How to save money

Photo by J Rosenfeld

When people hear that I spent a whole year simply traveling, they usually wonder how I financed my trip – I’ve even had people ask if I won the lottery! If only. Unfortunately, it comes down to making little sacrifices here and there for a much bigger payoff at the end.

You can do it too. Here are some ideas to get you on your way:

1. Chart your expenses. Most people think they’re already doing everything they can to save, but that’s rarely true. Write down every single cent you spend for a week, or better yet, a month. You might be shocked where your money actually goes.

2. Change your driving habits. Gas seems to be getting more expensive by the minute. If you drive to work but public transport is an option, it’s worth reassessing the cost-effectiveness of driving. This site will do the math and tell you exactly how much your commute is actually costing. Try and cut back how often you have to drive by taking turns car-pooling, or bundling all your errands together. You can also save gas by driving more slowly. Every car is a little bit different when it comes to its fuel-efficient speed, but in general, every 5 mph you drive over 60 mph is the equivalent of paying an extra $0.24 per gallon for gas.

3. Save on food and drink. Cut back on eating & drinking out and take your lunch to work everyday. This is one area where we can probably all save more, but don’t, because frankly, eating out is more convenient and more enjoyable. It really just comes down to figuring out how important travel is to you and what you’re willing to give up to make it happen. This next part shouldn’t be so hard though: drink tap water rather than bottled. If you drink bottled water for the convenience, get a reusable bottle and fill it up. If it’s the quality that bothers you, buy a water filter.

4. Use the library (and not just for books). This seems pretty obvious, but Amazon clearly does a roaring trade all the same. In addition to books, you can often find the latest magazines and DVDs at the library. Borrow travel guides to do research for you next trip and pick up the most current edition before you depart. You can save money on music too, since many libraries have huge collections of CDs, including all the popular stuff.

5. Cancel your gym membership. Let’s be honest, how often do you actually use it? All you’re doing is burning cash, not calories. Go for a run outside or find a public pool to use instead.

6. Cancel cable. Instead, use sites like Hulu to watch free TV online (you can even stream it straight to your television using a cable or set-top box if you prefer). At the very least, cancel the premium movie channels and subscribe to Netflix – it’ll probably still be cheaper.

7. Change your phone plan. Maybe you’re not using all your minutes or maybe you’re going over your text limit and paying extra fees. Whatever the case may be, look at your actual usage and see if there’s a better deal to be had.

8. Downsize. For most people, mortgage or rent is their single biggest expense. Consider moving into a cheaper apartment or take on a housemate if you have the room.

9. Shop around. With all the technology that’s available, there’s no excuse for paying more than you have to. Online, Google Shopping lets you quickly compare prices. If you’re in a brick and mortar store, apps like Red Laser for iPhone will let you scan a barcode and instantly see if there’s a cheaper deal available somewhere else.

10. Quit smoking. It’s an expensive habit, and I’m not just talking about the price of buying cigarettes. For a start, smokers pay higher insurance premiums than non-smokers. And that smoke smell that gets into everything? It increases your dry-cleaning costs and worst of all, lowers the value of your home and car. If this is something that applies to you, use travel as an incentive to quit the habit.

11. Ask for a better deal. Lifehacker has written a great article about how you can get a better deal on just about anything simply by asking.

12. Automate your savings. Redirect a portion of your paycheck into a separate savings account and force yourself to make do with what’s left.

These tips can apply to saving for just about anything, but I find travel is a great motivator. If it helps, cut out a picture of your travel destination and stick it to your wallet, so every time you take it out, you’re reminded of what you’re scrimping for. I promise, it’ll be worth it.