How to Start Saving Money Fast

FT Contributor  | 

The first step of any savings plan is to calculate income and expenses. Unless you have a strategy for increasing your earnings, you will probably generate most of your savings by cutting costs. The equation is quite simple: the more you can cut, the more you can save.  

Reducing costs can help, whether you are saving for the long-term or short-term. However, if you want to figure out how to save money fast, you need a different approach than if you were creating a long-term plan.

Long-term savings plans usually focus on putting away a consistent, realistic amount month after month. If you only have a short time to save a significant amount of money, however, you need to take more-aggressive cost-cutting measures. Significantly lowering your expenses may not be a viable strategy for the long-term, but for quickly growing your savings, it is possible.

Here are some essential things to consider when creating a plan to save money fast. 

1. Set a Specific Goal

Short-term savers should define the exact amount that they need to save. There are two reasons for setting a specific savings goal. First, it will help with your budgeting calculations and help you decide if your time-frame and expense-cutting plan are realistic.

Secondly, having a specific dollar amount will give you a visible finish line. Building a savings account fast requires sacrificing non-necessities. These are activities, services, products that you enjoy, so going without them can be difficult. If you have a clearly defined savings goal, you will know exactly how long you have to forego these enjoyments.

2. Cut Entertainment Spending

Depending on your savings needs and income, you may not need to lead a minimalistic existence during your short-term savings effort. You can start by lowering spending little by little until you reach the desired income-to-spending ratio.

Entertainment and leisure spending is technically not necessary, so it is logical to start your cost reduction efforts here. You can live, function, and carry out your daily duties without movies, restaurant trips, concerts, nights out with friends, or other leisure activities.

You can start by skipping one type of activity or one service that has the most significant impact on your budget. Then, you can cut additional leisure expenses as needed. Technically, you could cut all entertainment spending without impacting your ability to live, eat, and work. However, keeping a few “extras” can help you get through your short-term savings plan successfully. If you do cut all leisure spending, you should be aware that you will not have to go without entertainment forever. If your savings plan is successful, you will be able to go back to your favorite entertainment activities in a few months.

3. Lower Transportation Costs

Transportation can be a tricky budget category. You need to get to work or school, go to the store to buy food, and go places to handle other daily responsibilities. Getting around is a necessity, so the focus should be on finding cheaper means of transportation. If you drive, your transportation costs include gas, parking fees (if any), and car maintenance costs. More affordable alternatives include walking or riding a bicycle. These options are ideal because they are free if you already have access to a bike or have comfortable walking shoes.

Unfortunately, if you have a long commute or if your city lacks pedestrian or bike infrastructure, these options are not viable. You can still save on transit costs by taking public transportation. Most cities have bus or train systems. You may even be able to bring a bike on the train or bus.

If public transportation options are limited in your area, you may still be able to save some gas money by carpooling with other people. You can use apps and rideshare sites to find commuters in your area who are looking for carpool partners.

4. Lower Meal Costs

Like transportation, eating is a necessity. You need to eat, but you can still save a significant amount of money on food. The first step, if you eat out, is to prepare all your food at home. You can even make lunches to take with you to work or school.

You can also perform some research and see if you can save money by buying generic items instead of name brands. You can compare the ingredients of brand name and generic products to see if they are similar enough that you can substitute generic.

If you want to focus your savings efforts on the food category of your budget, you can find cheaper bulk items or canned or frozen foods. If you’re going to cut food costs in this way, you may need to commit to eating the same meals repeatedly during the saving period.

Another option is to purchase bulk foods, cook dishes that you like, divide them into several packages, and freeze them for a later time. A bulk shopping and cooking approach can help you vary your menu so that you are not eating the same dish on consecutive nights.

5. Follow a Saving Challenge

A saving challenge can provide you with a strategy and give you the motivation to stick to your plan until you achieve the goal. One popular budget option is the “envelope method.” In this challenge, you withdraw all the money that you budget for an entire week or month. You create separate envelopes for food, entertainment, transportation, and any other budget categories that you need. You then divide your cash between the envelopes so that each one contains the amount that you have budgeted for that category.

The challenge is to make the cash last until the end of the month (or week). This gamification of your savings effort can be helpful for short- term saving. Also, you can make such challenges part of a long-term strategy once you achieve your short-term goals.

6. Sell Plasma

Cutting expenses is almost always necessary if you need to save money quickly, but you can also try to earn extra cash. Developing consistent sources of income takes time and effort. However, you can earn money immediately by getting paid to donate blood plasma, which medical professionals use to treat certain diseases and chronic conditions. Unlike standard blood donations, you can get paid for plasma because the process is more involved. It usually takes 60 to 90 minutes, and you can earn $20-$50 per donation.

In some cities, you can also donate sperm or eggs at a fertility clinic. Depending on the donation options in your area, you can give once or several times during your budgeting period to help supplement your income.

7. Sell Belongings and Services

Another short-term income option is to sell some of your belongings or offer a service on a freelance basis. If you have a lot of old or unused items to sell, you can even consider having a garage sale or yard sale. If you have a few things, you can post a listing on an online site such as eBay. You should research before listing because some sites charge a fee even if your item doesn’t sell.

You can also look into short-term freelance jobs. It usually takes a while to establish a freelance business. However, if you advertise services in a skill that you already have, you may be able to get some temporary assignments to earn cash quickly.

You can also seek out seasonal positions for the evening or weekend. Stores, restaurants, and seasonal businesses hire extra employees during the summer or over the holidays.

8. Cancel Subscriptions

Subscription services are popular. Perhaps you subscribe to Netflix, cable TV, websites, news sites, or other services that charge a monthly fee. Maybe you are paying for subscriptions that you rarely use or that you can go without for a couple of months. Canceling these for a month or two can help you save a significant amount of money.  

Rather than going without entertainment altogether, you can try to find alternatives to use when you cancel your streaming subscriptions. Broadcast TV is still free, and some streaming sites offer ad-supported programming to viewers free of charge. All you have to do is find enough entertainment to hold you over for a month or two. After you reach your savings goals, you can resubscribe to Netflix and its peers.

9. Automate Savings

Once you have a realistic budget plan for your short-term savings goals, you can put your strategy on autopilot. Most banks allow you to set up automatic transfers between your checking and savings accounts. You can shift all the money that you need to save to your savings account as soon as you deposit your paycheck in your checking.

This automated approach is based on the “pay yourself first” strategy. Paying yourself first means contributing to your savings account before you spend any of your income. By automatically paying yourself first, you can make sure that you reach your savings goals quickly.

10. Stay Home

Staying home is always cheaper than going out. You can cut down on both entertainment and transportation costs by opting to stay in instead of going out. Instead of merely sitting at home, you can plan activities or events. As long as it does not interfere with your budget, you can even invite friends or relatives to have a “night in” with you.  

Saving money fast requires discipline and a workable plan. With the right strategy and some financial discipline, you can succeed in saving money fast. If your saving efforts are successful, you can also translate these ideas to help you build a long-term savings.


Image Source: https://depositphotos.com/

This post was updated December 10, 2019. It was originally published December 10, 2019.