One of the best ways to save more money in 2020 is to spend less money in 2020.
Here are 20 suggestions on how to do just that. They’re only “suggestions” because what you find may work for you may not work for somebody else.
So, give each one a read, then weigh whether the idea could really make cents for you and your situation. Even adding just one idea could lead to more savings, and if you’re able to implement a few, who knows, your bank account may look far healthier and richer a year from now.
1. Read the fine print
As you get older, you’re more likely to require medical attention. That’s just the nature of things. But what you don’t have to accept is getting stuck with a prodigious bill because you didn’t know what a certain policy was. Take Medicare A, which ensures your right to hospital care and is available without cost to every 65-year-old person who qualifies for Social Security.
Under Medicare rules, however, if you’re hospitalized under “observation status” rather than being formally “admitted,” you could be on the hook for the cost of your treatment. In other words, if you were hospitalized under observation status while certain tests were conducted, medications administered and surgeries performed, you, not Medicare, would have to pay.
Congress passed the Notice Act in 2015, which requires hospitals to inform patients of the implications of their observation status within 36 hours after observation services have been initiated. But in those 36 hours leading up to notification, you could rack up a lot of charges.
What’s the solution? If you are scheduled to be hospitalized for elective surgery, get a written statement from your surgeon and from the hospital that you will be admitted and not placed under observation.
2. Set a goal—know why you’re saving
Saving is a lot easier when you tie it to a purpose or goal. Do you want to travel to a place that’s always been on your bucket list? Do you want to pay off a big debt? Do you want to have more money for the holidays next year?
Then, think of saving not as a sacrifice or as something you’re giving up, but as an opportunity to do more for yourself, or even the world.
Many companies, and people too, are conducting themselves with ESG (environmental, social and governance) goals in mind. For instance, instead of jumping into the car and running to the supermarket every day, you might shop just once a week. Your change in shopping habits may require a grocery list and more meal planning, but your efforts could lead to fewer impulse purchases and a reduced carbon footprint.
3. Budget better
Without a budget, it’s easier to spend more money than you have. If you have just gone through the holiday buying-and-giving season, you know how quickly your expenses can add up — a dinner out here, a holiday trip out of town there, gift purchases for your family, friends, and coworkers.
Even if some bills or expenses come only semi-annually, like your property taxes, you should break them into monthly obligations, with appropriate budget set-asides, so you can better deal with them.
While creating a budget isn’t rocket science, it should contain processes, procedures and some kind of accountability component that you can measure and use to tell you whether you’re hitting the mark.
4. Get rid of high-interest debt
You have to manage your debt; don’t let it manage you. So, if you want to boost your savings, stop throwing your money away on high-interest debt like credit cards or payday loans. If spending reductions aren’t enough, consider a debt consolidation loan or a reverse mortgage loan (for those 62 and older) to reduce the high-interest load you’re carrying each month.
5. Vacation more affordably
Just a little adjustment in your “altitude” could yield big savings. Don’t pay the airline’s big mark-up on food and snacks you can easily purchase and bring on board yourself. Instead, before boarding, pack a lunch or dinner worthy of a first-class ticket, maybe some fancy cheese and a baguette. Just be mindful that some cheeses as well as salad dressings, jams or jellies, maple syrup, cranberry sauce, ketchup, and other condiments, dips, spreads, salsa or peanut butter, each need to be limited to a 3.4 ounces or smaller containers and kept together in a single, pint-sized, clear storage bag or they will be discarded by the TSA.
And who says you have to go jet-hopping to make you feel as if you’ve gone somewhere. Instead of trying to run away from the town you happen to live or work in, rediscover its hidden charms. If you live in a large city, you may find it impossible to exhaust all its secrets.
If a staycation isn’t for you, consider ways to reduce your lodging costs. Although you may associate hostels with youth, hostels are equally great for business people, retirees, and even family vacationers who just want a clean bed to sleep in and a safe place to stash their luggage while they explore a new city. Sharing a room with other people could save you hundreds of dollars and put you in contact with some very interesting people (and characters) that you may not otherwise have a chance to meet. Imagine the stories you’ll have to share back home.
