25 Ways To Save Money And Feel Good About It

“He who will not economize will have to agonize.”  Confucius

To make more money, we need to learn how to spend less, save more and investment wisely.

As the number 1 economic power in the world, the US is a consumption-oriented country, programmed to spend more, which fuels our country’s growth. Among its OECD country peers, the US is not dead last (we are ranked 22nd of 36 countries in 2015) but we are in poor company with Greece and Portugal at the bottom. Anyone remember those countries’s woes?

How we spend now differs dramatically from 1901 if we look at our major spending categories as a percentage of total expenditures. The average family in 1901 included nearly five people, had an income of $750 and only 8.5% of US households reported earnings from wives, while 22% of earnings came from children, 23% came from boarders and 14% came from other sources. The US economy was expanding in 1901 following a recession that ended in 1900. Of course life expectancies were lower in 1901, with males expected to live 47.6 years versus females’s life expectancies at 50.6 years. In 2016, life expectancy for males was 76.1 years compared to females’ 81.1 years in 2016.

According to the US Labor Statistics special report, consumer spending in 1901 as compared to 2017 was as follows:

  • 42.5% of total spending went to food, the largest category in 1901 compared to 12.9% in 2017, with nearly 44% of that amount spent for eating out of our home. This is by far the largest difference in spending.
  • 23.3% of total spending was for housing in 1901 compared to 33.1% in 2017. A fun fact: New Yorkers housing expenditures were in line with the rest of the country but Massachusetts spent nearly 30% in 1901.
  • 14% of total spending went to apparel and services in 1901 versus 3.1% in 2017.
  • 5.2% of total spending was for healthcare and insurance in 1901 compared to 8.2% in 2017, however, that does not include personal insurance which is combined with pensions and likely understates 2017’s healthcare allocation.
  • Only 1.6% of spending was allocated to entertainment in 1901 when labor conditions were significantly longer, harder and not yet benefiting from improved working conditions and laws compared to 5.3% in 2017.

How we spend impacts our personal savings rate and our ability to be comfortable in our lives now and in the future. The US personal savings rate was an improved 7.6% in December 2018. The rate is measured as a percentage of disposable personal income or DPI. You can look at DPI as what you have left after money spent for your basic needs and your income taxes are paid.  Our personal savings rate has been as low as zero in the third quarter 2005, and in the low-mid single digits since then. Our savings rates were in the double digits in the early 1950s and 1970s, with the inflation rate playing a role.

How we think about money has many influences

We have different attitudes about saving money depending on our background, current financial situation and our psychological makeup regarding self-control, fear of economic uncertainty, and pessimistic-optimistic outlook. Someone with modest means often knows better where their dollars are coming from and going as compared to those from affluent means. A 1% annual increase in your savings rate invested wisely at an early age is likely to be a significant nest egg 40 years hence. Targeting a personal savings rate in your household should be at least 10% with a long term goal of 15%. Besides savings, there are environmental reasons for many of the costs we eliminate, such as plastic bottled water.

Anyone recall saving at a young age in a bank account? I do. My classmates and I were encouraged to bring in a few dollars to save every month. This was an educational project between Dollar Savings Bank and our Bronx elementary school sanctioned by parents. We would bring in a dollar in a yellow envelope. I recently found my savings passbook. At a young age, learning how to save was a lot of fun. And it can still be fun if we embrace the challenge to making saving a household priority, especially earmarking money first for yourself as an emergency fund that has an ample amount to cover your most basic needs for 6-8 months. Savings at tax time can be a great starting point for many families as it may be the largest check you will receive all year.

How can we save more money?

Let me show you the ways:

