Here Are Some Top Money Saving Tips For 2022
Look, times right now are ROUGH. We're (hopefully) on the back end of a world-altering pandemic that's lasted for two years full of shuttering companies, record inflation, skyrocketing oil prices and now a war in Asia that's affecting your wallet in ways you didn't know were possible. Rents are up, home prices are "unaffordable" and the stock market is sideways.
Related: The Beginner's Guide to Inflation
All of this means that it's more important than ever to have some cash on hand, but how? Where do you even start? Well...that's why you're here! Today, I want to cover some of my favorite ways to save some extra cash. I use each and every one of these tips in my daily life, which has let me save over $5,000 in the last year in money I barely noticed was gone!
Are you on your wealth building journey, but need a cash boost? My friends at Albert are giving you a $150 bump in your cash account when you open a new account using my link! Thanks to Albert for their support.
Make a Budget and Memorize It
Budgeting sucks. It sucks! It's like a diet in that you know it's good for you, but you in no way want to actually stick to it. Budgeting is the thief of joy when it comes to retail therapy, but it can actually make your life much easier and just generally better. Hear me out.
The 50/30/20 Budgeting Method
There's an extremely simple way to budget that's tried and true, and I love it. It's called the 50/30/20 method, and here's how it works:
50% of your post-tax monthly income should be allocated to "needs." That means rent, mortgage, car payment, groceries, medication, utilities, etc. Anything that you absolutely need to survive belongs in this category.
30% of your post-tax monthly income should be allocated to "wants." This means dining out, subscription services like Netflix, payment for credit card annual fees, saving for vacations, etc.
The last 20% of your budget should be allocated to saving, investing and paying down debt. Ideally, you would allocate this 20% first in a method called "paying yourself first," but this is the most flexible part of the budget. Shit happens, and when that shit happens, you can use this part of your budget to cover whatever disaster you're struggling with at the moment. This is the money you allocate to your emergency fund, your Roth IRA, your taxable brokerage and your debt paydown like outstanding credit card debt.
Automate Your Budget
Making a budget doesn't mean you have to sit at the kitchen table each Sunday with a pen, receipts and a checkbook like your parents used to do. It's 2022. We have technology to deal with this shit now, so use it!
Most banks, in their nonstop quest to catch up to FinTech competition, offer some kind of budgeting tool within their mobile banking app that will analyze your spending and give you alerts on if you are spending too much or too little.
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Or, you could go with my preferred method and use one of those FinTech companies built from the ground up for this exact purpose. There are quite a few (Digit, Truebill, Chime, etc), but my favorite is Albert. Albert analyzes my spending each month and alerts me when my spending has exceeded my normal monthly spending on all categories. It also compares my spending to national averages to see where I could cut back, and it saves a bit of money for me each day so I can build up my emergency fund faster.
Related: Albert Banking and Investing Review
Save Money With a New Grocery Store
This one hits closest to home for me. For the last three years, my wife and I got our weekly shopping done at Publix, a grocery store that's local to the American southeast. Publix stores are clean, well-stocked and have pretty friendly staff. They're also mind-bogglingly expensive, but in an understated manner. Every week, I would walk out of Publix with my grocery haul, but I'd also be $200 lighter. This really added up, resulting in us spending nearly $1,000 per month on groceries.
My friend suggested we try the Aldi down the road for some of our shopping, which I ended up using via Instacart because I'll be damned if I have to pay a quarter to rent a shopping cart. I got my week's grocery trip shopped for me and placed in the back of my car, all for $60 per week!
There were some odds and ends I had to go to Publix for anyway, so the bill was closer to $100 per week, but we ended up saving nearly $600 per month on groceries, just by switching stores!
Open a New Credit Card (Seriously)
As a millennial, I was always taught by my parents that credit cards are bad. To the previous generation, credit cards were a way for someone to grosely overspend and then get caught in a cycle of debt and despair, all while offering very little upside. Don't get me wrong; they still can be. Credit card debt is a real problem in this country, but millennials and Gen Z are getting smarter about how to leverage credit cards for their gain.
Basically every credit card nowadays offers some form of sign-up bonus for opening a new card. This is usually in the form of a statement credit (effectively functioning as the credit card company cutting you a check) or bonus points in whatever currency that card offers.
For example: the American Express Gold Card is currently offering some consumers a 90,000 point sign-up bonus with $4,000 of spend in the first four months of an account opening. After that sign-up bonus, the card still gives you 4x points on groceries and restaurants, as well as monthly statement credits for services like Uber, all for a $250 annual fee. With the sign-up bonus, points multipliers and credits, you are extracting over $1,000 worth of value from the card, giving you a net benefit of over $750.
