1,200+ a year.
4. Stop eating out, and when you do eat out, be smarter.
Mint.com helped show me just how much I was spending on eating out for both lunches and dinners. I probably cut back more on eating out, than any other category. Start focusing on dinner recipes and meals that make large amounts of food that can be easily transported as left-over lunches. Casseroles, pastas, soups, chilis, etc. And when you do eat out, limit yourself to one drink, or better yet, don’t drink at all. A $20 dinner can turn into a $50 dinner after two beers and two glasses of wine are added to the bill. I started getting real “cheap” this year and would order only one entree for the people or two entrees for four people. (something my grandparents would be proud to hear!).
5. Stop going to the coffee shop
I am a big fan of coffee, but only good coffee. I had never liked homemade coffee, and this was one of the hardest things to give up. However, there were some things that helped me make the transition to making my own coffee. It starts by making sure you are making coffee the correct way. Invest in a good coffee maker that brews coffee at the right temperature, use filtered water when brewing, buy good coffee beans in bulk, and grind them fresh each time. The biggest tip I can give you to make your coffee taste like Starbuck’s is to USE A LOT OF BEANS. However many beans you’ve used in the past, double it, and you’ll get better tasting coffee every time.
6. Start an online stock brokerage account
On top of your regular savings account, you should also have some more aggressive options like a brokerage account. I use Scottrade, and at $7 a trade, it’s a pretty good deal, but E*TRADE and Charles Schwab are also good. If you’ve never bought stock before, just sign up for a one-day class at a Scottrade office and learn how it all works. What I like about brokerage accounts is that it makes investing and saving more fun. You can choose which companies you want to trust with your money, and as long as you do your homework on every stock purchase, you should be able to get a better return than a normal savings account interest rate.
7. Start selling your stuff on eBay
I have always been a big eBay user, but even I was surprised at how much money I was able to generate from selling stuff that I either didn’t use anymore, or that I can’t store during our trip. I hate clutter, and getting money for getting rid of items you don’t use anymore is a no brainer. Many times I would even get more for an item than I originally paid for it. I sold over 10 pairs of shoes, countless clothing items (especially sports apparel and jerseys), old cellphones, cameras, and electronics. If you haven’t used something in the last 12 months, sell it. I even bought a small shipping scale so I could weigh items and print shipping labels right at home. With that added convenience and efficiency, I’ve been able to make over $1,000 selling items on eBay in the last 12 months.