Many people want to save more. It isn’t easy to put money aside when you are already careful with spending and/or have a tight budget. Café de la Bourse presents 19 simple ways to reduce your expenses, save money, and grow your savings.
We will first see that to spend less without sacrificing your pleasures, you simply need to trim down fixed expenses. Then, don’t neglect common sense and negotiation. Rationalizing your finances is a clever way to achieve real savings. Finally, it is essential to manage your savings well and to choose the most suitable investments according to the projects to be financed.
How to save? Café de la Bourse’s view in 30 seconds
To save regularly, start by tracking your expenses, reducing your costs, and automating a transfer to your savings at the beginning of the month. First, build an emergency fund, then adapt your investments to your projects and your investment horizon.
19 simple tips for saving and cutting costs in video
Also available in video are a few simple ways to spend less and save more.
Rent instead of buying
You may be excited about doing renovations at home, but don’t let your common sense fly away. Instead of rushing to Castorama to buy that fantastic hammer drill, rent one.
Think before spending your money on expensive items that you’ll use only once a month or once a year. Many peer-to-peer tool lending sites have sprung up in recent years. Use them! You can save substantial amounts.
Buy instead of rent
“But you just said that …” – Keep reading, you’ll understand.
Don’t break the bank renting for products you use regularly and that you will keep for a long time.
In short: if it’s expensive and occasional, rent. If you use a product regularly that has a long life, buy it.
Eat your groceries
Did you know that the French throw away about 10 million tonnes of food each year, or 150 kg per person? And that food is, of course, something they bought beforehand. The commercial value of 10 million tonnes of food waste is estimated at 16 billion euros. Depending on your budget, this can represent hundreds or even thousands of euros per year. Save your precious money by eating everything you buy.
If the idea of cooking for yourself seems insurmountable, at least opt for takeout rather than dining in. You’ll save on tips, wine, and dessert. But you can also turn this chore into a pleasure. Organize cooking contests with your partner and/or children, take on the challenge of cooking from leftovers. Let your good conscience speak: wasting less and cooking more homemade meals is better for the planet and for your health.
Be organized
When, for example, you borrow books from the library, note it carefully on a calendar and save on late penalties.
The same applies to clothing subscription boxes. It would be a shame to have to pay for all the pieces they sent you, even if some don’t fit or you don’t like them, because you missed the return deadline. Many stores, eshops, and libraries offer email alerts to help you, so join now! Also don’t miss the deadline for returning items that don’t suit you when buying online.
Lose your bad habits
Smoking, overeating, drinking too much. These are bad habits that cost a lot to kick out.
It’ll be painful, but incredibly effective. Especially since a pack of cigarettes keeps rising in price (+85% over 10 years). Alcohol, heavily taxed, can also form a significant part of your budget. Reducing consumption is beneficial for health as well as for your wallet.
Dare to negotiate
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Because it is easier and more pleasant to save on constraints than on pleasures, carefully review all your electricity, phone, internet, insurance, bank charges, loan, etc., and negotiate! Many online comparison tools allow you to compare prices among competitors across many sectors.
Be bold about negotiating. You have nothing to lose, so why not ask your bank or online bank if they can reduce the borrower’s insurance on your mortgage? Instead of changing provider, don’t hesitate to request a discount on services like mobile phone or your internet access.
And, of course, don’t hesitate to ask for discounts on big purchases like a car or home furniture.
In difficult times, the seller is more than ever willing to lower their price rather than lose a valuable buyer. Both parties will ultimately come out ahead.
Know how to say “no”
For example, say no to that extended warranty contract. Look at how much it would cost to repair or replace the item if you really want to repair or replace it.
It will also often be wiser to say no to the seller for a number of options such as alloy wheels on your car or Carrara marble countertop for your kitchen. Even if it’s nice to treat yourself from time to time, keep in mind your budget not to exceed at the moment of a big purchase, and keep a critical eye on the additional options the seller tries to sell you.
Arrange automatic withdrawals
Make sure at least your monthly bills are paid by automatic withdrawals, to avoid forgetting and having to pay late fees or interest.
Set up automatic payment by going through your bank’s online service, or by arranging directly with the company or service provider.
For your savings, do the same and opt for automatic withdrawal by setting up a transfer at the start of the month when you still have money in your account. You will save without even thinking about it. Automation is a safe and free way to get rid of the stress related to organizing bill payments.
Group your providers
There is no point in paying several providers for similar services.
Call your internet provider to see if you can benefit from reductions if you switch internet, phone, or other services, such as TV or cable, or if you can obtain discounts by centralizing your multimedia subscriptions with a single provider, for example. Also be careful not to sign up for too many similar offers. Will you really have time to watch Canal+, Amazon Prime Video, Netflix, Disney+ and OCS? Not sure!
Pay off your consumer credits
Pay off your consumer loans if you have them. It’s the best way to succeed at saving money by reducing interest. If you don’t have any, don’t take one out! It is always financially better to save money for several months to buy the item you want than to take out a consumer loan to do it. You can still acquire it immediately if you can afford it or if you can pay in installments without fees.