6. Go carless
Accounting for fuel, maintenance, insurance and registration, the average annual cost of operating a new car is now more than $9,000 ($9,282) or $773.50 a month, according to AAA.
Since a new car reportedly loses 20 percent of its value once you drive it off the lot, you could buy a used car to reduce your transportation expenses, but imagine the savings if you went carless altogether.
Such a decision could involve some dramatic lifestyle changes, like moving closer to work, taking advantage of ride-sharing services and using public transportation and car rentals more often, but just think of those savings — not to mention that you would be taking one more car off the road.
7. Improve your credit score
A better credit score can do wonders for many aspects of your life. Besides helping you secure lower interest rates on credit cards, auto loans, and mortgages, leading to thousands of dollars in potential savings, a better credit score can improve your prospects of getting a job or beating out 10 other people for the apartment you want.
To see exactly what your credit picture is saying about you, you can pull your credit report once a year for free from each of the three main credit bureaus: Equifax, Experian, and TransUnion. Visit www.AnnualCreditReport.com. The reports will reveal a lot about your payment history, such as missed payments and overdue accounts, which could be dragging your credit score southward.
Remember, you can’t fix a problem until you know it exists.
8. Take your privacy and online security seriously
In 2018, American consumers reported losing on average $1.48 billion to fraud, an increase of 38% over 2017, according to the Federal Trade Commission. But for those in their 70s, the amount lost per person ($751) tended to be higher than the amount lost ($400) by people in their 20s.
Here are a few tips to help you counteract this alarming trend:
- Set alerts (usually a one-time set-up) on your bank account and credit card transactions.
- Routinely check your financial accounts and credit reports for fraud.
- Use unique passwords that don’t reflect public information such as your birth year, or one of your child’s names, etc.
- Don’t respond directly to inbound calls, emails, texts or alerts from those purporting to have important financial information. Rather call them on an official, verified number from the caller ID or message to transact with them.
9. Avoid the steady drip of mindless purchases
A cup of coffee out used to cost a dime but at $5 or more a cup, if your barista dares to add more to your brew than cream and sugar, you might want to reevaluate your daily caffeine addiction. For instance, you could whip up your daily grind at home for 20 cents a cup.
But we’re not just picking on coffee. Bottled water can also be a major money drain. According to a Business Insider article from 2013, bottled water costs 2,000 times more than water out of the tap.
Again, if your goal is to save money (and spare a few landfills), this might be an idea you want to tap into. If you believe the taste of tap doesn’t measure up, invest in a water filter, which is the same technology that many bottled water companies use.
10. Increase your DIY skills
With each passing year, America becomes more of a service economy. For a price, you can hire someone to mow your lawn, walk your dogs, deliver your groceries, serve as your personal chef or be your personal trainer.
When it comes to your home’s maintenance, you can find someone to fix virtually anything that goes wrong. And while that should provide you with great comfort, this convenience (some would say, luxury) can also strain your budget.
Even if you don’t think you possess handyman skills, and prefer leaving plumbing, electrical and other fix-it tasks to the professionals, there is still a lot you can do on a prevention basis to keep your home maintenance costs down, such as changing air filters, cleaning dryer vents and clearing debris from gutters. Each task you can do yourself leaves more money for other things.
11. Cancel unused subscriptions
Unused subscriptions have a way of piling up the way barnacles do on the underside of a boat. To scrape them clean, thereby freeing up extra cash, online services from old-line banking services such as Goldman Sachs Group Inc., Wells Fargo & Co., and Discover Financial Services are assisting users in finding recurring fees and in some cases canceling or renegotiating their costs.
12. Spend more time walking
We could have said, “Spend more time exercising,” but then you might have been tempted to join an expensive fitness center or buy a fancy gym outfit to impress others.
If you’re going to spend any money at all, start by investing in a podcast that you can listen to while you walk.
The best thing about walking is you can do it practically anywhere — a sidewalk, a parking lot, a local park, the mall. The benefits of walking extend beyond just physical fitness. Putting one foot in front of the other can open up the free flow of ideas, improve your memory and mood, and even help you sleep better.
