Years ago, my father passed away. It wasn’t totally unexpected. He had diabetes, his health had been declining, and earlier that year, the doctor said his kidneys were failing.
However, I was still shocked when my brother called me to let me know my father passed away. That week was stressful as we hurried to make funeral arrangements and clean out my father’s apartment. But the biggest stress was the financial burden of the funeral that fell upon me and my three siblings. (You can read the full post on on Money Saving Mom).
We had to come up with $7,000 to cover the funeral costs. Luckily, we were able to split up the cost between my siblings and uncles. That still meant that my family needed to pay $1,000.
Thankfully, my husband and I had an emergency fund to pull from to cover our portion of the funeral. If we didn’t have an emergency fund, the financial burden would have been placed on my siblings or we would have had to put it in a credit card and go into debt.
It was a huge blessing that my husband and I made the decision years ago to build up an emergency fund. You never think something will happen to you until it does unexpectedly.
It can happen to anyone at any time. It might be the death of a loved one, an unfortunate hospital visit, or a job layoff. What’s important is that you’ve planned for these unexpected events by having some savings. This is your financial cushion in case something goes wrong and you need to access money quickly.
If you already have an emergency fund, it’s still important to continue setting money aside in savings so you can pay for items that your family needs or even wants without having to use a credit card and go into debt.
According to a study by Bankrate.com, more than a quarter of consumers have no emergency savings. It’s recommended that you put away at least three to six months’ worth of living expenses. If you have debt, the first step is to save $1,000 in an emergency fund, then start eliminating debt. Once your debt has been eliminated, then you can continue to build your three to six month savings.
Here are ways to save money so you can increase your savings this year.
Tip #1 – Have a Plan and Set Goals
Think about what you are saving for. Is it an emergency fund? Is it extra money to pay off debt or pay down your mortgage? Or is it a family vacation? Once you know what you want to save for, then prioritize which one is the most important to you.
Now examine your financial situation, income, and needs. In other words, create a budget or a “spending strategy.” We all spend money each month, but a spending strategy will help you spend your money more wisely. Based on your spending strategy, figure out how much you can reasonably put towards savings each week or month and set some financial goals. These goals need to be achievable and have a time frame. And the goals need to be broken down into smaller goals.
For example, if you want to save $9,000 within one year (which would be a three-month emergency fund for your family), that breaks down to $750 per month, or $187.50 per week. So you would need to find an extra $187.50 in your budget each week in order to build a three-month emergency fund within one year.
Saving $187.50 each week, or whatever your goal is, may seem impossible because there are bills to pay such as the mortgage, utilities, groceries, a car payment, and possibly student loans. You may be thinking that you would like to save, but there’s just no money left at the end of the month. And that’s the problem. Most people save what’s left over after bills and discretionary spending. But by prioritizing, it’s possible to save that $187.50 a week or come close to doing it. This leads to Tip #2.
Tip #2 – Pay Yourself First
To pay yourself simply means that before you pay your bills, buy groceries, or spend any money, first set aside a portion of your income to save.
You can make it easy by automatically depositing an amount or percentage of your paycheck into a savings account. If you arrange to have the money taken from your paycheck before you receive it, then you will get used to managing living expenses with what looks like a smaller paycheck. Most importantly, stay consistent and treat the money you’ve saved as if it is off-limits, except in a real financial emergency.
One benefit of paying yourself first is that you are encouraging sound financial habits. Most people spend their money in the following order: bills, discretionary spending, saving. It’s not surprising that there is usually little left over to place in the bank.
If you turn it around and put it in this order: saving, bills, discretionary spending, then you are able to save the money before you spend it.
Almost everyone can save 1% of their income. Say your family’s monthly take home is $3,000. Saving 1% would be $30. Saving such a small amount may seem pointless, but it’s helping you to grow your savings. Plus, the process is painless. If saving 1% is easy, then try saving 5% or 10% a month. It depends on your financial situation and what you feel you can reasonably put toward savings each month.
Tip #3 – Cut Down Extra Expenses & Trim Unnecessary Spending
Prioritize which expenses are most important to you, then decide what you can get rid of such as cable, subscriptions or additions on your cell phone.
If you decide you can manage without premium cable channels, then update your plan the next time your contract is up and put the difference toward your savings goal. Maybe cut out monthly subscription services such as Netflix, Hulu or YouTube Premium.
For our family years ago, every time I saw our cell phone bill I cringed. I knew something had to change. So we shopped around and found a different cell phone provider and a plan that worked for our family. By making this change, we were able to save $70 a month, which adds up to be $840 a year!
