18 Budget Hacks That Can Help You Get Your Finances on Track
Try these and watch your cash accumulate
Though Americans are doing a better job of saving today than in years prior, many of us still have work to do. In fact, only 39% of U.S. adults have the funds on hand to cover a $1,000 emergency. If you need a savings boost, then it’s time to rethink your approach to how you manage and spend your money. Here are a few budget hacks that’ll help you seamlessly bank more cash.
1. Set up an automatic savings plan
It’s hard to spend money you don’t get access to. If you set up an automatic savings plan, a portion of each paycheck you receive will go directly into your savings account, thus eliminating the temptation to blow that cash needlessly. Set up that plan upon getting a raise, and you won’t even come to miss that money in the first place.
2. Use the envelope system
Many of us who maintain a budget do so electronically, such as on a spreadsheet. But a good way to keep your spending in check is to utilize the envelope system, where you designate individual envelopes for your various expenses and fill them with cash at the start of each month. Once you see your cash supply dwindle in a given category, you’ll know to go easy on spending to avoid running out of money completely. Want to take things a step further? Don’t let yourself transfer money between envelopes so that you learn to better manage your expenses on an individual level.
3. Barter for services rather than pay for them
We all have services we’re used to paying for, whether it’s having our homes cleaned or our pets groomed. But if you’re willing to give up a bit of your time, you can save money on certain expenses by bartering for them instead. For example, if you’re a graphics design wiz and your friend has a hair-styling business, update her website in exchange for a free cut. You’ll both save money, making it a win-win.
4. Read your supermarket circular
That grocery circular you get in the mail isn’t just meant to take up space; its purpose is to alert you to sale items that could save you money. So rather than toss that circular, comb through it each week and see what’s being offered at a discount. If it’s items you were planning to buy anyway that don’t expire, stock up while you can.
5. Start planning your meals
How many times a week do you find yourself stopping at the supermarket to pick up a few missing ingredients for dinner when your fridge is otherwise loaded? Many of us shop for food without putting much thought into what we actually want to eat in the coming days, and as such, we buy needless items that end up expiring. A better bet? Figure out a weekly meal plan in advance, create a shopping list around that plan, and stick to it.
6. Keep a grocery inventory at home
Buying items you already have on hand is not only frustrating, but a waste of money. Unfortunately, it’s a trap many of us fall into frequently. After all, it’s hard to remember which cereal boxes you have stashed away in the back of your food closet, or which spices you’re running out of. To avoid doubling up on groceries and wasting money in the process, create a digital inventory of your pantry and fridge, and consult it before you buy things. Apps like Google Keep let you store such lists on your phone so that they’re accessible at all times -- even during an unplanned supermarket stop.
7. Get walking
If your office is 20 miles away from your home, then you have no choice but to drive or take the bus. But if walking to work is a reasonable endeavor, do so, at least on a part-time basis. Not only is the exercise good for you, but you stand to save money on gas, parking, bus fares, and taxi or rideshare costs.
8. Find a savings buddy
It’s hard to save money when everyone around you is spending their cash like there’s no tomorrow. But if you enlist a like-minded friend with similar goals to save money with you, you can challenge and encourage each other every step of the way. You might even make it interesting, where the first person to bank $500 gets treated to their favorite (cheap) restaurant by the other.
9. Cancel rarely-used subscriptions or memberships
Most of us consistently pay for items we don’t really utilize, whether it’s the gym you go to once a week or the video streaming service you watch twice a month if you’re lucky. If you examine your budget, you’re likely to find at least one thing you don’t actually need and won’t come to miss, and the sooner you slash that cost, the more cash you’ll free up.
10. Unload a vehicle you don't use for commuting
AAA says it costs $725 a month to own a car when you factor in payments, fuel, insurance, and maintenance. If you don’t use that vehicle every day, but rather, on weekends or for the occasional shopping trip, you’ll probably come out ahead financially by renting a car as needed, or using a rideshare service multiple times a month. Not only that, but having your own vehicle can be a huge liability, so unloading it could save you from having to cover a major unplanned repair.
11. Carpool to work
The benefit of driving to work on your own is getting to pick up and leave on your own schedule. But if you’re willing to be flexible, carpooling with fellow coworkers could save you a bundle over the course of the year. Besides, if you commit to driving together, you’ll be more likely to show up on time, which is a good habit to uphold at the office.
12. Bank your savings when expenses go away
Maybe you finally paid off the car you were financing, or got rid of those nagging student loans that were otherwise draining your bank account. But rather than start spending that cash freely, it pays to keep that now-gone expense in your budget as a designated savings category. In other words, if you got used to forking over $250 a month in student debt, start paying that money to yourself by putting it in the bank. Or, spend a small chunk of it as a reward of sorts, but save the rest.
13. Automatically save your change
We’re all used to purchases that generate change -- you pay $10 for a meal that costs $9.32, or spend $3 on a $2.50 latte. But did you know that there are several apps out there that let you round your purchases to the nearest dollar and put the change in savings? Sign up for one such app, like Acorns, and you’ll build up some nice additional savings, albeit over time.
14. Buy prescriptions in bulk
If you have a medication you take regularly, ordering it in 90-day supplies could wind up being cheaper than renewing month after month. In some cases, you might pay less for a three-month supply than you would for a single month’s batch, so review your prescription benefits to see what makes the most sense.
15. Go generic
Whether it’s the medication you take or the supermarket products you buy on the regular, avoiding brand names is a good way to save money across the board. For example, 90% of generic drug copays cost less than $20, compared to just 39% of brand-name copays. It makes sense to shop around for generics or other such low-cost alternatives, because you’ll typically get the same benefit, just at a lower price.
16. Wait 24 hours before buying anything out of the ordinary
When you're on a diet, a good weight loss trick is to drink a glass of water when you think you're hungry, wait half an hour, and see if that urge to eat still exists. The same holds true when it comes to the things you don't usually buy. If you're thinking of purchasing something out of the ordinary, whether it’s an article of clothing or a new electronic, commit to waiting 24 hours before pulling the trigger. Chances are, you'll come to realize that some of those items aren't worth your money.
17. Ask for discounts
Sometimes, the best way to snag a better deal on an existing expense is simply to ask for it. Whether it’s your cable provider or your local dry cleaner, if you’re a customer in good standing, it never hurts to request a price break. Even a small discount could go a long way over the course of a year.
18. Examine -- and cut -- your budget quarterly
As life evolves, so too do our habits and needs. That’s why you should pledge to examine your budget every three months with the goal of finding at least one expense to reduce or eliminate. You might, for example, cut your driving costs during the spring or summer, when it’s nice enough to get places on foot. During the winter, you might curb your leisure costs by planning at-home movie nights rather than hitting the town. There are tons of options to play around with, so keep checking that budget and get creative.
The Motley Fool has a disclosure policy.
HOW THE MOTLEY FOOL CAN HELP YOU
Premium Investing Guidance
Market beating stocks from our award-winning service
The Daily Upside Newsletter
Investment news and high-quality insights delivered straight to your inbox
Get Started Investing
You can do it. Successful investing in just a few steps
Win at Retirement
Secrets and strategies for the post-work life you want.
Find a Broker
Find the right brokerage account for you.
Listen to our Podcasts
Hear our experts take on stocks, the market, and how to invest.
Premium Investing Services
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.