8 Ways to Save Money in 2021
- Author: Bryan Miller
- Posted: 2024-05-20
Saving money is a very important way to set yourself up for financial success. Spending less allows you to put more away for the future, which is essential for building up savings in case of a financial crisis. Here are eight ways you can save money this year to make yourself financially healthier.
Don't Take on Debt
Acquiring debt will only make it more difficult for you to save money. Some debt on large loans you take out such as mortgages and car loans can be good and necessary, but credit card debt can be a spiral. If you have more credit card debt, the company will only charge you more and more interest, which turns into a never-ending cycle of more debt. Be sure to use your credit cards responsibly and frugally.
Lower Your Costs of Living
If you live in an expensive city where all your bill's and essential's prices are through the roof, it may behoove you to move to a less expensive area. There are many smaller cities across the South and Midwest that have many high-paying jobs but lower rents and retail prices, so moving away from the expensive coasts will allow you to save more money and spend less in the meantime.
Think of Your Home as a Home, Not an Investment
Though many people think of their home as a temporary place to live and to make money off of, spending a lot of money on home upgrades without a plan to sell is a waste of money. Real estate prices do rise naturally, but the value of your home only matters as an asset if you plan to sell it. Instead of buying pricey renovations and appliances, you should spend less on what you already have. If you do have a plan to sell it, then you can make upgrades if you are sure you can make a profit.
Choose Your Side Gig Wisely
Though companies like Uber and Lyft may advertise themselves as attractive options to make money on the side, the things they do not tell you can be a dealbreaker. These companies take a large cut of rider fees and do not pay for any driving costs, you whatever you make from driving for rideshare companies may not give you much pocket change after covering fuel and maintenance. You should look through and quantify all the terms and costs before joining a gig company for a side hustle.
Pay Cash for a Car
When you need to buy a car, upgrading for all the latest features and gizmos may seem tempting. Auto loans cover all of these things, but can be difficult to pay back, adding to your monthly bills and expenses. Instead of going into debt, you should save up money beforehand and pay for a car upfront. This will allow you to save more money in the future and discourage you from paying for unnecessary upgrades to the car.
Choose the Right Credit Card
Though they can be a risk, credit cards are an essential tool when use responsibly. Many cards provide high percentages of cash back to attract new users, but in practice, this cash back can be a great financial tool to help with saving. If you put all the money you receive every month in cash back from essential expenses, your savings will steadily grow stress-free. Just be sure to pay your bills fully and on time, because interest will pile up if you do not.
Open an IRA
An important thing to do during your career is to save for retirement. People who saved the most for retirement live out their years comfortably and enjoyably, so setting aside extra money now is worth it. IRAs are a perfect way to start saving for retirement. Those accounts will hold your savings and investments so you can withdraw it without a penalty beginning at age 59. Money you put into a traditional IRA is tax-deductible.
Paying Off Student Loans Immediately is Unnecessary
Many graduates have student loans that they need to pay off every month. However, stretching your payments out over a longer period of time will allow you to save money now and set it aside. Having more money in your savings account will let you pay off student loans later in case of a financial emergency such as job losses or medical expenses. The amount of debt you see at the moment may be stressful, but paying it off slowly and steadily is the safest route to go.