Be sure to also cut down on discretionary expenses. This includes dining out, buying expensive clothes, going on pricey vacations, and other unnecessary expenditures.
If you get manicures regularly, maybe don’t do it one month and put that money into savings. Maybe you can stretch the time you go to the salon by going every six to eight weeks rather than monthly. For our family, we can easily spend $25 just to eat out at a fast food restaurant. Maybe try eating out less often and cut it down to just once or twice a month. For those of you who work, take a lunch to work rather than running next door and grabbing a sandwich. With the money you would have used to eat out, put it into your savings.
Also little indulgences can add up such as regularly purchasing a soda from the convenience store or adding treats and snacks to your grocery shopping cart when they weren’t on your list. Aim to scale back small purchases. It’s amazing how much you could save in a month just by making a few changes.
If you feel you are already living from paycheck to paycheck, then start small by cutting back on expenses and looking for ways to generate extra cash. You might also consider using this year’s tax return to get your savings off to a great start.
For our family, we like to use our tax return to go on family vacations or pay down our home mortgage. And some years we put our tax return in savings.
Here’s what we did with a few of our tax returns. When we had our third child, we knew we wanted a larger vehicle because trying to get all three children buckled in car seats in the back of our car was challenging. We were able to save up and purchase a new-to-us vehicle and pay cash for it. Click here to read the entire story.
It was not an easy thing to do. We spent years building up our savings so we could purchase a vehicle with cash and so that we didn’t have a car payment. Sure, it would have been easy to just go purchase a new car with a monthly payment plan, but financially it would have been stressful on us because we would have needed to come up with $200 or $300 more dollars each month just to pay for the car.
Instead, we planned ahead and were patient until we found the right car within our price range. I realize that this may not be an option for everyone, like if your car breaks down unexpectedly and you need to get a new car, but I’ve learned that if you can plan ahead and save the money needed to purchase something in full, it feels great because there’s not that stress or burden of debt.
Tip #4 – Buy Groceries on a Budget
Except for the mortgage, groceries are the highest monthly expense, and the average family spends more than $6,000 a year on groceries. There are some monthly bills that you can’t control such as the mortgage and some of the utilities, but you can control the amount of money you spend on groceries. Here are a few tips how to buy groceries on a budget.
A. Determine a Budget
First, evaluate what you have spent on groceries during the last month and then take an average. Slowly challenge yourself to start cutting 5% here and there from your grocery budget. Within 8-10 months, it’s possible to have lowered your grocery bill by 30% or more. Be sure to set a realistic budget so you don’t get discouraged and give up. You want to be able to persevere and see the long-lasting benefits.
I’ve increased my budget since adding more children to our family. For our family of five, our budget is less than $500 a month, and that includes food, household items and personal care. I usually only spend about $350 – $400 a month at the grocery store, and then with the rest of the money, I use it to purchase items at case lot sales or to pick up bulk items at a warehouse club such as Costco or Sam’s Club. Each family is different so determine a budget that will work for you.
To save money on your groceries, you don’t need to be a crazy coupon lady. I’m not one of those ladies with stacks of coupons and a massive coupon binder. I enjoy finding good coupons and deals, but it’s important for the every-day person to know that they can save money on groceries without spending hours and hours of time clipping and organizing coupons.
B. Plan Out Meals
Before heading to the store, be sure to plan out your meals. Just by taking 15-20 minutes each week to plan out your family meals for one to two weeks will save on your budget. If you don’t plan out family meals, you are more likely to run to the store every few days, if not daily, to pick up items for dinner. The more you enter the store, the more likely you will add extra items to your shopping cart that you don’t need. And you’ll end up paying full price for the items rather than picking them up when they are on sale.
C. Find Sales and Stack Coupons
The way to save the most money on groceries is to watch for a sale on a product, preferably when it is at its rock-bottom price, which is the lowest price you’ll see it, and then purchase it using a manufacturer coupon and/or an in-store coupon. For example, Walgreens had Purex Laundry Detergent on sale for $2.99. I had a $1.00 off Purex Walgreens in-store coupon. I also had a $1.00 off Purex manufacturer coupon. With the sale and two coupons, I was able to get it for just $0.99!
Begin to practice the “Buy Ahead Principle,” which means to try to never pay full price for anything. By being patient and watching for sales you can buy most items at a discounted price. When an item reaches its rock-bottom price, don’t just buy one item. Purchase as many items as your grocery budget will allow to keep you stocked until the next sale. Keep in mind that most sales re-occur about every 12 weeks.
