10 Smart, Practical Habits That Help Save a Lot of Money Over Time

Saving a lot of money over time doesn’t need to feel painful. There are small things you can do every day to help you get ahead financially .

While doing one of them can save you a little, implementing several of these money-saving habits into your daily lifestyle can make a significant impact each month and in the long run.

1. Review subscriptions

Canceling unused subscription services is one of the easiest and least painful ways to save money. Even low-cost subscriptions can add up over time, especially if you’re paying for several.

For example, even one monthly $7.99 subscription is more than $95 per year (nearly $480 over five years). If you pay for only four subscription services at this price, you’ll pay more than $380 per year — or nearly $2,000 over five years.

2. Make a shopping list

Making a shopping list before you go to the store and sticking to it can prevent impulse purchases. Stores strategically place items to make shoppers want to buy things they wouldn’t otherwise.

For example, it’s sometimes tempting to grab an overpriced drink or snack at the checkout line, and sales might prompt consumers to purchase goods they don’t need.

Avoiding browsing and sticking to your grocery list can save you tens, if not hundreds, of dollars every month.

3. Open a high-yield savings account

Opening a savings account can keep money out of reach so you don’t overspend. A high-yield savings account is one step better. Not only will you save money, but that saved money will make more money.

Unlike investing in the stock market, there’s no risk of losing money when depositing into a high-yield savings account. That makes it a safe bet and better for short-term savings (less than five years).

Some high-yield savings accounts offer rates above 5%. However, rates can change over time, and some companies have balance requirements. Do your research before choosing a bank.

4. Compare prices before you buy

Comparing prices before you buy can save you a lot of money, especially on large purchases, such as furniture, appliances, and cars.

However, comparing prices on less-expensive items can save you hundreds as well. For example, Target might carry clothing items that look strikingly similar to designer pieces but for only a fraction of the price.

5. Pay your bills on time

Paying your credit card bills on time can save you from hefty interest and late fees, but paying other bills by their due dates is also important.

Utility companies might charge late fees, and if utilities are shut off for non-payment, some companies charge reconnection fees.

Enrolling in autopay is a good way to make sure bills are paid on time. If you don’t want to use autopay, consider setting calendar reminders for due dates. That way, you won’t accidentally miss a payment date.

6. Compare car insurance rates periodically

It’s not uncommon for car insurance companies to raise rates once you’re already a customer. To get the best deal, shop around for quotes from time to time.

Another company might have more competitive rates or offer discounts your current company doesn’t.

It’s especially important to shop around if there have been positive changes to your driving record or credit score. So, if you’ve completed a defensive driving course or have put more time between now and your last traffic traffic, you might pay hundreds less per year.

7. Reduce utility usage

Reducing electricity usage is one way to lower your utility bill each month. In the winter, turn the thermostat down before bed and when you leave the house.

Other ways you can save include using energy-efficient appliances, turning down the hot water heater and taking shorter showers.

Taking the above steps might save you a lot or only a little each month, but even small savings add up over time. Cutting your electric bill by just $15 per month could put an extra $180 in your savings account by the end of the year.

8. Purchase quality second-hand items

You’ll likely pay less when shopping secondhand. However, paying less is only cost-effective if you’re purchasing quality items. If you’re hitting the thrift stores for clothing, check for broken zippers, missing buttons, and worn-out areas in the material.

Paying two dollars for a t-shirt that reveals a hole two washes later isn’t worth it. Even two dollars add up over time, especially when you purchase the items often.

Remember to inspect other second-hand items as well. Check for toy recalls, ensure appliances and electronics work as they should, and look for damage to furniture.

9. Cut entertainment costs

To save the most money, consider swapping expensive entertainment for low-cost and free events. For example, instead of taking the kids to a water park every weekend, hook up a sprinkler at home.

Pack a lunch for a visit at the state park instead of going out to eat, and check out free local community events instead of purchasing tickets for an out-of-town show.

That doesn’t mean you can never splurge on fancy restaurants or see your favorite musician. However, incorporating more low-cost entertainment into your lifestyle can help you save money without feeling like you’re making a sacrifice.

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10. Avoid high-interest credit cards

Paying interest on credit card bills is like throwing away money. This is especially true for high-interest credit cards, which often target people with no or poor credit.

The cards can come with interest rates above 24% and often come with annual fees, too.

If you want to build credit, consider a secured credit card or a credit card with a 0% introductory APR instead. If you opt for a high-interest card, keep balances low and make on-time payments.

Bottom line

Depriving yourself too much can make saving feel like a chore, but making small changes can help boost your bank account without making you feel like you’re cutting back much at all.

Creating a budget is the first step to reaching your goals, no matter which habits you implement. Sticking to a budget is often difficult, but making small changes can help you stay on track.

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