As the old adage goes: a penny saved is a penny earned. Whenever you put away some of your money, you’re essentially creating a source of “income” for the future.
For this reason, we should all be doing our best to put aside something whenever we can. It doesn’t matter how little you’re saving. Given time, pennies quickly turn to dollars and tens to hundreds. You just need to sustain the momentum.
In case you’re wondering where the extra money should come from, below, we look at 10 simple ways of saving $500 a month. The amount you can earn/save from each tip is indicated in brackets.
1. Dine in, not out ($120)
Americans love to eat out at restaurants. From date nights and dinners to coffee and everything in between, we’ll try every trick in the book just to avoid cooking at home. Last year, for instance, the average American family spent $3,008 on restaurant meals, with most families going out at least three times every week.
One of the easiest ways to put aside some money is to ditch that habit and start cooking at home. Considering that we, on average, spend $10 every time we dine out, preparing your meals at home can save you $30 a week translating to around $120 a month.
2. Use a cash-back reward credit card ($70)
There are plenty of credit cards out there that offer 2% cash back whenever you use the cards for purchases. Some even go up to 5% on special categories. This means that by putting all your purchases on a single card, you could end up saving hundreds of dollars over the month.
Take an example of a family that spends $3,000 each month. By paying for every purchase and subscription using your special credit card, the 2% cash back would earn you $60 without breaking a sweat. Factor in the 5% for special purchases and you’re easily making $70+ per month.
3. Drop the gym membership ($60)
This can seem difficult at first. But, when you have really pressing needs to fund, it’s always worth giving up the gym for a couple of weeks. The great thing is that you can go back and start lifting those weights again as soon as you’re back on your feet financially.
So, how do you keep fit during the period when you’re not signed up for the gym? Simple – exercise at home or engage in activities that demand energy. Options include; walking, biking, hiking, swimming and dancing. Alternatively, use at-home workout videos to stretch your body. Since the average gym membership in the U.S. costs $58, putting the brakes on this should save you around $60.
4. Find an alternative mode of commute ($200)
According to Experian, the average American family owns 2.28 cars! Cool, right? Not so much. On average, those cars require $3,000 worth of gasoline every year. The exact figure for 2012 was $2,912 according to the U.S. Energy Information Administration which works out to a whopping $242.67 per month!
By ditching the car and walking or biking to work, you could put all that money aside. Or, you can carpool or take the bus. The California Energy Commission has found that carpooling saves 30%, translating to $72 in savings per month.
5. Ditch cable ($100)
It’s true; cable TV was one of the best things to happen to humankind in the 90s and early 2000s. Without it, life would have been… well, too boring. But, do we still need it today? With all the online shows that you can watch for free, do you still need to pay $90 a month for cable? The answer is a big NO.
Unsurprisingly, that’s what’s happening out there. More and more people are quitting cable and instead subscribing to broadband internet. Why? Broadband internet is not only cheaper, but you also get more channels! If your broadband internet isn’t enough, purchase a digital decoder to complement it. You’ll save nearly $100 without missing a show.
6. Put a brake on the movies ($200+)
You might be surprised to hear this, but the average American spends $2,827 on entertainment every year. That’s according to the United States Bureau of Statistics. Among others, that money is spent on movies, theaters, concerts, and clubbing.
If you’re serious about saving up for an important course, you need to cut this out too. Instead, find ways to entertain yourself without spending over the odds. For instance, you can watch movies at home. You can also host game nights at home. Or, join a book club. A majority of them don’t cost a cent. In the meantime, you’ll be putting away a cool $200+ each month.
7. Save on utility bills ($100)
Americans spend hundreds of dollars on water, electricity, the phone, and the internet each month. But, because these things are vital, many families rarely drill down on utility expenses. Lighting, in particular, can be incredibly expensive. If you still use those old incandescent bulbs, you could end up using upwards of 500kW of electricity per month. Most homes actually use around 700kW.
You can save lots of money just by switching to energy-efficient lighting. If you can install Energy Star rated bulbs throughout the home, you’re unlikely to use more than 250kW in a month. The 250kW difference can save you over $100.
8. Sell items you no longer need ($100+)
One mistake many of us make is living with things we don’t even use until they are too old to help anyone. When saving for a rainy day, you can’t afford this luxury. If you have items that you don’t need anymore, rather than let them collect dust while simultaneously losing value, put them up for sale. You’ll be surprised at how much people are willing to pay for them.
A good example would be a desktop that has been lying idle for years. Rather than watch as rust sets in and the item lose all its value, you could sell it on Swappa or E-Bay for tens of dollars. The same applies to phones, laptops, shoes, clothing, and so forth. List them for sale to earn extra cash.
9. Give up a vice ($100)
If you drink or smoke, that’s another potential source of savings. Survey Analytics has found that the average person spends $1,200 on beer every year, translating to $100 a month. Meanwhile, the average smoker needs half a pack of cigars per day. Given that a pack retails at $5.51, you’d be losing $2.75 each day; or $82.5 every month.
Giving up any of these, or both if you can, would leave you with plenty of money that can go towards savings. And, it’s not just beer and cigarettes. You can also give up soft drinks, beauty products, and several other addictions.
10. Pick up a side hustle ($200+)
Finally, saving $500 a month may sometimes require that you find ways to make extra cash. Ideally, you should find work that pays relatively well without taking too much of your time. Also, it needs to be something you can do during your spare time without interfering with your primary job.
Fortunately, there are plenty of options to consider. You can pick up extra shifts at work, start a blog, babysit, and so forth. You can even consider freelancing platforms for quick gigs. These platforms guarantee at least a few hundred dollars every month.
Now, Over to You!
Of course, not each of the above tips would apply to everyone. For instance, you can’t give up beer if you don’t drink in the first place. On the same note, others, such as signing up for a cash-back reward credit card and finding alternative means of commute, can be attempted by anyone.
Your first job is to identify what would work for you. Ideally, you want to pick three to five options from the list. If you can do that and commit fully to your goals, you’ll be saving $500 a month with ease.