When it comes to saving money, you'll hear a lot of different advice: Automate your savings. Create a budget. Take a savings challenge.
To be sure, many savings strategies are more or less effective, but which one is best for you depends on the individual, their preferences, and, to some extent, their goals.
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But what are some of the often-overlooked ways to save money? GOBankingRates spoke to three financial experts to find out. Here's what they had to say:
The most overlooked way to save money: buying in bulk
“When you're trying to save money, every little thing helps,” says Scott Lieberman, founder of Touchdown Money. “Of course, cutting back on your expenses is a great way to save money.”
But Lieberman says one of the least-noticed and perhaps most effective ways to save money is buying in bulk.
“This is an example of using money to save money,” he said. “If you have the space and ability to store the item properly, buying in bulk allows you to buy items when they're on sale and save money. If you stock up, you won't have to buy that item again for a while.”
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Runner-up: Take the Savings Challenge
As a second-best strategy, Lieberman suggested a savings challenge.
“Save a little at a time and watch your money grow. Start small, like $1 a week, and increase your savings each week, and you can save a significant amount in a short amount of time,” he says. “There are popular challenges like the 52-week challenge and the cash-in-an-envelope challenge that encourage people to save more each day or week. They sound silly, but for people who need more organization and discipline, they can really work.”
You may need to try a few different savings methods to find the one that works best for you. If you find it difficult to stick with one, switch to a new one, or ask a friend to join you in the challenge.
The most overlooked way to save: Automating direct debit
“In my opinion as a financial expert, one of the best, and most overlooked, ways to save is to automate your savings through direct deposit,” says Doug Lawler, financial expert and founder of Crossroads Financial Group. “With this method, you set up a portion of your paycheck to automatically be deposited directly into your savings account before you spend it. By automating your savings in this way, you're essentially paying yourself first, eliminating the temptation to spend that money on other things.”
According to Roller, this strategy has many benefits:
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You can save an amount on a consistent and regular basis.
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You won't have to remember to set aside cash every month.
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Make savings part of your daily routine.
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Limit impulse and unnecessary spending.
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Over time, your savings will grow and help you reach your long-term financial goals.
Runner-up: Monitoring recurring expenses
Lawler also suggested keeping track of all regular expenses, excluding automatic contributions.
“People often overlook recurring expenses like subscriptions, membership fees, utility bills, insurance premiums and other recurring payments,” he says. “These expenses add up over time and can have a significant impact on your overall financial situation if not managed effectively.”
Of course, once you know how your money is spent each month, you can find ways to cut back on your expenses, which can help you save more and work towards specific savings goals.
The most overlooked way to save money: Change your budget
Having a budget to help you save is nothing new, but if you create a budget and don't adjust it based on your life situation and goals, you could be missing out on important savings strategies.
“Savings goals are often directly tied to a person's stage of life and evolve over time as goals are achieved and income and living circumstances change,” says Tom Holtum, vice president and senior regional delivery manager at UMB Bank. “For example, in your 20s and 30s, a savings account can be used to help you address emergency expenses or to meet goals like wedding expenses or a down payment on your first home.”
“As you get older, saving helps you plan for the future,” he continued. “Having a plan to save money for short-term and long-term goals, not just for a rainy day, is the foundation of financial independence.”
Runner-up: Gamifying Savings
If you're just starting to save money, Holttum suggests gamifying your savings, which is similar to setting a personal challenge, but makes the challenge more fun and more rewarding.
“Making saving more fun can be a great start to reaching your goal. The idea is called financial gamification, and it's about creating a system of challenges and competitions for yourself to motivate you and reach your financial goals,” he said. “You can turn the mundane tasks of personal finance that might not be that much fun into fun experiences that also offer rewards.”
In particular, he suggested:
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Gather some friends who want to save money as well and compete. “Set a timeline, establish some rules, and whoever has saved the most at the end of the month is the winner,” he said.
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Try not to spend money for a period of time (say, a week). “Challenge yourself to not spend any money at all for a week,” he said. “This is a good challenge to recognize how often you make impulse purchases. Every time you thought about or would normally spend money that week, record how much you spent and at the end of the week, transfer that money into a savings account.”
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Every time you spend money, we round up your purchase to the nearest dollar. At the end of the month, see how much money you have left and use it for other things. “When you spend such a small amount per purchase, it may seem like you have extra money to spend on other things,” he says. “But at the end of the month, you might be surprised at how much money you have saved!”
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This article originally appeared on GOBankingRates.com: I'm a Financial Expert: Try These Often-Overlooked Ways to Save Money
