50 Ways To Save Money

"A penny saved is a penny earned." -- Anon.

"A penny saved is MORE than a penny earned if you then invest it and make money while you sleep!" -- Alex Newman.

Introduction: 5 bucks a day can make you a millionaire!

It's amazing how many people want to be richer, but resent the idea of saving money by cutting expenses. As I discussed in my book Secrets Of The Rich, saving money does not make you mean, it makes you smart - and it's been demonstrated that if you can save just $5 or more per day every day and invest it profitably, you can truly build up a colossal amount of wealth: If you were to invest $150 per month ($5 per day) at a 10% annual return, you would reach a million dollars in the 41st year!

Money you have saved can (and should) be put to work by investing it - and investing money that is saved by cutting costs is just one of the huge number of possible ways to earn money while you sleep (If you thought shopping was fun, just wait until you start making money while you sleep!)

I've compiled a list of 50 of my favorite ways to save money - and if you live in a developed nation, you should easily be able to pick from these methods and save over $5 per day. Consider $5 per day as a baseline target; if you are good, you should be able to do much better. I've tried to find ways which don't have other "hidden costs" i.e. you save $5 but end up costing yourself a huge amount of time. Some of these methods will save you money DAILY - and the amount saved can be astronomical.

Saving money won't necessarily make you boring. Most of the methods of saving money I have listed will not impact your social life - and the point of this page is to give ideas for ways to cut unnecessary expenses so as to be able to invest more money. When your investments are paying you back, it should give you a new-found social confidence that is more solid - and more opportunities for fun and adventures!

It's simply incredible how much money people waste - even people who consider themselves careful. There are fantastic ways to save money on this list that I once foolishly considered myself "too busy" to take action upon - until I realized how much I would save over time for a tiny amount of effort! Some things require a few minutes of effort that, if it were paid work, would equate to several hundred dollars per hour. You owe it to yourself to explore these methods, now!

There are mountains of "save money" lists online. I've combed through these, picked the ones I thought the winners, and added a few of my own. Make yourself comfortable and read this article fully. I am so glad that I followed some of the ideas listed below and that I now understand the true power of saving.

It really can be the difference between living from paycheck to paycheck and being a millionaire...

Note - it's good to cut unnecessary expenses; but if something is of great enjoyment or personal value to you, then it may rightfully be considered a worthwhile expense.

1) Pay off credit card balances and open a savings account.

This is possibly the most important money-saving tactic of all, for most people. Take any spare money you have around, add in money you have saved using the other tactics below and use this to pay off credit card balances. This will save you money every month in interest not paid, and also may improve your credit score - which can save you more money by enabling you to qualify for better rates. Pay off balances with the highest interest rate first.

Next, when these are all paid down to zero - start putting the dollars you save in the savings account. DO NOT spend it unless you have a real emergency. This way, all the money you save will increase and save you even more. See how much you can build in these accounts - but bear in mind; a savings account will not make you rich. It is a way to keep an emergency fund (some recommend the equivalent of 3 months' wages) and a way to store money until you are ready to invest it.

Always do your very best to pay off any existing CC balance! A credit card with a balance on it, is like an "antimatter savings account". It charges you interest every month - and so if you can pay it off, you'll be saving yourself a tremendous amount. A card with a $1000 balance on it at 15.9% interest costs you $13.25 per month in interest. A card with a $3000 balance at 25% APR costs you over $62 per month - and minimum payments will keep you in debt for an incredibly long time - sucking money out of you like a leech that's stuck to you. If you have a hard time stopping yourself using the cards - freeze them into a bowl of water. That way you still have them in case of emergency. Credit cards can encourage impulse buying - and the best option is not to give yourself the option.

Many people think that "credit cards are evil" - but they are not, and there are many good reasons to have them, from emergency fund sources to car rentals. They are financial "power tools" - and so, like any power tool that can hurt you if you do not use it well, they need to be treated with respect and real understanding.

2) Convert monthly subscriptions to quarterly or annual subscriptions if possible.

I just did this one with Aweber - a company that I was paying $19.95 monthly for their fantastic email list management services. By a simple button click, I switched to quarterly payments and saved $24 on the next 12 months. It took around 5 minutes to log in to my account and figure out how to do this. That's the equivalent of a tidy $288 per hour I was earning right then - not bad.