  1. Brown bag your lunch for work. It’s cheaper and healthier. The alternative can cost $50/week and $2600 per year. With these savings you can pick your spots for eating out with friends and family.
  2. Use your local library for books rather than buying books for Kindle or your shelves. I have always loved reading and have spent a big part of my free time reading and writing reviews on Goodreads.  Nothing beats our wonderful small town library where the local librarians know us by our first names, save books for us they think we will like. And I share my reviews!
  3. Don’t buy music if you have Amazon Prime (we are huge fans). We also use the free versions of Spotify and Pandora.
  4. When you vacation, strongly comparison shop for low airfares and try Airbnb. Depending on the location, Airbnb is a great way to save money when travelling with kids and one hotel room is simply not going to cut it.
  5. No more plastic bottled water. Use tap water instead. Although improved, not all plastic bottles are fully BPA-free plastic. The bottled water doesn’t stay cold long and gets suspicious bubbles. Our family drank more than 200 bottles of water per month for over $1200 of annual costs. So we all went out and got our own steel insulated bottles. I have the 32 oz. Takeya which keeps the water cold significantly longer.
  6.  Stop drinking carbonated water and soda, especially in restaurants. These are high margin items for them but not healthy for us and certainly relatively expensive.
  7. Cut out some of the lattes. During my years going to law school as an adult, when we had young babies at home, I literally lived, drank lattes and ate meals at Starbucks for the 8-9 months of school plus studying for the bar. Besides the weight gain and jitters, it was not unusual to spend $400 or more per month, over $3500 per year.
  8.  Eat out less and more targeted. Buy a crock pot and Instant Pot. They have been essential in cooking more, faster and cheaper. Having worked crazy hours on Wall Street, I never ate at home because i never cooked. With kids, it is easier to eat at home and learn how to cook more. We eat home more now. We eat out judiciously and enjoy our special times eating out with great friends and family. Alternatively, we have done a lot more communal cooking at friends’s homes and in ours.
  9. Shop for groceries wisely by doing price comparisons. We have far more competitive choice in grocery shopping now than in the past and that should only get better with Amazon and Walmart entering the fray. Try groceries you have never been too like Aldi’s, Price Rite and Shop Rite.  We arbitrage our shopping outside of the city in farmer markets or buying our groceries out of town where prices are often lower. We shop at Costco for big bulk non-perishable items but found some spoilage when buying too much food. This is a bit sinful for my taste.
  10. Make use of coupons and organize them well. Ebates, Ibotta and Coupons.com are among a growing group for groceries and household items. Also, use store loyalty apps allow you to download coupons.
  11. Buy generic brands for consumer products whenever you can for food, household, pharmaceutical items. They are almost always cheaper than the widely recognized brand name and logo which costs those companies a lot of marketing costs. Many times the generic brand is same product as the brand name but private labelled. Think Kirkland, Costco’s private label.
  12. Comparison shop for gas. A small savings of $0.25 per gallon could amount to $50 per year.
  13. Pay your credit card bills on time to avoid late fees. This could amount to hundreds of dollars of costs saved and not wrecking your credit score. And don’t just pay the minimum monthly amount. Pay it in full when you can.
  14. Don’t buy everything you want immediately. Give yourself the time to research the product online and read reviews especially if it is a new and expensive product for you. I often enjoy the hunt and search part of buying new things and it helps to confirm my purchase bias.
  15. For recurring prescriptions, call your insurance company to ask for prices if you opt for their mail order program. There are usual cost savings and more convenient.
  16. Refinance your home mortgages when interest rates decline or are already low compared to what you are paying monthly. If you have many years left on your mortgage it is usually is a wonderful benefit. If you are able pay down your mortgage if it is at a rate above 6%.
  17. Lower the temperature at home by at least two degrees in the winter and turn it up by the same in the summer. Wear a sweater when it gets cold. The monthly savings are noticeable.
  18.  Use less ingredients than what recipes call for. You can always add for tasting purposes. My pet peeve with my kids: they pour humongous amounts of dressings on their plates and in their bowls and then it gets unused. I am aghast as the amount of ketchup that goes into a bowl of baby carrots. It looks like soup! Really gross. I digress…
  19. Use less detergents as they are sold in concentrated amounts and will get your clothes perfectly clean. Alternatively, check out YouTube or other postings to learn how to make your own detergents.
  20. Unplug less frequently used appliances. Most homes use more 40 appliances in their homes. These account for about 10% of our energy bill. You will not only save costs but plugged appliances can be a fire hazard.
  21.   Learn how to do more things on your own without outside help. You can make your own cleaning supplies or bleach solutions. There are videos for learning how to repair, clean, and make things in our home. We bathe our dog Kelly in our bathroom and she seems to enjoy it over going to the groomer. Our wallet likes it also.
  22. As your light bulbs burn out, consider replacing them with compact florescent lamp (CFL) which are longer lasting and more energy efficient.
  23. If your healthcare plan offers a flexible spending account (FSA), take advantage of it. You put a certain amount of pretax money in the account to pay for certain healthcare costs, notably copayments, deductible costs, some drugs and other healthcare items. You don’t pay taxes on these costs so there annual tax savings that can be meaningful.
  24. Defer any employee compensation up to its limit especially if your employer has a 401K match available.
  25. Enjoy more of the free things in life with your family where you live and when you visit. Depending where you live, take advantage of your parks, sights, special museum days, and your transportation system (rather than  UBER). Take more walks, take trams, take boats.

Even in NYC, the most expensive US city after San Francisco, there are free or inexpensive things to do.

Every major city, town or village has its own charm. Take a ride outside of your city to  the mountains, lakes and rivers .

In NYC, depending on the season, visit the Brooklyn and Bronx Botanical Gardens, the Bronx Zoo, tour the Federal Bank of NY for its gold vault and our earliest currencies,  Alexander Hamilton’s Harlem Estate (Hamilton Grange) and while there visit the Harriet Tubman statue, Bryant Park’s outdoor movies (summer), listen the fabulous music on the subway platforms, Chelsea Galleries, NY Public Library, walk around Central Park,  9/11 outdoor memorial, distillery tours, get tix for the Tonight show, Grand Central Terminal and its awesome clock, and among my favorite, ride the Staten Island Ferry. And while you are on the ferry, make sure to wave to our wonderful Statute of Liberty…she has seen the throngs of our immigrants that have come here and helped make our wonderful country great!

With some imagination there are many different ways to save money. It feels good to experience the accomplishment of saving money for investments, a vacation, a car, or something in the future.

How are you saving your money these days?

How about starting your own business part time?

Related post: Pros And Cons of Self-Employment

Please share your experiences and thoughts with us. We would like to hear from you!






















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