How to Save Money: Daily, Monthly, and for the Long Term (2024)

Saving money can seem like more trouble than it's worth, given the relatively small sums yielded by trimming expenses by a few dollars a week here and there. But take those savings and invest them, even conservatively, and that belt-tightening promises to deliver thousands of dollars over the long term.

The potential payoffs increase more dramatically still if you also shrink some ongoing expenses that are often mistakenly treated as if they were fixed; insurance premiums, for example, or cable bills. In the short term, cost-cutting moves can also immediately help offset the rising costs of living due to inflation.

This article offers 15 suggestions to cut your expenses—daily, monthly, and annual moves that fairly painlessly deliver savings—as well as a way to supercharge your savings with your employer's money. For most of these moves, we calculate the proceeds from socking the savings away for 25 years and assume your money will earn a fairly conservative return of 5% compounded daily. If those long-term figures don't boost your commitment to save, nothing will.

Daily Savings

1. Brown Bag It

A sandwich at a deli near work can cost $5 to $10 a day. That might not seem like much. But over a year, spending that every work day puts your annual expenditure into four figures. If you instead bring food from home, you can feed yourself for half as much. If you invest those savings—an average of $35 a week, or about $1,820 a year, you’d have saved $94,749 after 25 years.

2. Brew Your Own

A cup of decent coffee at a premium shop can easily run from $2.50 to $4 or more, and that usually won't buy you a latte or other specialty drinks. Buy just a single cup every day and you’ll be spending between $625 to $1,000 a year—in after-tax money.

Then consider that a pound of good coffee at the same store costs about $15 and brews at least 30 cups of coffee. If you brew one cup a day at home, instead of buying one at the store, you'd spend about $125 a year. Total savings: $500 to $875 a year, and more than $45,000 with our lifetime calculation.

3. Join Supermarket Loyalty Programs

Signing up as a loyal customer at a major food chain can allow you access to member-only specials and sometimes to manufacturers' coupons, too.

Whole Foods offers an especially rich program for those who are members of Amazon Prime, its parent company's premium membership (which costs $139 a year but delivers other perks, too).

Prime members qualify for deep discounts on dozens of sale items at Whole Foods stores every week. (Recent examples for New York City: Boneless skinless chicken breast, $7.99 a pound, down from $9.99. Organic blueberries, $3.99, down from $4.99.) A shopper who heavily buys Prime specials could probably save $25 a week on groceries. That adds up to $1,300 a year, compounding to more than $67,000 over that 25 years.

Costco, which sells goods at wholesale prices, offers memberships at a variety of price points that come with a satisfaction guarantee. The Executive level, which costs $120 per year, offers you 2% annual rewards back on select purchases up to $1,000.

4. Score Senior Discounts, Perhaps Sooner Than You Think

Many merchants offer big discounts to those 65 or older, but some give you the discount if you’re as much as a decade younger. For example, at age 55 you qualify for 10% discounts at Arby's (10%), TJ Maxx, and Michael's craft-supply stores. Discounts that kick in at 60 include Ben and Jerry’s (10%), Sonic Drive-In (10%), and Piggly Wiggly grocery chain (discounts vary by location).

5. Get Student Perks

Full-time students qualify for a host of freebies and discounts. Food-chain offerings include Chipotle (free drinks) and Domino's (20%).

Retail discounts include Amazon Prime ($5.99 a month for 4 years), H&M (20%), and American Eagle (20%). Technology and telecom discounts include Apple (Education Pricing on much of its hardware, at varying discounts), Adobe Creative Cloud($19.99 a month), and Spotify (a $4.99/month student bundle that includes Spotify and Hulu with ads).

Monthly Savings

6. Charge It to a Cash-Back Card

Maximize your credit card benefits by putting as many regular expenses as you can on a credit card that offers generous cash-back rewards: Groceries, gas, utilities, restaurants, everything you can think of. Make sure, though, that you pay off your credit card bill in full at the end of the month. Paying interest on a balance will wipe out any rewards you’d have earned, and probably more.

