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How Much Can You Save?

Jocelyn Black Hodes, DailyWorth's Resident Financial Advisor

Ready, Set, Save!


Most of us have an excuse or three for why we can’t save money. But, admit it: the truth is usually not that we can’t save; it’s that we won’t save. Spending money is usually way more fun, and much easier to do, than saving it. Plus, we live in a society that conditions us to spend and the cost of living is continuously increasing, which makes saving all the more difficult. And yet, the reality is that saving is more critical today than ever.

So how to do it? The key to saving is to make it as automatic and effortless as possible. Treating it like a game and following some simple rules can help a lot. So, in the interest of fair play, we’re doling out 7 savings challenges to get motivated to ditch the excuses and start accumulating wealth. 

The DailyWorth staff and contributors will be trying some of these out ourselves. We hope you do too. Please let us know what worked and what didn’t, how much you saved, and anything else you want to share. You can leave your comments in the section below or send them to us via email at editorial@dailyworth.com. We’ll include some of them in a follow-up story. What do you say? Challenge, accepted?

Challenge #1: Pay Only With Cash


If you have a good sense of your monthly discretionary expenses (food, clothes, etc.), set yourself a reduced monthly spending budget and get that amount in cash. If you usually spend $1,000, try $500. If you usually spend $500, try $300. Put it in your wallet or a separate envelope and only allow yourself to spend what you have in cash for the month. You’ll be amazed how much more mindful and cautious you are about what and how much you buy. But the savings (and we’re talking potentially thousands over the next several months) will be even more amazing!

Challenge #2: Save All Your $5 and $10 Bills and Change


Any time you get a $5 or $10 bill or get coin change back, take it out of your wallet and put it in a special container at home. It may sound silly, but if you do it, your savings can add up fast. Think about this: just one $10 and one $5 bill saved per week adds up to almost $800 in a year. And that doesn’t even include the change. Think that doesn’t seem like much? If you take that money and invest it each year, you can have $100,000 or more saved over time (thanks to compound interest and based on average annual returns). If you use a glass jar, you’ll love the visual of seeing it fill up. Just keep the jar off-limits!

Challenge #3: Eat Out Only Once A Week


Eating out at restaurants is one of the biggest threats when it comes to saving. Allow yourself to eat out for lunch or dinner only once a week. The rest of the week, brown bag your lunch and cook at home. Obviously, it will help if you plan out your weekly meals ahead of time and grocery shop accordingly (using only what you have available in cash, of course!). 

You can also dedicate one day per week (Sunday is usually good) to cooking large dishes of food you can refrigerate or freeze and use throughout the week for either lunch or dinner.  Make it fun by getting your colleagues to do it with you and plan a potluck salad day each week. Not only could you end up saving thousands of dollars each year doing this, but you might also save thousands of calories each day! How’s that for a bonus?

Challenge #4: Lose the Store-bought Latte


Just buying that one grande iced latte a day could add up to over $1,600 a year! Instead, invest in a decent machine you can use at home to prepare your own barista-esque drinks. The machine might cost you $100 or more, but you’ll save a lot more money if you actually use it and avoid coffee shops. If it’s the activity of leaving to get coffee that you like, take a break instead to walk a few blocks and get some fresh air. And if you really can’t help yourself and accidentally end up in a Starbucks or the like, try a small cup of coffee instead of the overpriced coffee cocktails. It could save you thousands of dollars and unnecessary calories!

Challenge #5: Buy In Bulk and Split It With a Friend


Make a date once or twice a month to hit the grocery store or warehouse store like Costco, BJ’s or Sam’s Club. Buying groceries in larger quantities usually means big savings, especially if you plan ahead and have coupons to help. Shopping with a friend or two and splitting items can help you get the best bang for your buck and avoid wasting food and having too much to store at home. It’s also more fun. 

Just make sure to have a list of what you need before you go and try to help each other avoid the temptation to buy off-list. Take it one step further after your shopping trip, and spend some extra time with your shopping buddy cooking a few dishes in bulk that you can split and use for the next week’s meals. 

Challenge #6: Use Visual Reminders


We all have goals, whether it’s paying off debt, moving, taking the vacation of a lifetime or starting a business. The challenge is staying focused enough to work towards achieving them and actually succeeding. A really simple and easy way to help you stay on track is to create visual reminders of your goals and to put them in places where you can see them on a regular basis. 

It may seem corny but, trust me, seeing a reminder of your goals every time you get in your car, or leave your home, or look in the bathroom mirror, or open the refrigerator--or, better yet, your wallet--will go a long way in helping you keep your priorities in check. Get creative and have fun with it using colorful post-it notes, photos, inspirational quotes, etc. 

Challenge #7: Automate Your Savings


This may be the easiest of the bunch because automation forces you to save whether you like it or not. (The one thing you need to watch out for is accidentally overdrawing your account, if you fail to consider other costs.) All it requires is setting up a monthly transfer from your bank account to a separate savings or investment account. Even if the amount you begin with seems small, those steady and consistent savings can make a big difference over time, especially if you continuously increase how much you automate periodically (use a reminder to do so).

If you pick a challenge--and we hope you do--let us know what worked and what didn’t, how much you saved, and anything else you want to share, either in the comments below or via email at editorial@dailyworth.com.

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