Let’s be real, saving money is hard work!
Saving six figures in five years isn’t easy, but we did it and so can you. These 5 money saving tips will help improve your finances beyond your wildest dreams.
We used these 5 simple money saving tips to go from 22-year-old, broke newlyweds living on one income to money pros who share the desire to “live like no one else, so later we can live like no one else.”
Related articles I recommend:
- Create Better Money Habits By Kicking These Bad Ones
- Retirement Planning: Grow A Million Dollar Nest Egg
- Free Printable Budget Binder: Make Saving Money Easy
- How To Save Money As A Single Income Household
Create a Money Saving Mentality
Having a money-saving mindset is critical to actually saving money. If you aren’t dead set on saving money there is a really good chance that you won’t be able to save money. You really have to want to see your accounts grow. Once you see them start growing, use that as motivation to start saving more.
When we saved $20,000 In One Year we made a tracker to see how our money market account grew. The more we saw it grow the more excited we got and we found new ways to save even more money.
Saving money is contagious!!
However, it’s not going to grow overnight and that might be a little discouraging. You have to be prepared for the reality that it’s going to take time.
Consumerism is at an all-time high and we are programmed to buy, buy, buy. We know, we used to be that way too! It’s time to end this continuous cycle of working for a paycheck and then giving it all back to the economy.
Want to know how we broke this never-ending cycle? We don’t spend what we don’t have. You heard me, if we don’t physically have the money for something we don’t buy it. We use a cash envelope system for our spending money.
If you haven’t started using the cash envelope system in your daily life, just do it, you won’t regret it.
If you don’t know what that is, I highly recommend checking out Dave Ramsey’s Total Money Makeover. This book is what changed our mentality and kick-started our journey to financial freedom. It has a ton of really great financial information, including the envelope system, and it will motivate anyone to save money.
Seriously, if you haven’t read this book you need to!
Set Money Saving Goals
This is a really important step no matter how much money you want to save. When we started saving and investing we set our sights on a number, that number was $100,000. At the time it seemed crazy and we weren’t sure it was even possible for us to save that much but you know what, we had a goal and we were determined.
Fast forward 5 years, we reached and exceeded that goal by a significant amount and you can too! It all starts with setting your goal.
So what is your goal? Are you looking to save a lump sum of money, do you want to pay cash for a car, or are you looking for a down payment on a house? Whatever it is, write that goal down and put it somewhere you will see it every day. Setting goals is what’s going to lead you to success.
I remember exactly where I was sitting when I made the goal to save six figures in five years. At the time we lived in Everett Washington, I was going to college, and we were newlyweds living off David’s enlisted military salary. When I made this goal I’m pretty sure David laughed at me, but hey look who’s laughing now…
This goal, your why, is what’s going to lead you to success.
My Favorite Money Saving Tip: Create A Budget
This step is where you start finding extra money. Budgeting is going to be a crucial part of saving money. When we started our trek to six figures, we decided to budget really tight. I don’t think we ate out a single time in 2016, not once, because we didn’t have room for it in the budget.
It became a game between us to see who could find more ways to save money each week. So make saving money fun! Now you don’t have to be that crazy, but when you create your budget you will be able to see where you can cut expenses and save more money.
When you look to cut your expenses, look for things like unused subscriptions, excessively high cable/internet bills, and any unnecessary spending. Again, I recommend using the envelope system to help you cut unnecessary spending.
If you don’t know what a cash envelope system is, you should check out our Beginners Guide to the Cash Envelope System. It’s a pretty detailed guide that can help you get started using this system. Even if you have used the cash envelope system it will probably have some useful tips in there for you.
I really love using this Grocery Coupon Binder as my envelope because it helps separate my money and it’s super cute and affordable!!
As you are creating your budget and looking for ways to cut expenses, get creative. I compiled a list of creative ways to save money in hopes that it makes this step a little easier for you.
Pay Off Debt Now
I’ll keep this one short and sweet.
If you have debt, pay it off as fast as you can. It makes it really hard to save money if you have a mountain of debt to pay off.
With your budget in place, you should be able to see where you have debt and start focusing on paying it off. Pay off the smallest debts first and then use that money to pay off the next biggest debt.
Continue this trend until all your debt is gone.
Save, Save, Save And Then Save More
So what are we here to talk about, money saving tips, that’s what. Saving money is the crucial step to financial freedom that many of us struggle with. Well, not anymore!!
By now you should have your budget dialed in and cut all the expenses you can think of. With all of that done I wanted to remind you of a few other ways to save money.
Make sure you are paying yourself first! Before you pay bills or go shopping, set aside some money for savings. By doing this you won’t be tempted to use it to buy something you don’t need. If you can set up to have some money from your paycheck direct deposited to your savings account, that’s even better.
If you are lucky enough to have a job that pays a yearly bonus or even gives out spot bonuses, save that money. Do not go spend that money because you think you need to splurge.
