In personal finance, small moves can add up to big savings.
That’s the takeaway from a new study by Personalfinanceguru.com, a money management advisory platform.
"Small changes really can make a big impact on your financial future," said James Mannion, a financial expert at Personalfinanceguru.com. "Our research shows that by making a few simple adjustments to daily habits, Americans can free up more money for savings, investments, and long-term financial goals."
Yet Americans aren’t big on making incremental moves to save cash.
“People overlook their small spending for mainly two reasons,” said Derek Sall, founder of Life and My Finances, a personal finance advice website. “First, they just don’t think it has that much impact. Secondly, they like their little spending habits and don’t want to stop small pleasures like buying coffee every day.”
Yet if you save just $5 a day and $150 a month and invest it regularly, it equates to over $500,000 over 40 years, according to the Life and My Finances Small Change Calculator.
“Most people are blowing that kind of money without even realizing it,” Sall said.
Save Money With These Everyday Moves
How can you take small steps to save big cash? Personal finance experts advise taking these action steps.
Save $5–$10 a day by packing pack your own lunch. It takes five minutes, it’s likely healthier, you don’t overeat, and it saves you loads of money in the long run,” Sall said.
Stop buying from Amazon every day. You might think you need those sunglasses or that wine decanter delivered to your doorstep but you really don’t.
“Go ahead and open up your credit card statement, and add up everything that says “Amazon”, Sall said. "I bet it’s over $300 a month.”
Switch to store brands. “When grocery shopping, store-brand products often have the same ingredients as brand-name alternatives but can be 20% less, “ said Kyle Enright, president of Achieve Lending in San Mateo, California. “Doing so regularly can save you $600 per year.
Sell your stuff. Spring cleaning is still a time-honored task in many homes. “It’s a good time to also clean out drawers, closets, pantries, garages, attics, and basements,” Enright said. “Learn to sell unneeded-but-still-usable items online and save $1,000 or annually.”
Audit your spending to identify purchases that aren’t serving you. “Take a hard look at monthly subscriptions that are automatically withdrawn from your account but that you rarely use,” said Mary Hines Droesch, head of consumer and small business deposit products at Bank of America. “For each subscription cut, set up automatic transfers for the amount from your checking to your savings.”
Go the cash rewards route. You can also make your money go further with a cash rewards credit card.
“Doing so can help you offset the costs associated with your routine purchases,” Droesch noted. “It's an effortless way to make sure you’re being rewarded for essential everyday purchases on things like groceries and gas – which can be put towards savings.”
Plan and prepare meals in advance for the week ahead. Pre-planning your household meals “can substantially reduce the expense of purchasing pricey work lunches,” said Trinity Owen, founder of The Pay at Home Parent.
“Save more money by tapping into cost-free resources, like public libraries, to minimize spending on books and entertainment," Owen added.
Watch the Savings Stack Up
The potential annual savings derived from small pocketbook savings tactics are contingent upon an individual's unique spending patterns.
That said, the savings app Digit reveals that the average user could accumulate up to $2,500 per annum through bit-by-bit savings tactics.
“While these savings might initially appear insignificant, they can anyone meet their long-term financial aspirations,” Owens noted.
