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Building wealth starts with saving more money so that you can put it to work for you. For some people, saving comes a little more naturally than others. By getting in the right mindset, you can save more money.

Fortunately, there are ways to reduce your current expenses and pocket the savings. Start by thinking about all of your expenses and see if there is anything you don’t need. If it’s not necessary for maintaining your basic level of living, think about cutting it out completely.

If you can’t live without certain expenses, look for alternatives that are less expensive. Cut back on frequency, volume, or type of your expenses to save money. Instead of paying for the top-of-the-line product, consider buying a less expensive version if you don’t really need the most expensive model.

Once you start monitoring your expenses by creating a budget, you can see where there are opportunities to cut back. Here are some of the best ways to cut costs and save more money.

1. Split Your Rent

Housing costs are usually the largest expense that you’ll have. If you’re able to reduce your rental or mortgage payments, you can see a dramatic increase in the amount that you can save each month.

One way to reduce your housing costs is to split it among more people. If your situation allows, find another roommate who can help pay rent with you. If you have an extra room, see if a friend or acquaintance would like to live with you.

Another options is to consider buying a multi-family unit when you are planning to buy a house. This will allow you to charge rent to cover your mortgage while living in a space separate from your tenants.

2. Know When to Trade Out Your Car

Cars are known to be money pits because they are depreciating assets. This means that they continually lose value from the second they are driven off the new car lot. Whenever possible, avoid purchasing a new car and try to get by with your existing car for as long as possible.

This means that you may need to pay for periodic repairs to keep it running. This is fine as long as the expenses don’t add up quickly and they prolong the life of your vehicle. Paying a few hundred dollars a year for normal maintenance is a good option to avoid a monthly car loan.

If your repair costs start to increase past the cost of a monthly car loan, it is time to trade up. That said, buy a used car that is more reliable while keeping your costs down.

3. Reduce the Number of Vehicles You Own

If you are a couple, you may have two different cars that you are paying insurance, maintenance, and taxes on. See if there is a way to get by with only one car to reduce costs.

Now that many people are working from home, you may really only need one car to get around. If you live in a city with plenty of public transportation, see if it would be cheaper to use the subway or a bike instead. Parking in cities can often be quite expensive, so eliminating that expense could be a quick way to save more.

Keep in mind that you can also rent a car for certain times when you want to take a trip. You may be able to sell all of your vehicles if you live in a city and just use short-term car rentals for longer trips.

4. Pay for Everything with a Credit Card

If you’re not paying your expenses with a credit card that gives you cash back, you’re missing out on free money. Sign up for a credit card that gives you cash back or points for every purchase, but only use one that does not have an annual fee.

I pay for literally everything that I can with my credit card. I earn between 1% and 3% cash back on all of my purchases, depending on the category. This means that can automatically reduce my costs just by swiping a card instead of using cash.

Using a credit card also lets me better track my expenses. I monitor all of my monthly expenses and track my budget through Personal Capital, which is linked to my credit card. This knowledge makes it much easier to see which areas I can cut back on to save money.

5. Avoid Unnecessary Fees

There are hidden traps all around waiting to charge us extra fees. Know what to look out for and do whatever you can to avoid those fees. Avoidable fees only serve one purpose… to reduce your ability to save money and make other people wealthier.

Avoidable fees can include speeding tickets, parking fines, and other legal violations. Overdrawing your bank account by accident can often incur an extra fee. Submitting taxes, your emissions, or insurance payments late can all charge you late fees.

To save money by avoiding fees, you’ll need to stay organized and understand when you may be at risk of being charged extra fees. Use a calendar to write down when payments are due and stay on top of them.

6. Move to an Area with a Lower Cost of Living

Cities and large metropolitan areas have a much higher cost of living than more rural areas. Rent, food, entertainment, and utilities all tend to be higher in these areas. If your job allows, try moving out of a high-cost city to an area that is a little more cost effective.

Jobs are often the primary reason why people live where they do. If you are able to do your job remotely, ask your boss if you can switch to a full time remote position. If you need to be onsite, you may want to think about changing companies to someplace that is less expensive.

Moving is never an easy decision and it often has serious implications for your whole family. However, depending on your current costs, there may be considerable financial benefit to moving to a lower cost area.

7. Downsize

Take a hard look at your current living situation to see if there is an opportunity to downsize your housing. Living in a big 4 bedroom house as a couple probably doesn’t make sense if you can avoid the extra associated costs.

If you are bold, you could cut your rent and mortgage completely by moving into a tiny home. There are a variety of tiny homes available, ranging from mobile homes to cozy cabins set on a small parcel of land. Instead of buying a full house, you could purchase a piece of land and a camper for much less.