Many services offer these kinds of billing plans. From their point of view, it's a way to "lock in" subscribers and reward customer loyalty. However, if you are sure you are going to keep using the service, you can save money with a simple switchover. Only do this with subscriptions you are sure you are going to want to keep for the future. Many web hosting and domain name packages offer this option - and if you're sure you're going to keep your web site - do it! It will save you money. Other things to consider - magazine subscriptions and recurring billings of any kind. It's worth the trouble it takes to find out.

3) The Cafe counter.

Many people spend $5 per day at a cafe getting their morning fix of caffeine, sugar and cow. If you were to do this 5 days per week - that's a whopping $1300 per year. Instead, get your own thermos flask and ingredients - and make your own. And the time differential is not all that great; you may even save yourself time (and give yourself the opportunity to earn even more money) because you would not need to travel to the cafe or wait in line! Even better - drink water or fruit juice.

4) Set your car tires to the correct pressure.

Did you know that Americans waste over $10 million in gas PER DAY due to tire pressure. Not to mention, incorrect tire pressures are dangerous and are known to be the cause of many accidents. Check out this astonishing article for more details.

5) Give up "retail therapy" - and find other ways to cheer yourself up.

Many people fall prey to "emotional spending". This means that they spend money to cheer themselves up - also known as "retail therapy." The best cure for this - take the money and invest it instead. That way, you still have the sense that you have rewarded yourself - but you have "put the money to work for you" and will have even more money later!

6) Resist impulse purchases.

Many impulse puchases are for things that people would change their minds about, if they waited a few days. Simply resist the urge for 7 days - and then if you still want it, you are more sure that it's worthwhile. Impulse buying affects many people - and much of the stuff people buy on impulse, they really can do without. So if it's unnecessary; invest the money! And then let your investments buy you things later.

Resisting impulse purchasing is one of the great money saving challenges of our time. Big companies are so good at selling stuff, and convincing people to buy it. The secret is not giving yourself the option. When you get some money, do all the necessary things first such as pay the bills. Then, invest the rest! Don't leave it there tempting you, otherwise the continual stream of advertising we are bombarded with, will seduce you into buying all kinds of things you don't actually need!

7) Resist the urge to eat out.

You can easily save $10, $20 or more by buying ingredients and cooking at home. Plus, if you are dating, you will have the intimacy of your own home rather than the limitations imposed by the restaurant - and the opportunity to display great class with the art of cuisine! If you are meeting friends or associates - suggest a different time of day or activity as a way to meet - how about a walk along the waterfront or in the park?

8) Buy a carton of pure red grape juice instead of a bottle of red wine.

You'll save perhaps $5, maybe much more, and you'll still get the benefits of the grapes. Forget the idea (a clever marketing tactic) that wine makes you sophisticated. You are actually more sophisticated when you are not drunk.

9) Save electricity.

There are tons of ways to do this - here are a few: a) Dry clothes on a line instead of in a drier. b) In some places electricity is cheaper at night - you could do laundry and other electricity-intensive things then. c) Switch off 6-way strips at night. Many electrical devices use small amounts of electricity continuously in "standby" mode - and "wall wart" power supplies often use a small amount even when not actually charging the device.

10) Shop around, negotiate.

If you're about to buy something, first take a quick look on Amazon, eBay, Craigslist, overstock.com or similar. You can often make great savings if you can bear to wait a few days for it to arrive in the mail, or if you buy used goods instead of new. Second, if shopping at a major store in your area for a well known item, try calling a few stores in the locality and see whose price is the cheapest. You can often save many dollars for a few minutes effort.

Remember that ultimately all things are negotiable! Ask if there are any special deals available - or even straight up ask if there's any possibility of a discount. Sometimes, all you have to do is ask - and you won't get the discount unless you do it! It's interesting that in the Western world, negotiating is uncommon. In many other countries, negotiation is expected, and it's even seen as bad form not to try to lower the price a little!

11) Quit smoking.

I did this ten years ago and have not regretted it for a single second. I'm not going to get all self-righteous on you... but I remember that day in 1999 when I had just got a new girlfriend and became acutely and embarrassingly aware that I was coughing and wheezing like an old man. I was disgusted with myself and said to myself, as I vowed never to smoke again, "Which has greater power: Me or a few dried leaves? If I cannot achieve this, I am nothing."

12) Sign up for free customer rewards programs.

If you shop regularly at a certain store, having a reward card will start paying you back. The trick is to sign up for these cards at stores you frequent regularly - but not to use the cards to encourage superfluous spending.

13) Shop around for better insurance prices.

