5 simple ways to turn spending into savings

Managing your personal finances can feel overwhelming. Limited resources and rising expenses can make saving seem impossible. And it’s not just you — two-thirds of respondents in The Guardian Study of Financial and Emotional Confidence™ identify as spenders rather than savers.¹

Breaking out of this trap begins with acknowledging that everyone’s spending habits have room for improvement. With an open mind and a dose of discipline, you can find simple ways to help convert your spending into savings. Here are some places to start:

1. Track your spending

You would be surprised by where your money goes. Tracking every purchase can help provide you with better insight into whether your spending reflects your priorities and help you clearly identify opportunities to save. Your credit card might also have a tool that helps you view all your subscriptions so you can make sure you’re not paying for things you don’t use.

2. Save on energy costs, help the planet

Learn how to become more energy efficient by performing an energy audit. You can do it yourself by purchasing a home energy monitor, or ask your local power utility, which may offer in-home energy audits. Also, these cost-saving ideas may help:

• Install a programmable thermostat to regulate home temperatures while you’re out.

• Use a power strip to reduce the electrical use of your “instant on” devices by shutting off the power strip at night.

• Install door sweeps to block drafts and close the fireplace damper when it’s not in use.

• Service your heating system to make it more efficient.

• Use public transportation, or service your car to increase gas mileage.

3. Save on memberships

Unused memberships are costly expenses you’re not getting value from. Be realistic on how likely you are to use a membership and if you do join, you can reduce costs by:

• Signing up when a special offer is available. Negotiate to get their best price or join with a friend for potential referral discounts.

• Asking your employer or insurance carrier for possible membership cost subsidies or special affiliated pricing.

4. Start no-spend Mondays

You’ve heard of meatless Mondays, right? Well, this is its fiscal cousin. Sure, you may still have some ongoing bills that occur on a Monday, such as rent or a car insurance payment. But the point is to deactivate your wallet on Mondays. Bring your coffee from home, pack your lunch, and walk to work (if possible). For example, if you usually spend $20 every Monday, you could save up to $260 in one season.

5. Build sustainable money habits

These one-time cost cuts are great opportunities to help recalibrate your financial life, but for long-term savings, they should be built into sustainable habits. We suggest aiming to save 15 to 20% of your annual income.

You can also use money-saving tools to help monitor your progress and help you reach your savings goals. By considering your income and monitoring your spending habits, these tools can automatically help you set aside money and continue to save. If you’re still struggling with where to begin, a financial professional can help you create a savings plan that’s right for you.