Let’s be honest, at times, saving money can be a slow process. And, when you are only able to save a few dollars here and there, reaching your financial goals can feel like an eternity. But, if you’ve had enough of the traditional, boring process of saving, you’re in the right place. In this article, I am going to cover 10 proven ways to aggressively save money.
So, if you’re ready to get serious about building up your savings, and grab your financial life by the horns, keep reading.
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1. Save Before You Spend
This tip seems almost too easy, but if you want to save money, then do it before you spend a single dime. Seriously! If you want to save $1,000 per month, then move $1,000 into savings every time you get your paycheck, and adjust your lifestyle to live off of what remains.
Learning to save first and spend second completely changed the way I handle money, and almost instantly doubled the amount of money I save each month. You see, for most of my life, I would just save whatever money was left over at the end of each month.
The problem with this method is that it makes the amount of money you save dependent on your spending habits. In other words, if you spend a lot, your savings suffers the consequences. Also, it puts saving money at the bottom of your financial priority list. Not good.
Whereas, if you reverse that process, and instead, save first and live off of what’s left, you are placing saving at the top of your priority list.
This is the most important thing you can do when you want to aggressively save money; which is why I put this tip at the top of the list.
2. Start A Side Hustle
I am a business-minded person, so this is my favorite tip for those of you looking to get aggressive with your savings. If you want to save more money, faster, then why not get out there and make more money?
I mean, you can easily add an extra $1,000 per month to your monthly savings by working a second job at night.
Or, if you like the idea of being your own boss, you could go start a business of your own. From what I have seen, tons of people make a great side, or even full-time living running their own business. Why not you?
If you want to start a blog, stop talking about it, and go do it.
In fact, you should read my post, Blog On A Budget: 10 Low-Cost Resources For New Bloggers. That article will help you start and run your new blog without breaking the bank.
If you want to become a freelance writer, photographer, voice actor, or videographer, then put together a portfolio website, and go drum up some business.
If you can make money pursuing one of your passions, then you should definitely go for it.
That said, if you are going to start a side business with the goal of aggressively saving money, don’t go spending thousands of dollars on an unproven venture. The goal is to make money, not bury yourself in new expenses.
3. Get On A Budget
If you want to aggressively save money, then you need to live on a tight budget. And I’m not just talking about the so called 50/30/20 budget. I mean a zero-based budget with which you account for every single dollar of your income.
As far as I have seen, a tight budget is the only effective way to eliminate financial waste in your life. And if you want to get serious about saving money, waste has no place in your life.
4. Track Your Spending
If you have a budget, but you don’t log your expenses into it, you are defeating the whole purpose. If you want to aggressively save money, you should track your spending by logging every single expense into your budget on a daily basis.
That way, if you start to drift off-course with your spending, or go a little wild with an impulse purchase, you can correct it quickly.
5. Get Out Of Debt
It’s a simple fact, the more debt payments you have, the less money you are able to save. Ipso facto, if you want to increase your savings to a level that could be considered aggressive, then you need to get out of debt.
Seriously, can you imagine if you didn’t have any monthly debt payments? I’m talking about car payments, credit card payments, mortgage payments, student loan payments, the list goes on and on.
I remember when my wife and I first decided to pay off our debt, we were spending nearly $1,000 per month on debt. Fast forward 6 months to the moment we became debt free, and we instantly increased our annual savings by $12,000. Cha-ching!
In other words, I can tell you from personal experience that if you want to aggressively save money, you need to get out of debt.
If the idea of getting out of debt sounds good to you, then be sure to check out our Debt Snowball Calculator. As you might suspect, this free tool will help you calculate your debt payoff timeline using the debt snowball method.
6. Work Overtime
If a side hustle isn’t up your alley, but you have the opportunity to work overtime, then take it! Sure, it might mean extra work, but if you can make time and a half, it’s well worth it.
So, don’t be afraid to take a few extra shifts at work. If a colleague needs you to cover a shift, say yes. If working a morning shift on thanksgiving will get you some overtime pay, then take it.
Working overtime might not be your idea of fun, but if you want to aggressively save money, it is a phenomenal opportunity.
7. Cut Down On Living Costs
I tend to focus on earning more income when you want to save more money, but cutting expenses is just as important.
If your savings account is suffering from a lack of funding, then you might need to get out the financial scissors and start cutting expenses from your budget. Seriously, there is something so satisfying about trimming the fat from your budget. (Or maybe I’m just weird.)
If you’re looking for a few ways to reduce your living expenses, here are a few:
- Cut cable
- Find cheaper car insurance
- Reduce your cell phone bill
- Reduce your internet bill
- Reduce your heating and air conditioning usage
- Turn off lights and watch less tv to reduce your electric bill
- Cancel any unused subscriptions
8. Open a High-Yield Savings Account
If you are trying to aggressively save money, but you are putting all your savings into an account that earns .001% interest, then you need to find a new savings account.
I know the difference in interest between an account that earns .001% and an account that earns 1.6% might only be a few dollars a month. But, money is money, and every little bit counts.
Think of it like this, if you were to save up $25,000 the difference between the annual interest on those two percentage rates is nearly $400. Like I said, it matters.
9. Start Investing
If you want to aggressively save money for a long-term goal, then investing is the best approach you can take. Now, I want to preface this by saying that before you start investing, you should have at least 3 months of living expenses sitting in an emergency fund. Beyond that, there shouldn’t be anything holding you back from investing.
Consider this, if you were to invest your money in an index fund that earns 10% annually, and you invest $2,000 per month, then you would end up with approximately $154,000 after 5 years. In contrast, if you were to put $2,000 into a savings account that earns 2% annually, you would end up with approximately $126,000. That’s a difference of $28,000 over the course of 5 years.
In other words, if you want to aggressively save money, don’t just save it, invest it.
10. Cook Meals At Home
Restaurants are one of the biggest budget killers out there. I mean, if you spend $10 per meal and eat out for lunch and dinner, that adds up to $600 per month, per person. And that’s a conservative estimate.
Therefore, if you want to get aggressive with your savings, then you should cook every single meal at home. And if you really want to get aggressive, just cook big enough dinners to eat leftovers for lunch every day.
Cutting restaurants from your food budget, can lead to hundreds of extra dollars of savings per month.
Saving money doesn’t have to be a slow, boring process. If you just implement a few of the strategies laid out in this post, you can seriously increase the amount of money you save each month.
Now, get out there and aggressively save some money!