Besides just your home, think about downsizing other things like your car, entertainment budget, and shopping sprees. Instead of driving a large truck, you could save money on gas by getting a smaller car that gets better mileage. Try to cut back on the frequency that you eat out or go to the movies. Perhaps you only treat yourself to one new shirt instead of two or three when you’re out shopping.

Once you get into the mindset, it gets easier to downsize every aspect of your life. Think about what you truly need to live and try to cut out anything that doesn’t bring you significant value or happiness.

8. Learn to Do Your Own Repairs

Instead of hiring other people to do repairs, learn to do as much as you can yourself. Being a little handy can help you avoid having to hire mechanics and handymen for every issue you encounter.

Changing your oil, replacing windshield wipers, and fixing a leaky faucet are all things that are easy to learn how to do yourself. Instead of hiring a professional that could charge $50 or more per hour, you can do the work yourself and just pay for materials.

Next time there is an issue around your house or with your car, do a little research to see if it might be something you can fix yourself. YouTube can be a great resource to visually walk you through the steps and there are a ton of free resources available online.

9. Pool Your Services with Friends and Neighbors

Instead of paying for a service, next time see if you can trade for it. This works the best for local services like baby sitting, mowing your lawn, snow plowing, or dog walking.

For example, don’t hire a baby sitter next time you have a date night and instead see if a friend will watch your kids. You can then reciprocate the offer by watching their kids next time they go out. By doing so, you both can save on the expense of hiring a sitter and it’s not a lot of extra effort for you.

Another option could be having the neighborhood work together to shovel out from snow instead of hiring a contractor to do it. Or taking turns walking the neighborhood dogs so that it fits everyone’s schedule.

Even if you weren’t going to hire someone, you may be able to find efficiencies by working together. If you drop your kids off at school every morning, you may be able to carpool with a neighbor on alternate days. Or, coordinate dropping of your dry cleaning at the same time so you don’t both have to go.

10. Plan Better Shopping Trips

Shopping for food is no easy task when you are doing it for your family. Everyone has their own requests plus you’re trying to hit the required items for your pantry while being (somewhat) healthy. Food costs can quickly get out of hand if you’re not prepared.

Before you go shopping, make a list of everything you think you need. Review it and cut out anything that you don’t absolutely need at that time. When you get into the store, stick to that list and don’t make impulse buys.

Which also means to try to avoid shopping while you are hungry. Shopping while hungry is a sure way to increase your costs by grabbing food you don’t really need.

Do your research on what everything should cost and only buy if it is on sale. For many items, it will be on sale within a few weeks and you can wait to buy them then. Try to avoid emergency buys where you are forced to buy more expensive groceries just because you don’t have any at home. If you can find coupons easily, that’s also a good way to save a few dollars

Finally, try to plan your shopping in one large trip instead of going repeatedly. This wastes time, effort, and gas if you go too frequently. Plus, it opens you up to over-buying just because you are in front of something that looks delicious. By planning ahead, you can help avoid extra costs with your normal groceries.

11. Enjoy Cheaper Vacations

Everyone needs at least one vacation per year to rest and recharge. If you can take a few weeks off, it’ll be better for your health and well being. Some vacations can get expensive quickly but there are ways to have a good time for less money.

Try staying closer to home so that you don’t have to book an expensive flight to get there. See if there is an attraction within driving distance to your home, like a park, beach, or lake. Look for affordable condos or cabins on VRBO so that you can fit the whole family and have access to a kitchen for cooking.

One of my favorites is renting a lake house for the week with a couple of other friends. This lets us share the cost and we can cook the majority of our meals in to save money. By being near a lake, we still have plenty of activities and fresh air to relax, but it is less expensive than other options.

If you want to go somewhere warm during the winter, there often are good deals on shorter cruises and weekend getaways. Check out booking sites like Hotwire and Cheap Caribbean to find deals on resorts that have good reviews. Think about booking your trip from Monday to Wednesday since it could be cheaper than going on a weekend.

Planning to Reduce Your Expenses

Saving money isn’t too hard once you have a plan to reduce your expenses. Start by tracking everything that you buy. A spreadsheet, your credit card statement, or an automated system like Personal Capital are all good ways to get started.

Then, take a hard look at every one of your expenses. Can you eliminate it completely? Do you really need it? What would change in your life if you no longer had it?

If you can’t eliminate it, see if there is a way to cut back on the costs. Try to reduce the frequency of buying it or choose a less expensive option if you don’t need all the features.

Saving money can be much easier if you use data to inform your decisions and create a plan that you can stick to.

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