Insurance companies want your business. If you feel as though your monthly rate could be lower, shop around and state what you are paying with another company; they will want to beat your existing price because it means great profit for them if you are their customer.

I just did this one - oh wow, what a saving! It took me almost an hour on the phone, but I reduced my auto insurance by over $1000 per year! Part of this saving was due to the fact that I have been driving safely for two years since I took out the policy - but part of it was simply that the rate the new company (another one of the major companies) offered was simply better. All companies offer varying prices. Make sure you are "comparing apples to apples" - rates will of course differ if the policy differs.

14) Save money on drinking water.

Buying small plastic bottles of water (or worse, soda) is not only really expensive, but bad for the environment. Get yourself a high quality water bottle - such as the ones from SIGG. They are said to be non-leaching and it's not advised to re-use ordinary plastic bottles. Then, get one of those five gallon water bottles and refill it with filtered water at the store. If you were spending a dollar a day on a bottle of water, this method could save you a couple of hundred per year. Another possibility is to have a water filter installed - it might save even more.

15) Pack your own lunch instead of buying one at the deli every day.

This is a potential huge money saver - food is one of our greatest expenditures and making your own can save several dollars per day.

16) Dress For Less.

It's usually worth a breeze around Ross to see if there are any good clothes for cheap. There's often some great stuff there for amazing prices. Only buy things that you need - but you really can save some money on this one, if of course you can resist the temptation to buy pointless nick-nacks.

17) Low energy lightbulbs.

Everyone knows that these can save many dollars per year. Compact fluorescents save money but have come under fire lately because they are said to contain mercury which is toxic if they are broken. Fortunately, there is an astounding new alternative: LED lighting. The new generation of LEDs are bright and save an enormous amount of energy because they generate almost zero heat. They cost more to buy but last much longer too. Use smaller LED lights in places where bright light is not required - and you could be saving up to 98% on the energy cost of an ordinary filament lightbulb. I just bought a string of LED "christmas lights" for $10 which is bright enough for many areas and is rated at 4 watts!

18) Insulation.

Improving home insulation can cut heating bills - which can save a huge amount of money. A great free tip? Make sure windows are closed before switching heating or air conditioning on!! You'd be amazed... another one: Thicker curtains or extra fabrics draped inside windows can save much heat from escaping - and also cut air conditioning costs in summer.

19) Freecycle.org

Freecycle often has incredible free stuff. Sign up for your local group and help the environment as well as saving money. If you're about to spend money on something - browse Freecycle first. I kitted myself out with a free washer and drier once thanks to freecycle. Tip - be sure to ask if something works fully before collecting it!

20) Eat less meat.

Going without meat can save money. There are all kinds of options you can research for free online - and you don't have to go vegetarian to have a veggie meal a couple of times a week.

21) Take unnecessary items out of the car and put them away in the garage.

It's said that removing 100 pounds of weight of items from a car will save $25 per year. Obviously, leave essential tools and roadside emergency kit in the car! But those four extra bottles of engine oil you bought because they were cheap? Store them in the garage. Two minutes of effort to save $2.50 is an equivalent of $75 per hour!

22) Fix stuff instead of buying new.

Most things that are broken are not actually that difficult to fix - it's just that people can't be bothered or don't get round to it. I'm really good at fixing things and it's amazing what you can do with a screwdriver, a pair of pliers, some wire, gaffer tape, cable ties, JB Weld, string and a soldering iron! Of course, don't attempt things that are beyond your scope or potentially dangerous.

23) Rice.

Cooking rice is an incredible tactic for saving money. Rice is CHEAP - you can afford really good organic brown rice and still be saving a bunch of money compared to many other foods, especially premade meals. The trick is to cook enough rice for a few meals - it can be kept in the fridge for a few days and easily mixed with all kinds of things. This will save you time and money on further meals. Rice (as part of a varied nutritious diet blah blah) is widely held to be be very good for you indeed. I'm not a physician so I can't make actual health recommendations - but orientals have been consuming rice as a staple for centuries and it doesn't seem to do them any harm - in fact the Japanese are some of the world's longest living people.

Get a really good quality heavy stainless steel or cast iron pot (easy to find at thrift stores), and master the ancient art of cooking rice really well. Once you have done it enough times, it becomes completely formulaic. Keep the same cup for measuring the rice and learn just how much makes a perfect portion. Take a note of the exact measures of rice and water you use, the time it takes and the heat setting - and you'll soon be able to knock out perfect rice every time. Good quality rice often takes longer to cook - but once the water has boiled, you turn it down to low, cover the pot with a lid and set a timer - and so long as you are using the same type of rice, the same pot, the same measures of rice and water, and the same heat setting, the results should be predictable. It takes a few goes to get it right (keep an eye on it so as not to burn it) but then you are in the game.