Pay your taxes on time
Yes, paying taxes is tedious. And no one likes filling out their return! But doing it on time will help you avoid the unpleasant tax office reminders. More importantly, you will avoid fines, penalties, and interest (10% late penalty in the absence of a formal notice, 20% in case of late filing within 30 days following the notice, 40% when the return has not been filed within 30 days after receipt of a formal notice; plus 0.20% interest of the tax due per month of delay). Nobody escapes the taxman. Not even Chuck Norris, so if you must pay them, pay on time!
Do your accounts
It can take time but it’s something you should do to know where your money is going by expense category. At minimum, take a look at your banking app to see how much you have left. This will prevent you from overdrafting and having to pay exorbitant fees. It’s also the safest way to ensure you are sticking to your budget.
Set yourself a concrete monthly savings goal
Reducing expenses and sticking to your budget is necessary to save effectively, but not enough! Savings management is the second part to consider, and that starts with setting precise goals. If you stay too vague with “save more,” you won’t reach the objective. Set a number (realistic!) and don’t back down! If, as a rule, one can save about 10% of income, that may be lower for the lowest incomes, but also much higher for the highest incomes.
Be realistic about your saving capacity
However, be careful not to impose too high a savings rate on yourself. You wouldn’t keep it up in the long run. Don’t slash leisure and outings completely. If you try to restrict too much, you’ll end up not following any rule and endangering your finances. It’s better to save a little and regularly than a lot only every 3 or 4 months!
List all your projects to fund to save intelligently
If you know why you’re saving, you’re more likely to be motivated to set aside money. In the first instance, it is essential to build an emergency fund. This emergency fund, which should represent 3 to 6 months of salary, will allow you to comfortably cover all unexpected and urgent expenses. Once you have this cushion, you can consider funding other projects.
These could be short-term projects (pay for your next vacation), medium-term projects (fund your children’s education or buy a primary residence or a second home, for example), or long-term projects (prepare for retirement).
You can, of course (and it is even advised), save in parallel for all these projects. By knowing very precisely what your savings are for, you will be more inclined to commit to this effort and maintain it over time.
Choose the right investments to put money aside
Reducing expenses is necessary to save effectively, but not enough! Savings management is the second aspect to implement. It is essential to suitably adapt the savings vehicle to the project to be funded.
Do not place too much money in your Livret A
While the French tend to favor low-risk products like savings accounts, notably the Livret A, it is important to save on these instruments only to build an emergency fund and to finance short-term projects. The Livret A, but also the LDDS, the LEP if you are eligible, and other savings accounts, should be used to keep your emergency savings accessible at any time for unforeseen and urgent expenses, as well as to finance your short-term projects. And that’s all! So there is no need to max out your Livret A and LDDS or to open multiple savings accounts. Except in rare cases, you do not need to keep that much money available in this type of investment.
Invest your savings to grow your capital
Once you have a somewhat longer investment horizon, you should move toward investments that are riskier but far more rewarding. Life insurance, with its guaranteed capital euro fund and its unit-linked accounts that can be riskier but potentially more advantageous, is a very versatile investment that suits all investor profiles.
You can also invest in the stock market on equity markets via a PEA or a securities account, yourself if you feel comfortable, or as part of a managed portfolio in which your assets are managed by experts who make decisions based on market conditions, your risk profile, and your investment horizon.
Talk about money and learn about savings and investment solutions
Discussing money with your usual banker or with a wealth management advisor will also help you manage your money better because you will gain clarity in your finances, define objectives, one or more investment horizons, a risk profile, etc. All of these elements will help you save more and better.
All these tips will help you save more without acting as too much of a constraint on your purchasing power or gnawing too much at your pleasures. But the main rule might be to set a realistic and coherent goal. Just as a person who has never exercised won’t run a marathon in 6 months, a person who only has a Livret A won’t suddenly invest in the stock market or embark on PME crowdfunding overnight!
A few questions about how to save?
It doesn’t matter how much you earn! What matters is not to set aside every month a fixed amount that would be the same for everyone, but to set aside a percentage of your income, whatever it is: about 15% of what you earn. If you have high income, your savings will thus be larger than if you have a low salary. It’s up to you to define the exact percentage by creating a monthly budget.
It is essential to set aside the amount you plan to save each month as soon as you get paid. Do not wait until the end of the month to see how much you can save. It may be wise to set up an automatic transfer to a savings account the day after payday.
To save, choose your savings vehicle according to your investment horizon. Favor bank savings accounts for the short term and the euro funds of life insurance for the medium term. These capital-guaranteed placements will allow you to retrieve your savings intact at any time. To invest your savings in the long term, you can turn to the stock market and the real estate market.
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All of our information is, by nature, generic. It does not take into account your personal situation and does not constitute personalized investment advice, nor an invitation to buy or sell financial instruments. The reader is solely responsible for using the information provided, and Cafedelabourse.com cannot be held responsible. The publisher Cafedelabourse.com cannot be held liable for errors, omissions, or inappropriate investments.
