3 Spending Strategies That Yield Long-Term Savings

If you’ve made promise after promise to yourself to start saving with no follow-through, then this article is for you. Saving money can be challenging for multiple reasons. Your budget may feel strained after a layoff or a shift in your job status. You may feel financially strapped because the cost of living continues to rise with no end in sight. Regardless of the reason, there are ways to rethink how you’re spending that can yield long-term savings. Read on for three tips.

1. Extend the Lifespan of Big-Ticket Items

Big-ticket items, such as appliances, electronics, and cars, require a certain level of maintenance. Just because they were expensive doesn’t mean they will take care of themselves! They need the same TLC that you would give to any of your valuables. Extending the lifespan of big-ticket items starts with proper care and maintenance.

Be sure to read all manuals and warranties before purchase. Knowing what you’re getting into in terms of care before you buy can help save you time and money down the road. For example, if a washing machine requires regular cleaning, set a reminder for yourself. Add it to your phone once a month or every quarter, as instructed by the manual. This way, you’ll stay on top of it and will get the most use out of it for years to come.

Some purchases may even help you with maintenance reminders. Buying a car from a dealership that prioritizes the maintenance of your vehicle can be a smart investment. AI in automotive is enhancing how dealerships send reminders to their valued customers. When it’s time for an oil change or the yearly service inspection, the dealership can send an automatic reminder to you. This nudge will help you stay on top of your car’s needs and can greatly extend the life of the vehicle.

2. Cut Unnecessary Expenses

Before you skip past this second tip, take a moment and think about what you’re currently spending most of your income on. Doing a budget audit can help you determine where you may be able to trim expenses and what you can cut altogether. Sit down and give yourself ample time to go through the last three to six months of expenses. Group items based on what they were used for, such as “mortgage or rent,” “food,” “entertainment,” “travel,” and “health.”

From there, look at each expense and see if it’s something you really need or if it’s something you can live without. You’ll likely notice certain habits and trends. Those $5 coffees that you buy when you’re bored in the afternoon as an excuse to leave the house can really add up! Perhaps you could buy the fancy beans from the local coffee house and prioritize making your coffee at home instead. An inexpensive hand frother can make a regular cup of joe feel more elevated.

You may also notice some items that you can cut altogether from your current spending. Do you and your husband need subscriptions to the same streaming service if you’re both watching from the same television at home? Did you completely forget to cancel that subscription to the online newspaper app after your graduate-level class ended? A few dollars here and there really add up! There are free apps available to help you find, monitor, and cancel unwanted online subscriptions with just a few clicks.

3. Automate Savings

The more you automate what goes into your savings account, the less likely you’ll be tempted to spend it. You can set up automatic transfers from your checking to your savings account on a regular basis. When your paycheck comes in, perhaps you automatically transfer half of it to a travel or home savings account. Seeing the money in that account increase every month will make planning for that future trip or down payment on a house even more exciting.

For everyday purchases, there are ways to transfer spare change from a purchase to a savings account. Apps such as Acorns, Digit, and Qapital round up the cost of purchases and put the change into a dedicated savings account. Note that many of these apps require a subscription fee, but it may be worth it if it helps get you in the saving mindset.

If your employer has a retirement savings plan, then this is another way to automate your savings. With these plans, a portion of your income is taken out pre-tax and deposited into a traditional 401(k) or Roth 401(k) plan. Most employers offer a percentage match to employees’ contributions, so if you’re contributing 5% of every paycheck, then your employer may match up to 3%. Talk with your human resources department or manager to learn what type of plan you may be eligible for based on your employee status. Having money later in life when you’re ready to retire will be a welcome relief.

Tips and Takeaways

Long-term savings don’t happen overnight. They require diligent, daily effort on your part. While it may take some time to get into the rhythm of saving, soon enough you’ll be doing it automatically. Remember, each dollar adds up, so even if you’re starting slowly, know that the reward will be worth the sacrifice today.