Cook enough rice for a few servings and keep the unused in a container in the fridge. For a couple of days you have something that can form the basis of many delicious meals. You can add a few vegetables and you have a ready meal you can take to work for lunch. It starts to pay you back in time and money really fast - and it's possible to save a fortune if you are used to spending on prepared food every day.

I used to spend a shocking average of $20 per day at Whole Foods; mainly because I was in the habit of hitting the prepared foods counter every day. Just this tactic and #14 together are easily saving me more than the $5 per day I need to reach my target - not to mention the gasoline savings from not driving into town so often!

24) Pelican Cases.

Get a Pelican Case for your mobile phone, camera, iPod, laptop, audio gear etc. These cases are really cool and will protect your sensitive device from all kinds of knocks and falls - greatly prolonging the expected lifespan. If you routinely travel with equipment, good cases will save you money in the long run due to the prolonged lifespan and expected increase in resale price of all your gear - and the super-tough Pelican Cases have a lifetime guarantee.

25) Make gifts instead of buying them.

From candles, paintings to clothes or cakes - the list is endless and people appreciate something you made yourself. If you need ideas, do a web search for "things to make".

26) Buy in bulk.

Especially for non-perishable items such as bathroom tissue that will definitely get used at some point. You can save a huge amount of money by doing this - and keep an eye out for "two for one" type deals.

27) Dilute pure fruit juice with water.

Most pure fruit juice tastes really good if mixed "half and half" with good water. It's really healthy too! So take that nice filtered water from #14 and mix it up.

28) Get a better or cheaper phone plan.

Are you piling up rollover minutes that never get used? If it's going to save money to switch plans, or get less minutes - do it! I just did this on my cell phone and saved myself a fantastic $240 per year with about 5 minutes work. Easy! Easy! OMG, I had built up over 6,000 rollover minutes and realized that I could easily use a cheaper plan and still not max it out - so I simply logged into my AT&T account and hit the "change rate plan" button. Another tip - if your plan allows it, cut those minutes down further by making those long chatty calls during nighttime at the cheaper rate. It's often easy to say "Can we have this conversation after 9pm so as to save on my minutes?"

29) Don't drive too fast.

It costs more in gasoline AND speeding tickets! Plus, it's more dangerous. Accidents of any kind can be very expensive and excess speed is the commonest cause - avoid at all costs. Budget time better and leave a few minutes earlier.

30) Set up a standing order to savings accounts.

Just making it automatic will save you more money in the long run.

31) Don't keep too much in checking accounts - or in cash.

It just sits there doing nothing - it's not working for you. Instead - pay the money into savings, credit card accounts and other investments.

32) Get rid of one of your phone lines.

If you have a cell phone, you don't really need an additional land line unless you have a business requirement for it. If you need a static "office" number consider a cheap service that gives you a voicemail. Another tip for international travellers is to use Vonage or similar service that lets you have an international number - a virtual office in whatever city you want - for the same price.

33) Turn off that electric heater.

If cold, try putting on an extra item of clothing or two before sitting in front of an electric heater. Approximate US prices are $0.10 per kw/hour - so that electric heater costs around 10c per hour to run. Doesn't seem like much but 4 hours per day for 4 months during the winter is $48. Also, in summer - why not try cooling down the old fashioned way: Water. A piece of fabric soaked in cold water, wrung out and then placed around the neck is a tremendous cooling device and can save on air conditioning bills.

34) Avoid "payment protector".

They always try to railroad me into this stuff whenever I get a new card or something. I've never used it and don't really see why anyone would need it - so say no!

35) Wash your own car.

Yeah, it's nice to get the gold wash where they swarm all over your car like ants and whip it into a shine - but do it yourself and save $20 every time - easy! And who really cares anyway? I say, do it less often. If you're more worried about a little grime on the outside of a car, than you are about your financial future, you might have it the wrong way round!

36) Resist cravings.

Get some will power, and don't cave in to expensive, bad-for-you "treats" that hurt your wallet and probably your health too.

37) Look after your teeth.

Good flossing and brushing might save a fortune in dental bills in the long run!

