How to become a money-saving expert?

Saving money offers peace of mind and a more secure future. The better your finances, the more you can focus on what’s important in your life. Become a money-saving expert by using these 10 proven tips we gathered from investors and economists.

Pay yourself first

Ding-ding! Oh, happy days — you just received your hard-earned salary. But who should be the first to have a piece of it? Your landlord or the bank? No, you! 

That’s how money-saving experts suggest you look at saving. Not as an inconvenience or denying yourself nice things, but putting your (future) self first! It’s valuing your long-term financial well-being over instant gratification.

“I’ll save the money left at the end of the month”. We all know it won’t work because there’ll be none remaining. Warren Buffet, the world’s greatest investor and a money-saving expert, has said: “Don’t save what’s left after spending; spend what’s left after saving”. 

Set goals and calculate how much you should save monthly to achieve them. You can have short-term goals like creating an emergency fund (1–6 months’ living expenses) or going on holiday. Long-term goals could include saving for a house or retirement.

Pay off costly loans

Before you put more effort into saving, stop giving your money away as interest. Use the money to pay off your costly loans, and you’ll immediately save the amount you’d spend on interest. 

There are two well-known strategies here. The debt avalanche method means paying off your biggest loans first for maximum impact. But it can often be overwhelming since seeing results takes time.

The debt snowball method suggests you start with the smallest loans. This gives you a sense of accomplishment and gets the ball rolling.

Avoid costly instalment plans. Your washing machine will eventually break down, and you’ll want a new phone at some point. So be ready for these unexpected costs by saving up.

Never lose money

Warren Buffet, one of the world’s wealthiest men, warns against unnecessary risks: “Rule number one: Never lose money. Rule number two: Never forget rule number one.”

Maths proves that cautiousness pays off. Imagine you have €1000 and lose €200 (20%) in a get-rich-quick scheme. How much does the remaining sum need to increase to get back to square one? The answer isn’t 20% anymore, but 25%, since 800 + 20% is only 960.

As you can see, it’s much harder to recover lost money. It can push you into a downward spiral of taking on ever riskier investments to compensate for losses. So, avoid setbacks by not losing money in the first place.

Budget

Budgeting can be tedious; we get it. But you don’t have to count every penny. An easy budgeting method is the 50/30/20 rule or the needs–wants–savings technique.

This method recommends that your unavoidable fixed costs like housing, utilities, food, and transportation comprise up to 50% of your after-tax income. If they don’t, see if there’s a way to bring them down.

30% of your income can go to ‘wants’ or non-essential expenses like dining out, streaming subscriptions, and shopping. The remaining 20% should go to your savings or paying back loans.

Budgeting doesn’t mean you can’t have nice things. It gives you peace of mind to spend the money you have left from bills and savings. 

Make saving easy and spending hard

Set up an automatic transfer to a savings account or separate current account. Also, make spending money uncomfortable. Use a savings account with a delayed payout or don’t have a card for that separate current account.

You can have many different current accounts for greater clarity — one for paying bills, one for savings, and the third for spending money. 

Government or employer-backed savings plans are often the most convenient and cheapest way to save for retirement.

Ask for a raise

It’s okay to ask, especially if you haven’t done so in years. Prepare for the meeting by writing down your recent accomplishments, any courses you’ve taken that have increased your competence, and the praise you’ve received.

Do your research on how much people in your position typically earn and rehearse what you’re going to say. 

If the company can’t afford a decent raise, ask for bonuses that’ll help you save money or for more free time that you can use for a side hustle. Don’t forget to save that extra money!

Sell your car

Owning a car can be one of life’s biggest expenses, along with housing and food. And experts don’t consider owning a car a good investment since it loses value yearly.

Besides the upfront price of your car and fuel, other expenses like insurance, maintenance, cleaning, and parking fees also drain your bank account. Read more about the hidden costs of owning a car. 

It’s possible to calculate if owning a car makes sense for you. But you may want to consider ride-hailing if you have to work more hours than there are in a day to afford a car. For most, owning a car isn’t that essential — indeed, the average car is parked 95% of the time.

Look for cheaper alternatives

Where possible, see where you can cut costs by looking at cheaper alternatives:

• Look for more affordable phone or TV provider deals (or use a vendor’s offer to get a better price from your current provider);
• Check your bank’s fees and see if there’s a cheaper option on the market;
• Buy clothes from second-hand shops, thrift stores, and Facebook Marketplace, or look for discounted end-of-season stock;
• Attend free events in your community;
• Repair shoes and clothes if possible;
• Rent instead of buying if it saves money; 
• Aim to live a minimalist lifestyle.

Save money while shopping for food

Use the age-old proven rules: make a shopping list, eat before going to the store, shop less often, take advantage of discounts or coupons, and shop online. 

You can prevent unexpected spending and food waste by planning your menu. Check out this healthy grocery list for reference.

Online grocery shopping services like Bolt Market will help you save money by reducing emotional purchases. You’ll also save the money you’d spend on the commute and an hour of your time.

With the Bolt Food app, you’ll always see the cost of your shopping basket. Your purchase history will also help you with budgeting. Furthermore, you can just copy last week’s order, stopping you from making unnecessary purchases.

Make extra money with a side hustle

You can save money by living on instant noodles, but where can you go from there? Money-saving experts stress that you can only save 100%, but you can increase your income infinitely.

Start a side hustle to make extra money. Think about the skills you already have or if you could learn one (there are plenty of skills you can pick up with free online courses). Check out our post about low-cost money-making hobbies.

One easy and hassle-free way to make extra money is to become a Bolt driver or Bolt Food courier.

Feeling like a money-saving expert already?

We hope you got some great tips for saving money. Getting your finances in order may take some time, but it certainly pays off in the long run.

If you want to save money on groceries, try Bolt Market. You can also give it a go if you’re eager to start budgeting and don’t want to spend the next hour in the supermarket.

Download the Bolt Food app and get groceries delivered to your door.

Disclaimer. The opinions expressed in this blog post are for general informational purposes only and are not intended to provide specific financial advice or recommendations for any individual or on any specific security or investment product.