A family could easily charge $2,000 a month on a rewards card. The Capital One Quicksilver Rewards Card, for example, pays 1.5% back on every purchase. That works out to $30 a month, or about $19,000 over 25 years. The Citi DoubleCash card pays 2% back.

7. Shop for Home Telecom Service

Most areas have more than one company that provides cable TV, Internet, and landline services. Sometimes there’s a big price difference between them. Don’t be shy about switching, or calling your current provider and threatening to leave—a move that may yield some offers you won't find on the website.

You could also drop your landline, for modest savings, or your TV service. Cutting cable or satellite TV is more ripe for significant savings, especially with the arrival of web-based cable substitute services such as YouTube TV and Hulu with Live TV.

However, these services tend to be money savers only for those who want to downsize their channel array. You can ditch paying for TV entirely by spending $40 or so on a new antenna that allows you to receive pristine over-the-air digital broadcasts of the major networks, and often other programming, too.

Don’t be surprised if you save more than $40 a month by switching—or at least reducing—your home telecom service. The potential 25-year benefit: $25,000.

8. Consider Switching Mobile Services

If you're no longer under a contract with your carrier—and you're not paying off your phone—you might be able to switch to a less expensive network without having to buy a new phone. For example, AT&T, T-Mobile, and Verizon phones can generally be used interchangeably.

Verify compatibility for your specific phone with the carrier or by using checkers such as this one from Whistleout.com. You should also consider coverage in your area and compare extra features such as free video services and data rollover.

If those check out, though, the savings can be substantial. For example, a plan that costs $10 less a month than your current one would deliver a savings benefit over 25 years of more than $6,200.

9. Shop for Electricity

In many states, you're allowed to buy electricity from energy service companies (ESCOs) separate from the company that brings the power into your house.

These alternatives often have lower rates than the utility company. For example, companies that charge as much as a penny less per kilowatt hour than the utility company could save you between $5 and $10 a month depending on how much electricity you use. While it might not sound like much, that could add up to roughly $3,000 to $6,000 over 25 years.

Start by finding out whether your state is deregulated and researching the companies you could use. Be cautious before signing up for an alternative provider, however. Companies may charge early termination fees, require contracts, offer attractive introductory rates that then rise, and impose other provisions different from the public utility you may use now.

Whether you will find savings depends on how carefully you choose your plan. A 2016 study in New York State found that "general residential and small commercial utility customers who took service from an ESCO paid approximately $817 million more than if they had continued to take commodity supply from their local utility."

In 2022, the state's Public Service Commission took action against four ESCOs for various violations of consumer protection regulations.

10. Pay Less in Bank Fees

Look beyond the balance on your bank account statements and you may be rudely surprised at the number of fees you're paying and what they cost you. A few smart practices can help limit these, including withdrawing cash only at fee-free ATMs, carefully coordinating your available funds with any checks you write to avoid costly overdraft fees, and using credit cards and free P2P payment apps like Venmo to reduce your need for cash withdrawals.

If high fees remain a persistent issue, consider making a switch. If your current bank can't offer options to reduce your fee burden, turn to an online-only bank. With lower overhead than brick-and-mortar banks, these institutions often have no monthly maintenance fees or minimum balance requirements and pay a higher interest rate on savings accounts and certificates of deposit.

Some community banks and credit unions offer the same lower-fee, higher-rate advantages of the online-only banks while also allowing the option to meet with a banker face to face.

Average bank-fee figures are difficult to come by. The most recent data we could find—a 2022 report from MoneyRates based on 2021 data—listed average fees for monthly maintenance, overdrafts, and ATMs that add up to $49.32/month, or $167.40 per year.

However, there are many no-fee checking accounts and those that offer reduced fees, depending on customer usage. Over 25 years, an account that costs half of the average account would earn you about $4,000 in savings.

Annual Savings

11. Reduce Your Insurance Premiums

Review your homeowner’s and auto insurance policies at least every year for changes that could save you money. Even if you don't opt for an entirely new carrier, a host of moves can help you reduce premiums. For example, consolidating all the policies you hold with one company typically earns a discount of between 5% and 25% on each.

