8 of the Best Ways to Save Money

If you’re looking for easy ways to lower your bills and pocket more of your income, you’ll find a variety of clever ways to save money, establish healthy habits, and work toward your financial goals.

Saving money doesn’t mean sacrificing everything you enjoy, nor does it require you to spend hours clipping coupons. Small expenses add up fast, but the opposite is true as well. Finding areas to trim your budget, even by just a few dollars here and there, can lead to a lot of extra pocket change at the end of the month.

The 8 best ways to save money

1. Lower your utility bills

Utility bills are a fact of life — you’ve got to keep the lights on, after all. But recurring expenses like utility bills are a great place to look for savings opportunities. Here are a couple:

• Go paperless. Many utility companies offer you a discount for paying your bill online and receiving paperless statements.
• Reduce your usage. According to the U.S. Department of Energy, you can save up to 10% on your energy bill each year if you turn back the thermostat seven to 10 degrees for at least eight hours each day. Be sure to adjust the temperature before you leave and wear appropriate clothing while indoors.
• Keep the shades down. Consider purchasing blackout curtains and keeping the shades drawn when the sun is up. The more you insulate your home, the more you’ll save on heating and cooling costs.
• Schedule an energy audit. Before you make any major changes to your home, get an energy audit done to identify opportunities for improving efficiency.
• Make energy efficiency improvements to your home. When your house is operating at peak energy efficiency, your utility bills will be lower. There are many energy-efficient home improvements that you could make without breaking the bank, including swapping out your lightbulbs for Energy Star bulbs, installing weatherstripping on your windows, and improving your home’s insulation.

Check out more ways to save on your utilities.

2. Lower your cell phone bill

Carrying a cell phone is yet another (arguably unfortunate) necessity of modern living. But that doesn’t mean you need to be paying top dollar or always have the newest model.

• Shop around. Prices for service vary so be sure to compare monthly rates across providers for the service you need.
• Opt for a group cell phone plan. Sharing a plan with your family, friends, or roommates can help you save on your monthly cell phone bill.
• Be mindful of your data usage. Understand the data caps associated with your plan and be careful not to incur any additional fees.
• Avoid upgrading. It can be tempting to snag the newest cell phone as soon as it hits the market, but you’ll save money by sticking with your old phone for a couple more years.
• Have a company negotiate for you. There are some companies that will negotiate your bills for you and take a cut of your savings. For example, the Rocket Money app saves users money by canceling unused subscriptions and negotiating rates with providers.

Check out more ways to lower your cell phone bill.

3. Lower your insurance premiums

Okay, at this point this is feeling like a list of necessary evils we really wish we didn’t have to spend money on, but so it goes. You’re better off having insurance than covering costs in full when catastrophe strikes, but insurance companies have a lot of incentive to attract and keep customers, so there are plenty of ways to save on premiums.

• Compare auto and home insurance quotes. With so many options for insurance, it can be difficult to know whether you’re getting the best deal. Use a marketplace, such as QuoteWizard, to see personalized insurance rates side-by-side and snag the lowest offer.

• Assess (and consider reducing) your coverage. Do you still need the amount of insurance coverage you originally signed up for? Maybe you paid off your mortgage and don't need as much life insurance coverage, or you’re not driving currently and don’t need comprehensive car insurance coverage. Reassess your insurance needs annually and cut back accordingly.
• Ask about special discounts. You may be able to get discounts for safe driving or save by bundling your home and auto insurance policies. Making a larger down payment or paying your premium in full could also qualify you for a discount. Always ask about all available discounts to see what you can get.
• Practice preventative healthcare. Most insurance plans cover an annual primary care visit. Be sure to get a checkup and also see a doctor right away if a problem arises. This can save money on healthcare costs in the long run.
• Quit smoking. Not only will you save a ton of money by not purchasing cigarettes, but you can also reduce your health insurance and life insurance premiums. Some insurers even cover smoking cessation programs if you need a little help kicking the habit.

4. Save on your cable bill (or cut it completely)

In the age of cord-cutting and far too many streaming platforms, do you really even need a cable subscription anymore? Regardless, you’ve got options for lowering this elective expense.

• Cut the cord altogether. Eliminate expensive cable bills and take advantage of as many free or low-cost streaming services as possible.
• Negotiate with your provider. Most cable service providers would rather extend your introductory rate than lose your business to another company. Call when your contract is almost up, and again annually, to see whether you can secure a lower rate.
• Downsize. Choose a less expensive package with fewer channels or get rid of your DVR and use a streaming service instead.
• Bundle. Some companies will let you bundle internet, cell phone service, and cable for one low price. Take advantage of these opportunities to save, but only if you’ll use all of the services included.

Check out other ways to lower your cable bill.

5. Cut down spending on groceries and essential items

Everybody’s got to eat, but with grocery prices rising almost across the board, this necessary expense can really hit hard. But with a little discipline and planning, you can cut back on grocery spending.