My favorite card for bonuses and perks at the moment is the American Express Platinum Card. I recently signed up for this card and received monthly statement credits for a Walmart+ membership. Curious, I signed up and tried out the grocery delivery feature (groceries again, I know, but bare with me). I cut my weekly grocery bill down AGAIN because of this service, so I'm going to factor that into the card savings I'm receiving.
Thanks to the sign-up bonus, the points multipliers, the monthly credits and the Walmart+ savings, this new American Express Platinum card is netting me about $2,000 this year!
Use Budget Envelopes
Alright, let's say you're someone with a crippling fear of efficiency and success, so you don't want to take my above recommendations to save money. You're now in what I would call "damage limitation mode" with your budgeting, but don't worry! I have a solution for you: Budget Envelopes.
Budget Envelopes are a time honored tradition that were much more relevant to our parent's generation, but it's the use of cash in physical envelopes in order to limit your spending.
If you want to spend $500 on dining out this month, you would take $500 worth of cash and put it in the envelope. When that money is gone, you're done dining out! Do you have cash left over at the end of the month in that envelope? Put it in a special "Savings" envelope and *BAM* you have yourself a nice little savings fund.
The Downside of Budget Envelopes
OK clearly this is not my favorite method, but it is effective. However, there are some downsides to this that you should consider before you go full bore into your daily ATM cash limit.
When you use cash, you won't get any credit card rewards points or cash back. Essentially, you'll be paying full price for everything, which is avoided with credit cards thanks to rewards points and cash back ratios.
Another downside? It's back to the "bro it's 2022 we have technology" argument. During the pandemic, many businesses stopped accepting cash for payment, instead opting for contactless card readers. Truist Park stopped taking cash in 2021 when fans came back to baseball games, and SoFi Stadium stopped taking cash as part of a marketing promotion with Visa during the 2022 Super Bowl. If you subscribe to the physical envelope method, you're SOL.
Shop Around for Insurance Rates
I feel like this one is criminally underrated by people that complain about money all the time, but one that is used heavily by those in my life that are great with money. Aside from your mortgage or rent, insurance is one of the biggest fixed costs in your life. You need insurance for your car, your home/apartment, yourself and maybe even your pet if they're like mine and they're prone to $2,000 surgeries. When was the last time you actually looked at what you're paying?
Are you on your wealth building journey, but need a cash boost? My friends at Albert are giving you a $150 bump in your cash account when you open a new account using my link! Thanks to Albert for their support.
I did this little audit a few times in the last couple of years. First, it was when my wife and I bought our first home about three years ago. We had renter's insurance through State Farm, which was great! However, when I shopped around, State Farm was about double the next highest premium amount. When I did the same for car insurance, I found the same thing. After doing some heavy research and some math, we landed on another big insurance company that was so competitive, the insurance arm of the bank I worked at at the time couldn't even compete with it.
I did the same this year when I changed jobs. I took a look at my health insurance options, HSA options and premiums across the board. Doing all of this not only saved me money on my bi-monthly insurance premiums, but it let me contribute more to my HSA, overall creating a compounding interest effect that I'll feel in full when I retire.
The Bottom Line
The best part about living in today's financial world is that there are TONS of ways to make money, save money and invest money. Sure, money is flying out of your pocket faster than you know what to do with, but the reasons I listed above are just a few ways to get started on your path to financial independence, or at least a few extra dollars in your pocket. Once you have a nice cushion saved up, don't forget to invest some of that cash so you can take advantage of that compounding interest!
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Saving money can be a challenge, especially with rising inflation and the cost of living increasing. To get started, creating a budget is one of the most effective ways to manage your finances. Tracking expenses may seem tedious, but it can reveal where small adjustments can add up to big savings. If you're also thinking about improving your health while saving money, you might explore natural remedies like Essiac tea, which is both affordable and beneficial. For more information on health benefits, you can check out extract where you’ll find insights into how Essiac tea can support overall wellness. Balancing finances and health doesn’t have to be complicated, and small steps in both areas can lead to long-term benefits.
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I did this little audit a few times in the last couple of years. First, it was when my wife and I bought our first home about three years ago. We had renter's insurance through State Farm, which was great! However, when I shopped around, State Farm was about double the next highest premium amount. When I did the same for car insurance, I found the same thing. After doing some heavy research and some math, we landed on another big insurance company that was so competitive, the insurance arm of the bank I worked at at the time couldn't even compete with it.