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Tips for Saving Money in Today’s Economy

Posted on 13 March 2012 by Rachel

Without question, today’s economic climate is one of frugality, uncertainty, and unease. The financial upheavals of the past few years have touched just about every family, regardless of income. These circumstances have given each household the opportunity to re-evaluate its money habits, particularly in the ways discretionary funds are spent. And though certain costs just can’t be avoided, such as rent or mortgage, there are a few things that every household can do to save a little green.

 

It might go without saying that the first thing you can do to save money is to create and stay faithful to a budget. But here’s some advice just in case: create and stay faithful to a budget. Sometimes the mere act of sitting down to examine your finances can open your eyes to a whole new world. When the black-and-white realities of your expenditures are staring you in the face, you might start to re-evaluate those daily runs to the sandwich shop down the street. Even a small recurring purchase can amount to hundreds of dollars over the course of the year, and putting all of your purchases into separate categories will help you prioritize the ways in which your household uses money. So if you haven’t started one already, you should think about creating a budget. As a way to ramp up the process, start saving your receipts so that you can accurately judge where you’re spending. Your findings may surprise you.

 

Once you’ve started tracking your expenditures, it’s time to put some thought into putting some structure in place. For example, many households have found success in the “cash system.” As the name implies, this system consists of using cash (and not debit or credit) for all daily expenditures. At the start of each pay period, make a single withdrawal from your bank and then divide the money among purpose-specific envelopes. Label the envelopes (groceries, dining out, hobby, etc.), and then keep them in a safe place. When the money in the envelope is gone, you have to wait until your next paycheck to spend anything in that category again. It takes discipline, but the cash system can really work. Credit cards make it easy to spend money that you don’t have—but when you’re using cash only, it’s literally impossible to overspend because once you reach your limit, there’s no more physical money to spend.

 

In some cases, it can actually be cheaper to rent than to own. If you’ve just moved or are planning on redecorating, it might be a good idea to rent furniture or appliances from a place like Rent-a-Center instead of buying them outright. This way, you can try out different colors, pieces, brands, and layouts without making a potentially costly purchase that you’ll regret. It’s always nicer to know what you’re buying, so consider the merits of renting first, and make sure you understand all of the costs on both renting and outright ownership to get the best deal for you.

 

Another potential money-saving practice is avoiding the siren call of the sale. While sales can be great when you’re already in the market for something, it’s a fact that many people buy things (whether they need them or not) just because they’re marked down. So before pulling the trigger on a discounted item, ask yourself “Do I actually need this?”

 

So with these and other tips, saving money can be gratifying, empowering, and fun!

 

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