And don’t go out and spend hundreds of dollars now to begin building a stockpile. Instead, designate a small portion of your grocery budget to buy extra discounted items that you will use in the next few months. Even $5 or $10 a week devoted to stocking up on discounted items can go far. If you don’t find any really good deals one week, save your money for the next week.
And remember that time is money. Don’t feel like you need to hit every deal. Just focus on the best deals that week for the items you need.
If you want to save even more money on groceries, read these 21 Tips How to Spend Less Money on Groceries.
Tip #5 – Become a Savvy Shopper
Part of being a savvy shopper is knowing when and where to buy something and if it’s a good price. Before you purchase something, think about whether you could instead make it yourself, get it used, fix it, do without, or find a less expensive alternative.
Many times, not buying anything at all will save you more than buying something on sale.
For items you purchase less frequently or for larger items, such as an automobile, appliance, or furniture, be sure to do your research online and at a few different stores to find the best deal. Before heading to a store to shop, see if there is a coupon you can take with you. And before eating out, always search online for coupons or deals.
Think before you buy anything by asking yourself these three questions:
- Is this item a necessity?
- Can I absolutely afford this item?
- Have I done everything that I need to do to ensure that I’m getting the best price?
Here’s one example of how I researched online to find a better deal. I used to pay $50 a box for contacts (which is a 3-month’s supply) by ordering them from my eye doctor. However, I did my research and found that I could purchase the exact same box of contacts on DiscountContactLenses.com for almost half the price and only spent $27.99.
If I wore glasses, I found deals at Coastal.com to get generic frames and lenses for just $20. The reason they can sell them inexpensively is because they sell them directly and don’t go through a middle man. Many times Coastal.com has promotions to get your first pair of glasses free.
Read more about Tips to Save Money on Glasses and Contacts here.
Tip #6 – Don’t Push Yourself Too Hard
When setting a financial goal, push yourself past your comfort zone, but be realistic. The goal is to succeed!
If you fail within the first week, you’ll give up and say that you aren’t good at budgeting and saving money. However, if you don’t develop the saving habit now, there are always going to be reasons to delay. It’s all about taking baby steps in the right direction. Chip away at your savings goal a little at a time. Think of your goal as a marathon rather than a sprint. Be steady, and be consistent. Learning and doing this is like exercising a new muscle, yet it’s possible to do it. It just takes time.
Once you’ve reached your goal, reward yourself. I’m not saying to go out and blow the money you saved, but have a small reward in mind when you achieve your goal. This could be something enjoyable for you or for your family.
Even though I have a savings website, I’m not a penny pincher. We go out to eat without using coupons sometimes. We do fun outings as a family. The reason I save money is so we can splurge on things we enjoy or that are important to us, because life is about enjoying things that matter most.
I hope these ways to save money will help you increase your savings this year. What other tips do you have to increase your savings?
Here are other articles you might like to read:
I am always looking for ways to save. However I find most of the tips arent relative to where I live. I live in a small costal community. We only have a couple of grocery stores to choose from. Often we are waiting for stuff in stores because the ferries cant cross because of bad weather. Things that are in stock are often very expensive. And sale items either isnt in stock or sells out fast and again we have to wait on trucks and ferries. Also, the cashiers in our stores dont quickly scan coupons like you see on tv. They scrutinize every coupon and more often then not find ways not to honor them. I cant shop once a week.
Lisa @ Saving Cent by Cent says
With grocery budgets, you have to figure out what works for your family, and it sounds like yours is more challenging because of the area you live in. It also sounds like you do your best to look for ways to save money, and sometimes that’s all you can do.
Keelie Reason says
I completely agree that the little purchases like a soda here and there can add up. You spend that small amount of money and don’t even think twice about it. I know that my brother added up the amount of money he was spending on bottled drinks and it was $30 or $40 a month. That was insane. Think of all the Starbucks drinks we buy. You could feed your family a small meal for the amount of a drink almost.
Lisa @ Saving Cent by Cent says
It really amazing how quickly small purchases add up. That $30 or $40 a month is $400+ a year. Thanks for stopping by.
Deb Wolf says
My dad taught us the importance of weekly saving. Thankfully my husband was interested in learning and applying Dad’s advice. We kept a detailed account of every dime we spent for a few years so we’d know where we could cut our spending if needed. I wasn’t a huge fan of the process, but it really helped us learn where our money was going. Great tips!
I love your post. It is so well written. You look like a very professional blogger and I need to emulate you. I also love Money Saving Mom and I think it is great you have been able to be her guest post blogger.