If you're insuring an older car, its optional collision and comprehensive coverage may no longer make financial sense if the maximum claim payout (the vehicle's value minus your deductible) drops to 10% or less of the total annual premium for those two coverages. And for almost any insurance policy, increasing your deductible almost invariably reduces the premium—and, of course, your financial risk.

Whether or not you change coverage, shop around for your insurance, since premiums can range widely, particularly with auto insurance. The national average monthly auto insurance premium is $207 a month, according to the Federal Reserve Bank of St. Louis.

Reducing the premium by 10% would save about $226 a year, adding up to about $12,000 over 25 years.

12. Use Apps to Help Track and Save Money

A rise in both the number and the quality of personal finance apps has made it far easier to know from your smartphone or computer where your money is going, and to help you save more painlessly.

Take one of Investopedia's top personal finance apps, which is free. All-in-one resource Mint will help you create a budget, track your spending, connect all your bank and credit card accounts, and remind you of all your monthly bills.

13. Enroll in Your Employer’s Retirement Savings Program

The closest thing to free savings is thematching contributions many employers offer for company-sponsored 401(k),SIMPLE IRA,and other salary deferral feature plans. Employers who offer the perk typically add up to half of your contribution to the plan.

If you're hesitating to join the company plan, then, you're losing out on not only the benefit of tax-deferred retirement savings of your own but on having those contributions supercharged by your employer.

An example illustrates just how much you can leave on the table by not participating. It's an especially conservative example since it reflects a modest income that doesn't rise over time, as many employee salaries do.

Alana makes $31,000 per year working for ABC Company, which agrees to make a matching contribution to employee 401(k)s of 50 cents on every dollar, up to a sum equal to 6% of each employee's compensation. If Alana contributes the full 6%, which totals $1,860 a year, ABC will top it up with an additional $930 (50% of $1,860).

That makes a total (employee plus employer) contribution of $2,790 a year, or $232.50 a month. Even invested as per our (conservative) formula, those contributions would create a fund totaling about $145,000 after 25 years. The employer contributions alone would have yielded roughly $48,000 of that amount. Free money indeed.

14. Refinance Your Mortgage

Much of the monthly mortgage payment for most people comprises interest costs. Even in an environment of rising interest rates, refinancing a mortgage can deliver huge savings, under the right circ*mstances. For example, you may have improved your credit rating and are eligible for a loan with better terms.

As an example, a 30-year fixed-rate mortgagewith a $100,000 principal remaining with an interest rate of 9% has a principal and interest payment of $804.62 a month. That same loan at 6.625% reduces your payment to $640.31—for a monthly savings of $164.31.

Those savings, over 25 years and invested at 5%, including the one-time cost to refinance (between 3% and 6%, or between $3,000 and $6,000 for our example), would result in a lifetime benefit of at least $100,000.

15. Optimize Timing for Big-Ticket Purchases

Substantial savings are possible if you're willing and able to wait for seasonal sales and clearances on big buys. Those optimal times fall into two basic categories.

The first are major holidays, almost all of which are now an excuse for retailers to hold "sales events" of some kind. The end-of-year holiday season is the best example, beginning with Black Friday sales the day after Thanksgiving.

Carefully researched, Black Friday buys can often, though not invariably, be the best of the year, especially in electronics categories such as TVs and computers. Categories featured in the sales on holiday weekends include appliances on Memorial Day, furniture on July 4th, and mattresses on Labor Day.

The other major sale opportunity is to snap up older items as this year's models begin to arrive, or as seasons end. Buying last year's stock does, however, mean selection may have dwindled and you sacrifice acquiring the latest features and technology—but those advances are fairly incremental given the maturity of most big-ticket categories.

Optimal categories and times to take advantage of model-year and seasonal changes include cars in October and November, grills in September, and winter sports gear and clothing in March and April.

The Bottom Line

Chances are slim that you'll want—or be able—to take advantage of all of these savings strategies, and your gains from them will surely vary if you do. Still, it's inspiring and impressive to total the take from all the strategies we outlined.

Collectively, they'd deliver a nest egg after 25 years of about $524,000. And they'd do so, for the most part, with fairly minimal hardship. You could even get better at sandwich-making than that guy at the deli.