This is more than a list of money saving ideas, it’s how to save money for long-term financial goals by making a plan to get there. Lists are great, but plans make things happen.
One of the things you’ve probably heard me and a bunch of other personal finance bloggers say over and over again is “save money, save money, save money.” We shake our fingers at you, give you a list of 50+ ways to do it, and hope you’ve learned how to save money from that list alone.
BUT, just telling you to cut your cable, ditch your car payment, or use a budgeting app won’t get you anywhere unless someone connects the dots and shows you how these savings can all turn into a much larger and more important picture.
I don’t have tips for instant success or a magic pill you can take to make big things happen. I have real advice for big goals.
Your big, long-term financial goals don’t have to be realistic either… I never thought to pay off $40,000 in student loan debt in 18 months was something I’d ever be able to do, but I made it happen.
That’s what I want to address today – making things happen by telling you exactly how to save money to meet your long-term financial goals, no matter how unrealistic or unicorn-sized they may seem.
I will give you the list of money saving tips you want because those things do actually matter. But first, I need to explain how those little tweaks and adjustments that you’ll be making to your budget will help you realize your long-term financial goals.
Learning how to save money for big things is a step-by-step process that takes changing your habits and mindset, making sacrifices, and doing it over and over again to make things happen. I won’t lie, it can be hard, but I promise that your future self will thank you.
It starts with setting a goal and making a plan
You shouldn’t wait to have a goal to start saving money, but defining what you’re working towards will almost always give you a better idea of how to get there.
You can set a goal for retiring early, going on your first cruise, or saving up for a downpayment on a house, your child’s college fund, or any number of things. You can set as many big financial goals as you want, but honing in on one at a time will help you with the others.
To show you what I mean, I’m going to use the example of paying off your student loans.
I like this goal because it’s relatable to nearly 45 million other people, and that number isn’t just limited to millennials.
Paying off your student loans is also one of those big financial goals that will have an even greater impact on your long-term finances. The sooner you can pay off your student loans, the better since you can then start saving that money for retirement… the biggest goal of them all.
To make this goal happen and to know exactly how to save money to get there, here are the steps that you’ll need to take (you can use these steps for any large financial goal):
- State your goal. I want to pay off my student loans.
- Know the cost of your goal. I currently have $60,000 in student loan debt.
- Set a deadline. I want to do it in five years.
- Break the total amount down into smaller pieces. I need to find $1,000 each month to make it happen.
Next, use the following list of money-saving ideas to reach your goals.
Each month, I will save:
- $350 by getting rid of my car payment
- $120 by cutting cable
- $300 by not going out to eat as much
- $50 after getting a less expensive cell phone plan
- $40 a month at the grocery store
- $140 by finding a less expensive health insurance plan
This plan doesn’t include other ways to make your goal happen even sooner, like finding a side hustle or banking your tax returns. You’re making a big goal happen by making some smaller sacrifices on a regular basis.
The best part is that in five years when your student loans are gone, you will have an extra $1,000 a month to put towards your next big goal.
M$M tip: Since we’re talking about finding an extra $1,000 every month in this example, another option is running Facebook Ads for small businesses. In just 2-3 hours per week, you can manage your own mini ad agency, earning $1,000 every month, and you can learn it all in the Facebook Side Hustle Course. We have a bunch of students who have already hit $5,000 a month!
How to save money – daily and weekly savings
A lot of people struggle with smaller money saving ideas for a couple of reasons. One, it’s not like you see any immediate or big returns on your efforts. And two, when you don’t meet those little goals, you’re like “no big deal, it was only $5.”
Learning how to save money on a daily or weekly basis is often breaking old habits and creating new ones. But, those little savings add up over time…
Say, Monday through Friday, you spend $5 on coffee per day. $5 seems like an inconsequential amount, but cut your coffee out for one week and you now have $25. Keep that up all month and you have $100. All year? $1,200!
You’re not going to retire early because you learned how to save money by cutting your coffee habit, but when you add a bunch of those small savings goals up, you can see how big, long-term financial goals are significantly more attainable than you had previously thought.
Here are ways to save money on a daily or weekly basis:
Do a no-spend day or week
A no-spend day or week is exactly what it sounds like. No going out to eat, no shopping, not even essentials. It’s like intermittent fasting, but with your money.
Because you might need to plan out some spending before you fast, a no-spend challenge forces you to think about what you need and helps you learn to live without a lot of extras. These are always fun challenges to do with friends, too.
Automate your savings
Apps like Digit and Qapital are micro savings apps that automate savings using the spare change approach. Qapital rounds your transactions up to the next dollar amount and moves it to a savings account for you. You can also set ITTT (If This, Then This) triggers to transfer funds when you log a workout, post on social media, etc.
