Statistics clearly show that Americans are poor money managers. This includes a study revealing the 62 percent Americans have no savings for rainy days. Interestingly, more than 50 percent of parents are not saving for the college education of their children. To make the matter worst, according to another study, 70 million Americans will have low to zero cash in a matter of 30 days.
The majority of those who want to save money every month most often realize that that they find minute ways to save. While small savings is good and an interesting start, the smartest ways to do is to find ways to save big. If you concentrate on the biggest savings first, you will be able to save thousands of money every year and will develop a habit of saving first before spending.
When you learn how you can benefit from the biggest saving strategies, then you can move forward to the smaller savings and check if you can add more to your usual savings. One of the biggest sources of savings that are often overlooked is on your groceries, credit, home, and car. We have a list below of the tips that you could do to save. Although it is not complete, these are some places where you can start saving big.
1. Avoid Impulse Buying
According to statistics, the majority of the families spend around $2,000 every year on things that are not on their list. In other words, these things are not planned and most often are products of impulse spending. There are a couple of ways to minimize these impulse purchases and rake thousands on your savings:
A. Stick To The List
In a study conducted by the University of Pennsylvania, it was revealed that people who have the ability to avoid impulse buying or spending can save up to 23 percent on their groceries. In another study, it was revealed that most families spend most of their money on food. A family consists of four members can dramatically save more than $2,600 every year by simply sticking to what on their grocery list.
B. Do Not Shop Using Credit Cards
In a research conducted by Dunn& Bradstreet, those who shop using their credit cards pay between 12 percent and 18 percent compared to those who shop using cash. Additionally, the study discovered that those who use credit cards tend to spend almost 200 percent as much on vending machines instead of cash. The global food chain McDonald’s, on the other hand, uncovered that their average customer spends 7 percent on food when using a credit card. On average, customers using cash only spend around $4.50, which means around 56 percent increase in their spending when they use credit cards.
There is a massive difference between shopping with $50 on your pocket and a $10,000 credit limit on your credit card. If you want to avoid spending on impulse try shopping with only cash or using a debit card. It will also help you stick to your budget and keep big savings. Following this tip can help an average family save around $3,000 every year.
2. Store Groceries and Avoid Going to A Grocery Store
If you buy during sale, store them up, and skip going to grocery stores, you can save around 25 percent on the groceries every year. If you do not go to the grocery store, you only live on what you have stored. Some could not do it for a month but if you are really willing to save big, start at a small pace. Do it one or every two months. Stockpile non-perishable grocery items but meat and bread can be frozen to make their shelf life longer.
3. Bring a Lunch to Work
The majority of professionals are not aware of how much they spend on simple but regular things like lunch. People often prefer to buy lunch instead of preparing them at home. What they do not realize is that many save a lot of money by cooking more for dinner and bringing the leftovers as their lunch to work on the next day. If this does not sound appealing to you, you can also make something new for your lunch. It is important to note that whatever you prepare at home will always be much cheaper compared to the things you bought at work. For instance, if you spend around $7 every day for your lunch, that would mean a savings of $1800 every year if you prepare your lunch at home.
4. Pay Your Credit Cards On Time
One of the best ways to accomplish huge savings is by paying your credit cards on time or better paying it off. If you have a $5,000 credit limit on your card that comes with a 19 percent interest rate, in a year, you are paying around $1,000 in interest alone. So, to save this much in a year, all you have to do is pay your credit card on time to avoid these interest charges and penalties. Most of us do not realize that at 19 percent every year for 5 years will save us around $750 for every $1000, a very huge saving.
5. Buy A Used Vehicle Of Good Quality Instead Of Owning A New One
Over the years, car makers are creating and developing more solid and better quality cars than they used to. Since there are many high-quality cars out there, this means that it is now less risky to purchase a used car. While it is important that consumers should scrutinize the used car before they finally buy it, it is worth noting that buying a new car could also mean investing in an asset that rapidly depreciates in value each year.
Personal finance host Dave Ramsey illustrated this well in his radio program. He said that a new car worth $28,000 will lose around $17,000 in terms of value after four years. It is the same as saying that you are tossing $100 every week out of your car’s window.
Buying good quality used car is a practical choice and a smart one when you want to save big. There is a great chance that you can save thousands of dollars purchasing a used one that might still be under warranty. You can find cars like these by paying a visit to your local librarian or one different car sites online.
Aside from saving money from buying a used car, you can keep the vehicle for 15 years. According to a study conducted by consumer reports quality vehicles have a lifespan of around 15 years and do not have to undergo major repairs within that timeline. Having a good quality vehicle with great fuel economy will stretch your money. It will also help you save up for a new vehicle in the future so you can avoid paying car loan interest.
Other Money Saving Tips To Save Big Every Month
- Keep your loose change every day. Make it a habit to keep your loose change in a container or a jar at the end of each day
- Set a budget. Give yourself a daily or weekly allowance and stick with it.
- Avoid carrying a lot of cash or credit cards. This will help you avoid impulse spending since it is tedious to go to the nearest bank or ATM machine to withdraw money.
- Wait for a day or a week whenever you are planning to make a huge purchase. Any purchase that is worthwhile will always be there. Sleep on your decision and give yourself ample time to think it through. This will help you avoid impulse buying and will eventually help you save a BIG amount of money.
- Instead of purchasing coffee every day you can save more if you make your own. A $2 coffee per cup every working day could mean an expense of around $500 every year.