38) Buy fasteners in bulk.

A great one for the "pack rats": If you do regular handyperson work, buy screws by the box instead of by the small packet. You'll save a lot more in the long run. Also, you can sometimes reclaim fasteners from things that you are dismantling and re-use most of them!

39) Turn off lights in rooms you are not in!

It still amazes me how much people leave lights on, despite the fact that it can easily add up to hundreds of dollars per year!

40) Use rechargeable batteries.

I used to spend money on AA's, AAA's and 9-volt batteries all the time. The initial investment in the rechargeables and the charger, pays for itself quickly. Not to mention that for digital camera, rechargeables last way longer, whereas ordinary cells seem only to last for a few photos.

41) Fix water leaks.

A dripping tap leaks water like a pocket with a hole leaks money. According to this handy drip calculator (isn't it amazing what's out there?) - a tap that drips just one drip per second wastes over 2,000 gallons of water per year! I found a great article showing how to fix a dripping tap.

42) Buy airline tickets early.

The longer you leave it to buy airline tickets, the higher the prices. If you are shopping online, play around with the dates if possible - you can often save big by travelling on different days.

43) Don't buy a brand new car.

You lose money as soon as you drive it away. New cars are often bought for the feelgood factor of driving a nice car, rather than for practical considerations - and a "good used" car can still feel really good, be reliable and save much money. There are plenty of stories of people who bought a fancy new car on credit, only to be forced to sell it (and end up with nothing but debt) a couple of years later.

44) Pay mortgage payments bi-weekly.

This is an interesting and clever possibility - I found it here.

45) Use fabric towels instead of paper towels.

Using paper towels is mostly unnecessary, wasteful, expensive and bad for the environment. I think it's one of those "bad habits" to reach for them automatically. When I was a kid, we never had the big "kitchen roll". We used old cotton towels to clear up spills etc, wrung them out under the tap and put a load of them through the machine when a basket of them had accumulated. You'll save a heap of money doing this. a) Keep a "rag box" - and old towels / cotton sheets etc can be cut up and put in it. This saves paper towels for general cleaning purposes. b) Use cloth napkins instead of paper napkins at the dinner table. c) Use cotton or silk handkerchiefs for sniffles instead of paper tissues.

46) Use email, IM or Skype instead of long distance or international calling.

Yes, these days, there are ways to stay in touch for cheap or even for free. Skype is my favorite - pure class. So long as both you and the person at the other end have the right kind of internet connection and equipment, you can enjoy unlimited free chat, text or video chat.

47) Stop paying for storage.

A 10x10 storage unit can easily cost over $100 per month. Why pay someone to hold on to stuff you don't use? Get organized, get rid of stuff you don't need (you can sell some of it and make more money!)

First, start by clearing out your home of things you don't need. Remember William Morris' famous quote: "Have nothing in your houses that you do not know to be useful or believe to be beautiful." Sell what you can, then give away what you can. Then, using the extra space available, clear out the paid storage. Transfer the items you really need to keep to your home - and get rid of the rest. If you really need to, pick up some exta shelving (think used furniture / office furniture emporium) or some stackable crates. Most of the stuff people pay to store, consists of things that they "might use again if". Why spend money now because it might save a little later?

48) Save money on paper.

a) Print on both sides. b) Keep a special tray for used paper that only has print on one side, instead of throwing it away or recycling it. You can use this for scribble paper, saving money on notebooks. And bonus points for being eco-friendly! We've done this since we were kids - my dad even organized collection of one-side-used waste paper from the office and gave it to us (and other families) for the kids to have an almost unlimited supply of drawing paper for free! Of couse, continue to dispose of paper with confidential information appropriately.

49) Dump that television.

I did this over ten years ago and have never looked back. There are better ways to entertain yourself for free - and I am also of the opinion that television is the bane of creativity. Not only is it costing you money - but think of the amount of time wasted. According to research - the average American watches over 4 hours TV per day. That's the equivalent of an unbelievable 9 years non stop television in a 65 year life!!

50) Paperbackswap.

Use the fabulous paperbackswap.com to get books by getting rid of books you won't read again. All you pay is the postage! Also, try Craigslist, ebay, Amazon and the good old Public Library before shelling out the price of a new book. Read good books and become more knowledgeable.

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Well there it is folks! I hope you enjoyed this list of ideas for ways to save money. Don't forget to check out my Complete Guide To Making Money While You Sleep.

-- Alex Newman

© Alex Newman 2009