When you’re walking, you’re not spending. Using your smartphone while walking to order something online is strictly against the rules.
13. Stick to the 24-hour rule
Online retailers are making it easier than ever to purchase their wares — order four or five pairs of shoes, keep what you like and return the rest, incurring no shipping expense.
Some of those returns, however, may linger in the trunk of your car or disappear in a closet before you get around to shipping them back. Forgotten or misplaced items, at least until they’re returned, mean missing money from your credit or debit accounts.
Rather than loosely buying every “what’s new” item you see on your favorite shopping site, follow the 24-hour wait rule before depositing the item in your shopping cart. Chances are you’ll find the exact same offer the next day — often at an even better price.
14. Don’t automatically spend “found money”
“Found Money,” such as an unexpected tax refund, work bonus, or payout from a class-action suit, doesn’t mean you should automatically go treat yourself, as deserving and wonderful as you may be. Since the money wasn’t there to begin with, it’s not as if you’ll miss it.
15. Celebrate a no-spend day
More and more evidence is accumulating that intermittent fasting is good for the body. So why can’t what’s good for the body also be good for your financial health? Instead of hopping in the car and running to a restaurant on the weekend, pursue no-spend events, where no money leaves your bank account. Watch a classic movie, take your dog for a walk around the park, go on a picnic. Get creative!
16. Trim your streaming services
Are you now paying more for your streaming services than you once did for cable? In this second golden age of TV, you are not alone in paying for multiple streaming services from Disney + to Amazon Prime to Sling to Netflix.
As entertaining and thrilling as the current state of TV is, don’t forget that many of its greatest storylines are pulled from that original content-provider, namely, books, which you can often pick up for a pittance at a yard or estate sale. According to Forbes, the average American subscriber watches 3.4 services. For each one, they pay an average $8.53 per month. By being a little more selective with your streaming choices, you can pare down that bill.
17. See your dentist
Everyone is familiar with the saying, “You can pay me now or pay me later.” Dentists probably invented it, because they know that paying for a little prevention now (such as regular cleanings, x-rays and fillings) can spare bigger and more costly dental interventions in the future.
Your dental health impacts your general wellness, as well. Studies have linked gum disease to an increased risk of cardiovascular disease, for instance, which can cause a life-threatening heart attack or stroke.
18. Get rid of your storage unit
America is a nation of hoarders, evidenced by the nation’s $38 billion self-storage industry. According to “Curbed,” one in 11 Americans pays for space to store their material overflow, at a cost of $91.14 a month.
Again, that’s real money. So, instead of storing your stuff, sell it, repurpose it, or donate it, for which you might even receive a tax deduction. Otherwise, over time, you could find yourself spending more to store these less-frequently-used items than they are collectively worth.
19. Get a programmable thermostat
What’s similar to watching your money go up in smoke? It’s heating or cooling a room when you’re not in it.
Some programmable thermostats cost as little as $50, and you will most likely recoup your investment within a year or maybe even just a few months. You can program it for while you are sleeping, for the weekend, when you are on vacation, and so on.
20. Automate your savings
If you’re like most people today, you probably make more purchases with your bank cards than with cash. Consequently, you likely have less loose change to throw into a piggy bank, if you own one at all.
No worries. Several fintech (financial technology) companies have stepped up to be your digital piggy bank. Say you purchase a cup of coffee for $2.75. Your digital savings app will round it up to $3 and put the 25 cents in your savings account.
To get you started, here are five automated ways to boost your savings: Acorns, Chime, Qapital, Digit, and Qoins.
Adopting a money-saving mindset can be fun. Maybe the best part is all the creativity involved. Try implementing one or two money-savings measures at first, like automating your savings or walking every day, and then maybe graduate to bigger tasks down the line, like teaching yourself how to fix a leaky pipe or a broken window.
All your efforts, big and small, should combine to make you richer in 2020. Go for it, and good luck!
We hope this article has given you some help with things to think about. Of course, every situation is different. This information is intended to be general and educational in nature, and should not be construed as financial advice.