If that money is burning a hole in your pocket then run to the bank as fast as you can. Deposit that money into an account you won’t touch, don’t allow yourself to spend it. Along the same lines as a bonus, if you end up with a tax return at the end of the year save that money too.
Or use it to pay off your debts.
Our Favorite Ways To Save And Make Extra Cash
- Cut out cable, for good. This is one of the easiest ways to save money each month. There are many other great options that still allow you to watch your shows. Our favorite is Hulu. We pay $8 dollars a month to watch our favorite T.V. shows. Click Here to start your 30 day free trial.
- Start living below your means. Every financially independent person will tell you this is the key to staying out of debt and saving money.
- If you are looking for a cheap phone service and your local phone company isn’t working for you check out Republic Wireless. I have only heard great things about their 4G service. They have Unlimited Talk & Text plans starting at $15 a month. Another great thing is you don’t have to sign a contract!
- Always shop with a website like Ebates when you’re shopping online. They give you cash back when you shop your favorite stores such as Target, Kohls, Amazon, Walmart, Nike and many more. When you sign up with our link you get a free $10 gift card with your first purchase of $25 or more! So sign up today to start making money when you shop online.
- Join Swagbucks. Swagbucks is awesome and if you haven’t tried it out you have to! It’s free to sign up. You can take surveys, watch videos and shop online to earn Swagbucks. Cash in your Swagbucks for gift cards to some of your favorite stores. Who doesn’t love gift cards!! So next time you are watching TV, jump on Swagbucks and earn yourself some gift cards.
- Check out our post 40 Ways to Make Extra Money this includes easy ways for you to start making money this week.
Bonus Tip: Investing
With all that money you’re saving, it’s time to make it start working for you by investing. Investing has been a big part of our strategy to hit the $100,000 goal we set and it should be part of yours too. In fact, in the month of January, we made more off our retirement accounts interest than David did all month at his 9-5 job!
Whether you choose to use a money market account, mutual funds, or IRA’s, I recommend finding somewhere to put your money that will get a bigger return rate than your standard savings account. Leaving your money in a savings account is essentially wasting valuable time and dollars that you could be investing.
Compounding interest is your friend and the sooner you start the better.
We chose to invest our money in mutual funds. This is a great option for anyone wanting to save money over a long period of time. So you have to be willing to let your money sit for at the very minimum 5 years.
We have our money divided into 3 different funds:
- Two high-risk funds. These funds are mostly focused on the United States. We figure since we are young, we can be a little more aggressive with our accounts. Once we get closer to retirement we will dial them back to be a little more conservative.
- A foreign-based fund. You always want to make sure that you diversify your portfolio.
This strategy has worked for us but does come with its share of ups and downs. We have seen the accounts swing from really far in the red to even higher into the green. It’s kind of an emotional roller coaster but we held out and are rolling in the returns now.
Whatever method you choose for investing I suggest doing your research beforehand. There are so many good books to choose from out there, pick a couple and educate yourself before you start investing. Most banks also have personal advisors, I recommend sitting down with one and picking their brain first.
I wanted to share our story with you hoping that it will inspire you to build your savings. Whether it’s for a rainy day, retirement or anywhere in between, it’s never too late to get serious about saving money.
Here are some other articles I recommend that may help you save money, so you can save 100k too!
- The Cash Envelope System: The Beginners Guide
- 30 Things To Do On A No-Spend Weekend
- Easy Ways To Save Extra Money
- 40 Ways To Make Extra Money
If you have your own unique story make sure to share it with us! Any goal reached, no matter the size is a victory in our book.
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Our Favorite Resources
Ibotta: This is by far my favorite app to get cash back when I shop in stores or online. Whether I’m buying groceries or going to Target for everyday essentials, Ibotta has great deals that you need to take advantage of! The other day I got $1.20 cash back from a $3.60 box of granola bars. When you signup with our link you’ll get a $10 welcome bonus.
Credit Sesame: Have you checked your credit score lately? I recommend checking your credit score at least once per year. My choice for getting a quick and FREE credit score check is Credit Sesame. They require a minimal amount of information to get your credit score and they have a bunch of other useful finance tools at your disposal.
Affiliate Marketing Help: If you run a blog and need help with your affiliate marketing game, you have to check out Making Sense of Affiliate Marketing. This extensive course shows you everything you need to monetize your blog. Making Sense of Affiliate Marketing has seriously changed the way we look at blogging and has helped us grow our blogging income substantially.
Ebates: If you do any shopping online you need to check out Ebates. Much like Ibotta, Ebates will give you cash back when you shop online at your favorite stores. They partner with over 150 stores so you’ll be sure to find a store you love. Cashback amounts range from 1% up to 15% or more. When you sign up using our link you’ll get a $10 welcome bonus on your first purchase of $25 or more.