• Make a shopping list and stick to it. It’s easy to get distracted by non-essential purchases and leave the store with a year’s supply of cheese. Always make a list of the items you need based on the recipes you have planned and stick to it. Bring someone with you to keep you accountable so you don’t fall for impulse buys.
• Buy in bulk. Assuming you have the storage space, always buy the larger package of dry goods and cleaning supplies, and buy bulk fresh food you know you’ll use as well. Before you do, though, calculate the per ounce cost to ensure it’s a good deal. Typically, bulk purchases are cheaper, but not always.
• Grow a garden. Herbs and spices can be expensive, but growing your own can be fun and save you money. If you have the space, consider starting a vegetable garden as well.
• Drink tap water. Stop buying bottled water and opt for tap water and a Brita filter instead. The filters are much less expensive than the cost of buying water bottles regularly.
• Use a rewards credit card. If you do a lot of your shopping at grocery stores, consider applying for one of the best credit cards for groceries. You can use your rewards for future travel, or redeem them for cash or gift cards.

Consider these other ways to spend less on groceries.

6. Avoid accruing or lower credit card interest

Ideally, you’ll pay off your credit card statement every month and not have to worry about interest. But it’s not always possible to do so. If you’re in the position where you occasionally have to carry a balance, consider taking these steps to lower the interest you pay.

• Set up automatic payments. Automatic payments help you avoid missed payments, late fees, and penalty APRs. Just make sure you have enough money in your account on the date you select for payment.
• Negotiate a lower rate. If you make your payments on time and use your card responsibly, your credit card company may allow you to negotiate for a lower interest rate.
• Apply for a balance transfer card. The best balance transfer cards offer a 0% introductory APR for 12+ months, so you can put more of your money toward debt payments and save on interest.
• Apply for a personal loan. If you have good credit, you may be able to consolidate your credit card debt with a personal loan. This works best when you can borrow enough to cover your credit card balances at a lower interest rate than what you’re currently paying. Check out our picks for the best personal loans.

Again, it’s best to avoid paying interest on your credit card at all. But if you can’t, make sure you’re getting as low of a rate as you can.

7. Search for low-effort or passive ways to save

Sometimes, doing a little goes a long way. Saving doesn’t always have to be an exercise in self-denial. There are just a few easy ways you can cut down expenses and save money without having to think much about it.

• Open a high-yield savings account. Most checking accounts don’t pay interest, and if you have a large balance you’re missing out on passive income you could be earning with a high-yield savings account.
• Cancel unused subscriptions. After all those free trials you signed up for, you’re likely paying recurring charges on your credit card for services you don’t even use. Trim is an app that unsubscribes you from unused subscriptions (like Amazon Prime or other streaming services). It can also help you set up an automated savings plan.
• Take advantage of free offers on your birthday. Give yourself a treat or three on your birthday without breaking your budget by taking advantage of birthday freebies offered by hundreds of restaurants, retail stores, and entertainment outlets.

8. Use roundup apps

Roundup apps automatically save or invest money for you as you spend, rounding up your purchases to the nearest dollar and depositing the difference into an account. Some options include:

• Acorns: When you link a debit or credit card, Acorns automatically rounds up your purchase and deposits the spare change into a diversified investment portfolio.
• Chime®: With a Chime¹ <p class="">Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC.&nbsp;<br></p> account, you can elect to automatically deposit the roundup amount from your debit card purchases into a high-yield savings account.² <p class="">Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.&nbsp;<br></p>
• Qapital: With Qapital, you can set your own roundup rules for automatically depositing funds toward one of your savings goals.

How to save for the long haul

Everything we’ve covered above will help you start whittling down your expenses little by little, freeing up money that you could squirrel away in a savings account. But setting yourself up for long-term savings success will require a little more foresight and planning. To put yourself in the best position for a financially secure future, consider the following steps:

• Work on your credit score. If you don’t have a good credit score, it can cost you hundreds or thousands of dollars per year in interest, insurance premiums, and more. Maintaining excellent credit will help you save.
• Create an emergency fund. You should have at least three to six months’ worth of living expenditures saved in an emergency fund. This will help you weather financial setbacks and job loss.
• Start a retirement account and pay into it each month. Financial experts recommend that you save 15% of your pre-tax salary per year, including employer contributions, in order to retire comfortably. Whether you have a 401(k) or an IRA, saving for retirement and making regular contributions could help you meet your long-term goals.
• Separate your savings. To avoid borrowing from your emergency fund when you want to treat yourself, set up a separate savings account for large planned purchases like vacations.
• Refinance your mortgage. Homeowners refinancing their current mortgage might get a lower interest rate or reduce their monthly payment.

Bottom line

Don’t try to tackle all these savings strategies at once. Instead, use the tips for saving money that require the least effort and will have the greatest impact.

Make a small change to your savings habits each week or a more significant change every month to work toward your financial goals. After a while, these new savings habits won’t feel like extra work; they’ll become a part of your lifestyle.

But saving all that cash won’t do you much good if you don’t have somewhere to put it. The best savings accounts offer generous annual percentage yields of 4.0%+, earning you a little more on top of all that money you’ve put away.