8 ways to save money — fast

In fact, according to a recent Prudential survey, over half of the nearly 4,800 consumers surveyed had less than $500 saved — or no savings at all.

If you’re in a similar boat, there’s still hope. Here are eight ways to get your savings efforts on track — fast.

8 ways to save money fast

There are many ways to save money – and some of them only require a simple change in habits, e.g. B. reducing certain expenses or changing where your money is kept. Finding ways to increase your income, even slightly, can also be helpful.

1. Change bank accounts.

One of the biggest benefits of a savings account is that it allows you to earn interest on the money you save. However, interest rates can vary widely from institution to institution, so you may be able to increase the rate at which your money earns interest – and how quickly your balance grows – simply by switching banks.

“Switching banks can be a hassle since almost everyone has automated paycheck deposits and bill payments set up on their existing accounts,” says Liz deSousa, board-certified financial planner and principal financial advisor at Running Point Capital Advisors. “But the time and effort that goes into switching banks and getting automatic deposits and payments back on track is often worth it for the positive impact it has on your savings.”

Opening an online savings account can also be beneficial.

“If you don’t want to switch banks, I’m a fan of having an online savings account in addition to traditional physical checking and savings accounts,” says deSousa. “Online banks can offer higher interest income because they don’t have the costs and overhead of managing traditional bank branches. They are a great place to park excess cash and save for the long term.”

Some banks also offer bonus funds and other incentives for new account holders. These offer another opportunity to increase your savings.

2. Be strategic about your eating habits.

Changing the way you eat — and shopping for your meals — can also save you more. Data from the US Department of Agriculture shows that most people spend over 10% of their disposable income on food – almost half of that eating out.

“One common area that many people overspend on is dining out,” said Stuart Boxenbaum, board-certified financial planner and president of Statewide Financial Group.

If you’re someone who shops or eats out often, creating a detailed meal plan and making some strategic grocery purchases can help you reduce this habit — and, more importantly, increase the amount of money you need to save.

“One of the easiest ways for consumers to save money quickly is by grocery shopping,” says Boxenbaum. “Wherever you buy your groceries, there are always two choices: branded or generic. If you check the ingredients and know you’re getting the same base item, you can typically save 25% to 33% or more by buying the generic version. That can add up quickly.”

3. Change your insurance.

Insurance premiums can account for a significant portion of your income. The average home insurance premium is nearly $1,300 per year, and the average auto insurance premium is just under $1,200. Fortunately, there are ways to reduce those costs and free up more money for savings.

One option is to increase your deductible. According to the Insurance Information Institute (III), increasing your auto insurance deductible from $200 to $500 can reduce your premium by up to 30%. With a $1,000 deductible it would be a 40% or more reduction. For example, if you started with a $200 deductible and a $1,200 premium, but switch to a plan with a $1,000 deductible, you can lower your premium to just $720 per year or less.

It can also be helpful to shop around and compare insurers. Many insurance companies also offer premium discounts for good credit, participation in a driver training course or a clean driving record. You can also save by purchasing multiple policies – such as your car, home and life insurance – from the same insurer.

4. Ask for a raise – or start looking for a job.

Increasing your income is a surefire way to save more money. Research what others in your position are making annually and consider a raise if it’s more than your current salary.

You can also look for a new job. Several studies show that changing jobs can actually get you a bigger raise than just asking for a raise. For example, a study by ADP shows that workers who remain in their jobs see a 7.3% annual salary increase, while those who change jobs enjoy a 15.4% increase.

According to another study by Pew Research, 60% of workers who changed jobs between April 2021 and March 2022 saw a pay increase. Only 47% of workers who stayed in the same job could say the same.

The bottom line is, it’s hard to save money if you don’t have it — no matter how many expenses you’re trying to cut back — so if you’re living paycheck to paycheck, it may be worth fighting for a raise or seeking one higher paying job. This way, you can cover your expenses while still having money left over to save, pay off debt, or even invest for the future.

5. Consider a side hustle.

In addition to a job change, you can also add a second job – even just a small appearance or part-time job. That can mean creating a passive income stream, driving for Uber, DoorDash, or Lyft, completing tasks on Fiverr or Taskrabbit, or signing up for a website that takes you through polls, voting, watching videos, or testing usability monetizing sites can do other activities. Examples include Swagbucks, Amazon Mechanical Turk, and Branded Surveys.

If you own a home, you can also rent out all or part of your property on VRBO, Airbnb, or a similar platform. In 2021, the typical Airbnb host made nearly $14,000.

Depending on the characteristics of your home, there may be other ways to earn more as well. For example, if you have a pool, you can rent it out on Swimply, while additional storage and parking can make cash on sites like Neighbor, SpotHero, or Spacer. The average spacer host brings in around $200 a month, according to the platform.

6. Take advantage of a credit card that offers rewards.

Many credit cards allow you to earn rewards or even cashback, which you can then invest directly in savings. Cash back rates can range from 5% to 8% depending on the card issuer. So if you use the card frequently, it can increase your savings significantly.

“Use the card for everyday purchases like groceries or gas,” says Sean K. August, president of August Wealth Management Group. “Then pay the balance in full each month to avoid interest charges.”

That last part is key, since a balance on your credit card will only increase your spending — and decrease your savings — over the long run. It could also affect your credit score.

7. Change your transportation habits.

Transportation can be expensive. Not only are there car payments and car insurance to keep up with, but gas is also expensive. According to JD Power, the average American spends about $5,000 on gasoline each year.

To reduce those costs — and free up more for savings — consider using public transportation whenever possible. Doing this daily for work would probably have the greatest impact, but using public transport occasionally can also help.

Carpooling — to work, to school, or even for extracurricular activities — can also be an option. The exact amount you can save depends on the type of car you drive, the distance you drive, and how often you carpool. However, on a mid-size SUV, you would save about $1,400 a year by reducing your annual mileage from 20,000 to 15,000. Reducing the mileage to 10,000 would save you nearly $2,800, according to the American Automobile Association.

8. Cancel subscriptions you don’t really need or use.

Make a list of all the subscriptions and memberships you have. This can include things like streaming services like Apple TV, Spotify, Netflix, and Hulu, as well as things like gym memberships and subscription boxes. Note the cost of each service and how often you’ve used it over the past few months.

If you haven’t used something recently, consider suspending the subscription or canceling it altogether. This frees up funds that you can save – and start earning interest.

“Also, be sure to cut back on services that are duplicating themselves — like streaming music and video,” says deSousa. “They probably don’t need Apple Music, YouTube Music and Spotify and could save $10 to $20 a month.”

take that away

If you want to increase your savings and make sure you have enough stashed away for a rainy day, think of ways to increase your income – at your current job, in a new position, or even by adding a part-time job. Cutting costs and putting those savings in an interest-bearing account is also a good practice.

As deSousa puts it, “Studying expenses, big or small, can be immensely helpful in removing financial burdens and making people feel like they’re achieving their goals.”