Wow! These are some seriously great tips! My husband and I have a small emergency fund in addition to our savings. We were actually able to use it the other day to help a friend who is new to the area get a new tire when theirs exploded on the freeway! I’m so glad we had money that wasn’t coming out of our monthly budget, so we were able to help them and their cute family! I love the idea of saving 1% of your family’s income to start small. I’m going to start doing that. Oh and I’m amazed by your grocery budget! We spend more than that a month, and we’re only feeding two of us… I must be doing something wrong!
Lisa @ Saving Cent by Cent says
That is so generous and kind of you to help out that family! I am sure they appreciated it. It’s nice to have money set aside so you can do that. In regards to my grocery budget, it took about 10 months of a larger budget and stocking up on items I use regularly to get to the point where I can now just shop the sales, and I can now maintain that grocery budget. You have to find out what works for you. If you live in an area where groceries cost more, then you need to take that into account when determining your grocery budget.
Jennifer Corter says
These are some really great tips! My husband and I just recently made the decision to put away money for an emergency fund. You truly never know when something will come up, be it car trouble, something going wrong in the house, medical expenses, etc.
Bonnie Way says
My husband and I can totally use these tips! He just got a new job so we got a bit excited about having a regular income… but moving expenses, insurance and a few other big things have hit us hard. I’ve been meal planning lately and really like how easy it is – and I think we waste less food so that saves money. Thanks for sharing what’s worked for you! 🙂
Alice @ Earning My Two Cents says
Great tips! I have learned the importance of an emergency savings fund oh too well from countless car repairs and emergency vet bills that left me without any cash and credit card debt. If only I had had the money in savings! I have been really working on beefing up that emergency fund. When you can pay cash for something, even if its sad and unexpected like a repair or a parent’s funeral (so sorry for your loss), there is a sense of pride in knowing that you were responsible and can take care of these needs without putting yourself in the poorhouse.
Lisa @ Saving Cent by Cent says
Not having enough money to pay for the basic items you need or emergencies can be so stressful. It does feel really good to be able to take care of my family without having to go into debt. Thank you for sharing your experience, and thanks for dropping by.
This is all great advice. We have two young adult kids, and we’re trying to advise them in a sensible way when it comes to finances. It’s so easy to get sucked into debt and habits like eating out too often or spending on luxuries like the things you mentioned is a quick way to get there. I think I need to send them both this article!
Jennifer @ Emulsified Family says
“Is it a necessity?” Great question to ask with every purchase. I probably need to start verbally talking about that with my kids are we buy things so they get in that mindset as well. This weekend we did a huge garage purge of things that were never really a necessity. Makes me wish I had the money we had spent on that stuff instead of 6 large bags full of garbage. 🙂
My husband and I just started meeting with a financial planner and many of these tips are similar to what he told us. We find #4 to be the hardest out of all of them!
Awesome post! As an accountant, I always advise people on the importance of having an emergency fund.
As a mother of 4 I am all about saving money!! Great post and great ideas! I am very frugal and don’t like spending money! A great way we add to our savings every week is when I balance the checkbook, I round up the next dollar and put the cents into a savings account. I can’t seem to get my hubby to use cash instead of the bank card. So our savings add up quick!
Lisa @ Saving Cent by Cent says
I love that idea of how you put that extra cents into your savings. It really starts to add up and help out. Thanks for sharing!
So sorry for your loss but thank you for the tips. Unfortunately, I am the spender of the family so to me saving is difficult. I am always looking for tips on how to save and cut costs. You had tips and resources I had never heard of and greatly appreciated them. Keep up the good work.
Great article. I am so sorry for your loss.
I think I’m pretty good at budgeting but I would never have thought of paying myself first. I can see that makes perfect sense. One of my aims is to visit Norway and hopefully catch the Northern Lights. I shall start saving! Thank you.
Barb J says
I love saving money and budgeting so this is a great read for me. I do have to work on paying myself first though. Thanks for this. Happy saving.
Barb J says
I love saving money and budgeting. Great tips. (I am sorry for your recent loss.)
Angela McKinney says
Love the tips. My husband thinks he is good at saving but really is not. He saves and then splurges. I am no better so can’t really talk. We really need to start saving for college for our daughter and to buy a house. It is really hard on a limited budget but your tips can help us.
Michelle H says
This is really great advice. Our emergency fund has saved us so many times and it’s never hard to build it back up if we focus on it being important. Excited to start getting your weekly list. Thanks for sharing.
Shelle @ PreparednessMama says
Very thorough article. Several years ago we found Dave Ramsey and got serious about our money. Now we always have an emergency fund and I can’t imagine being without it. My husband is a funeral director and your story is so true – and all too common – unexpected funeral costs are very stressful for a family when a loved ones dies.
