Have you ever wondered why people don’t save more? Or better yet, have you ever wondered why you can’t save more?
If you continue reading, I’ll tell you why.
The Economy Does Not Prevent You from Saving
It’s extremely easy to blame our lack of savings on “the economy.” Regardless of your age, you have undoubtedly been affected by the Great Recession. Unemployment remains high, taxes are increasing, and prices are rising. This is hardly an environment that will increase our savings.
But, if we are being honest with ourselves, the answer is much simpler than the macroeconomic variables listed above. The reason is not macro at all; it’s micro. The reason we cannot save is…us.
Embrace Change to Keep Change
Increasing your savings typically requires change. I’m not talking about the change in your pockets, either. It requires change in your habits and it requires changing your behavior.
THAT is why increasing our savings is so tough. And THAT is why we fail.
For example, when is the last time you read something like this:
Pack your lunch everyday and stop eating out!
Does this sound familiar? Of course it does. It’s included in every saving and budgeting “how-to” on the internet! But, doesn’t everyone already know that? Is it surprising that paying someone else to cook for you costs more money than cooking yourself? I would guess that 10 out of 10 consumers know that dining out is more costly than dining in.
So why do financial “experts” continue to pound this into our fragile brains? Because it’s important! If you REALLY want to increase your savings, then some sacrifices must be made.
But, it’s possible to save without changing your habits and behavior. I will actually give you 10 ways to save money without changing your habits and behavior. You will NOT have to STOP anything that you’re doing. You will NOT have to make any sacrifices. And most importantly, you will NOT fail.
All that is required is a maximum of 10-20 minutes per suggestion. With a little research and minimal effort, you can save hundreds of dollars.
10 Ways to Save Money Without Changing Your Habits and Behavior
1. Review your Cell Phone Plan
I am NOT asking you to STOP texting because that would require change. I’m simply asking you to see how many minutes you’re using and how many text messages you’re sending to ensure you’re in the most optimal plan. I was able to save $20 by reducing my data package. I was also able to save $20 by reducing my minutes. If you are maximizing your plan, then don’t change. The penalties for going over would offset any savings.
2. Review your car insurance
I am NOT asking you to drive less or reduce your coverage because that would require change. I am simply asking you to research how much you can save by switching insurance companies. There are several car insurance comparison websites where you can quickly compare quotes. Look for opportunities to bundle (home, auto, etc.) insurance policies together for maximum savings.
3. Review your Bank Accounts
For the most part, if you are incurring overdraft fees from one bank, you will incur overdraft fees from another bank. But, there are several bank fees that are not uniform across all banks. For instance, if you prefer to use an ATM – find a bank that reimburses foreign ATM charges. If you carry a low balances, make sure you’re not being penalized for falling below a certain threshold. Not all banks are created equal, so find one that best fits your needs.
4. Review your Credit Card Rewards Programs
My wife and I received $3000 cash back from our credit card rewards program. That is a significant chunk of change. Shop around for a card that offers the best rewards for the categories you spend the most on. A lot of cards will offer 5% cash back on rotating categories. If you’re not keeping up with the changing categories, you may only receive 1%. I love the idea of redeeming rewards points into a savings account. Remember, though, if you’re spending, you’re not saving.
5. Refinance your Mortgage
Thanks to our buddies at the Federal Reserve, interest rates have been at all-time lows. Even if you refinanced your mortgage a few years ago, it could still be beneficial today. Don’t be afraid to crunch the numbers yourself and see how long it will take to recoup any closing costs.
6. Review your Life Insurance
When was the last time you reviewed your life insurance policy? For most people, it’s never. Mortality tables may have been updated since you initially signed up. I have personally reviewed many outdated policies where the client either reduced their premiums or increased their death benefit (while keeping the cost the same).
7. Open a Flexible Spending Account or Health Savings Account
This is the most under-utilized tax-advantaged account I have seen. If you contribute to a FSA or HSA, you can make the usual purchases you make, but you’ll be paying with pre-tax dollars. This could mean a savings of 15-30%.
8. Balance Transfer a Credit Card Balance
Don’t be afraid to open up new lines of credit. If, for whatever reason, you’re carrying a credit card balance, then think about transferring the balance to a 0% credit card. There are a lot of good offers if you shop around. Although a creditor may be offering 0% on the balance, look for any additional balance transfer fees (which can run up to 4%).
9. Review your Health Insurance
You may have limited options here depending on your employer. If your employer offers multiple carriers for health insurance, make sure you read through the various options. It’s a natural tendency to choose the most expensive option because it provides the most coverage IF something happens. But, if you’re a healthy person, you’re probably spending more than you need to. If you have a spouse, make sure you’re comparing both employer’s options.
10. Ask for a Raise
Out of the 10 ways to save, this is probably the most difficult because it requires an uncomfortable conversation with someone that you’re close with. It won’t be uncomfortable if you go into the conversation prepared. Companies want to keep talented employees and turnover is extremely expensive. If you don’t have specific achievements that you can highlight to your manager, try obtaining an offer from a competing company. After all, one of easiest ways to save more money is to have more money to save.
Readers: Do you have any other ways to save without changing habits or behavior?