Digit uses algorithms to learn your spending and savings habits and transfers a safe amount into a savings account for you. On average, the transfers are between $2-$14, and these happen 2-3 times per week.
Rethink the way you eat out
One option here is to just not eat out anymore. You can also make less radical changes, like going out for lunch instead of dinner. Restaurant portions are also really big, so share an entree, don’t order an app, and/or skip dessert.
Wait 24 hours before making any non-essential online purchases
Online shopping is way too easy these days, especially because you can tell websites to save your payment info. But, the next time you put something in your cart, leave it there for at least 24 hours before clicking the “Buy Now” button. I’d say that 4 out of 5 times, I let my cart expire because I often forget about it or simply decide it wasn’t worth spending the extra money on.
Make a grocery list every time you go shopping
Sticking to a grocery list is hard if you shop hungry or are rushed, but this simple step will prevent you from overspending on extras that you don’t need.
Use Rakuten, formerly known as eBates, for online shopping
When you sign up for Rakuten, you shop like you normally would online, but Rakuten gets a little kickback from companies for sending you their way. Rakuten then shares a portion of that commission with you.
Find free entertainment
Festivals, free concerts, hiking, free days at museums, and going to the park are typically all free entertainment options. As the weather gets warmer, you’ll find even more of this stuff.
Give up soda
Drinking soda on the reg probably seems cheap, but it’s more expensive than drinking water and it’s also really bad for you.
How to save money – monthly and semi-annually approaches
I don’t want to discount learning how to save money in those smaller ways that I just told you about, but with these slightly more ambitious ways of saving, you can find hundreds of dollars every month to put towards your long-term goals.
Get rid of your car payment
Here is one thing I wish more people understood about cars: cars are depreciating assets. Unless it’s some crazy classic car that you’re keeping in mint condition, your car is going to continue to decrease in value as the years go by. Why make payments, which include interest, on something like that?
You can find an affordable used car, pay for it in cash, and use the payment that you’re saving to put towards your big financial goals.
Getting rid of your car payment is a HUGE step towards those big goals, and here’s my Ultimate Guide to Getting Rid of Your Car Payment to help you ditch your loan.
Find a lower cost health care alternative
I have friends whose monthly health insurance premium costs as much as their mortgage payment. Because of the often extreme costs of health insurance in the U.S., health care sharing ministries are becoming a more popular option for healthy millennial families, couples, and singles.
Health care sharing ministries are different in some notable ways, so read Is a Health Care Sharing Ministry Right for You? to learn more.
Refinance your student loans
Refinancing your student loans is when you combine your smaller student loan amount into one loan that you borrow from a private lender. More often than not, you can reduce your interest rates, especially if you have a good credit score. This can save you hundreds of dollars a year over the course of your loan.
Cut the cord and get rid of cable
Getting rid of cable and finding less expensive alternatives is too easy to not do it. It’s also how you can save around $100 each month.
Renegotiate your bills
Every few months, call your cell and internet provider, car insurance company, etc. and just ask if there are any new discounts or promotions you can take advantage of.
The last time I did this, I was able to save $50 a month. It was really satisfying too and kind of felt like I unlocked some secret money saving menu.
Lower your utility costs
This one is easy, but it’s also easy to forget about. You can save money on utilities each month by:
- Turning the lights out when you leave the room
- Getting LED light bulbs
- Lowering the temperature on your hot water heater
- Taking shorter showers
- Moving the thermostat by a degree or two
Cut down on your cell phone plan
Hard truth here – unlimited data and a brand new cell phone every year is just extra spending that you can live without. If you need a new phone, buy a refurbished one. And, if you need to stream entertainment or download music, do it while connected to wifi.
How to save money to make your financial goals happen
As you start implementing some of the ideas on that list, one of my best pieces of advice on how to save money is to immediately start putting that savings aside. If you don’t, you run the risk of seeing that extra money in your bank account and thinking that it’s okay to spend it.
Treat those extra savings as paying yourself first.
Here are a few examples of what I mean…
… Going back to the $5 coffee example – at the end of the week, when you have an extra $25 in your account, deposit it into a savings account. Do that every week for a month, and you will have learned how to save an untouched $100 each month.
… If you’ve renegotiated your bills and are saving an extra $50 a month, make that $50 a bill you pay to yourself when you pay the rest of your bills.
… The $300 a month you’re saving by driving a used car that you paid for with cash, you still make your car payment, but this time it’s to yourself.
Once you’ve learned how to save money in small ways, you stash it away as you go. You put it towards your student loan payoff, your emergency fund, retirement savings, whatever big goal you are working towards.
The bottom line on long-term financial goals and how to save money for them
It’s small steps people! Learning how to save money and make long-term financial goals happen only feels hard because you can’t see the way there.
Lists of ways to save money are the way to long-term savings goals, but unless you pair that advice with how to make a plan, then they’re just lists of ideas.