Beth McIntire says
We’ve bought glasses for my husband and daughter from Coastal, and they have fantastic prices, nice product and great service. I definitely recommend using them to save money on eyeglasses.
Whitney McGruder says
These are amazing tips! My husband is still studying and we just got married a year ago–and I learned a lot here about how we can start good saving habits. We’re already pinching pennies as it is, but it’s nice to know there are ways to start saving money without making it a stressful goal. This was a lot to digest, so I’ll have to come back every once and a while to refresh! Thanks for your thorough advice.
Pam McCormick says
I need so much help in this area!! Budgets, saving and more. So so sorry about your father. Thank you for sharing your story and how others can learn from that.
Really solid financial advice here! I can’t promote an emergency fund enough! And so sad that most people don’t have one. We just had our furnace go out, and our dryer quit working. Thankfully, they were easy fixes, but having the emergency fund takes all the stress out of how am I going to pay for this? Because it’s already there.
What a great list (I’m sorry the post was inspired by the death of your father – expected or not). For us, we’ve trimmed and we’ve also started eating out less. Instead, we date at home with the kids. We get a cheap bottle of wine and stay in while the boys play upstairs. Free radio and we’re set. You just have to think outside the box on these things to build up an emergency fund and not make it like your living a life sentence!
Kelly @ A Mother's Design says
This is one of my big goals for this year. Thank you for this list of tips. It’s going on my fridge to remind me every day.
It’s hard to find ways to save money, without feeling like you’re missing out on things.
The husband does all the grocery shopping, and loves to save us tons of money with all the sales, coupons and discounts. Personally, I spend time earning free gift cards that we can spend at our favorite stores, or I just redeem the points I earn for cash done through PayPal.
It makes a huge difference in our budget.
Phyllis Sather says
My husband says no one likes a bargain like I do. I am very thrifty and have always been. I don’t think I could be any different. This is all good advise. Thanks for sharing.
Crystal Green says
These are some helpful bit of advice. Thanks for sharing them. I am sure that many people can benefit from them.
This is a great list. I really need to work on saving money! I was really going to try hard and just pay cash for groceries for this month but that didn’t happen. It is something I think about and want to improve on. I”m going to save this!
Reelika @Financially Wise On Heels says
I am a big believer about paying myself first. I think this is the only way things work. Otherwise there is typically nothing left to save. Great post, thanks for sharing!
Sophie French says
Always looking for ways to save! My Dad is a financial adviser, which should have made me pretty savvy, but I think it has had the opposite effect. I use a budget planner currently and input every single thing I spend right now, but this is more of a ‘once I’ve spent it’ so these tips are awesome as a way to practise the ‘not spending’ in the first place!
Trena Quesenberry says
This is great advice. My husband and I really need to work on an emergency savings. My dad passed away this past September, and the funeral was over $16,000, and that was getting the cheap stuff, we were not getting all the bells and whistles. My mom had to dip into her retirement to pay for the funeral.
Lisa @ Saving Cent by Cent says
So sorry to hear about your loss. It’s a difficult thing to go through. Funerals cost so much even when trying to keep them inexpensively. Luckily, I didn’t have to pay for all of my father’s funeral, but I mentioned to my husband that I would like to have enough in savings to be able to cover a funeral or a major hospital bill just in case anything ever happened. The stress of the situation is hard enough, and having to add on a financial stress makes it worse.
Elizabeth Duke says
Thank you very much for this information. There have certainly been times when I wish that my husband and I had an emergency fund such as this. It would certainly be very beneficial. I’m going to talk to my husband about this because I feel that it could really benefit us to try this. Thank you again!
Lauren @ Mom Home Guide says
I have to get better about buying groceries on a budget. I have pledged to start cutting more coupons and to pay more attention to grocery store circulars! I have also started buying cheaper packages of meat in bulk, instead of buying the smaller packages of thin-cut chicken breast, etc.
These are great tips! We all can use a good reminder of some solid savings tips, I know I do!! Thanks 🙂
Christina Sandema-Sombe says
I recently saw an infographic on facebook that had a pay your self model for savings that I liked. For sure doing that in conjunction with your other tips could make a real impact year to year
Melissa Vera says
These are some great tips. I have always found that I save more money when I plan my meals out than when I fly by the seat of my pants.
Shereen Travels Cheap says
These are all great tips! I use the same ones to build a vacation fund. It’s always sad to have to dip into your emergency fund for an emergency, but it’s better to to be sad to spend the money than be sad to not HAVE the money in the first place.