7 Ways to Comfortable Saving During a Time of High-Cost-of-Living

So, are we expected to be saving in this high-cost-of-living environment? I am going crazy just trying to meet my immediate needs. With prices soaring and pay not keeping up, what can we do to mitigate our survival and set ourselves up for a comfortable retirement?

In today’s rapidly changing world, the concept of saving often feels like a distant dream. With prices soaring and wages struggling to keep pace, many of us find ourselves caught in a relentless cycle of trying to meet our immediate needs. As the daily grind consumes our attention, the idea of saving for a comfortable retirement can seem like an elusive goal. However, it’s crucial to recognize that the path to financial security and a worry-free retirement begins with a commitment to saving, even in the face of economic challenges.

In this blog, we’ll explore some practical strategies for saving, even when it feels like the odds are stacked against us. We’ll discuss the importance of saving, how to get started, and offer tips to help you build a solid financial foundation. So, let’s dive into the world of saving with determination and purpose because securing your future deserves the attention it demands.

Create a Budget and Stick to It

I am reminded of a quote from the Cheshire Cat in Alice in Wonderland.

‘If you don’t know where you’re going, any road will get you there.‘

Alice in Wonderland

The very first thing to do when it comes to saving money, regardless of how much you make, is to get a clear picture of your financial situation and set up a budget that’s practical. Start by keeping tabs on your monthly expenses to see where your money is going. This process can often reveal areas where you might be spending more than you realise.

Once you’ve got a good handle on how much money is coming in and going out, it’s time to set aside some of your earnings for savings. Even if it’s just a small amount, regularly putting money into your savings account can really add up over time. To make saving a family affair, consider adding some rewards along the way. For instance, your daughter might be more willing to skip those Friday takeout dinners if it means she gets a special treat with her friend over the weekend, courtesy of the family savings fund. Just remember to keep the reward cost lower than what you’re saving but still enticing enough to motivate everyone!

Prioritise Needs Over Wants

When faced with a tight budget in this high-cost-of-living environment, it’s essential to prioritise your needs over your wants. Needs include housing, food, utilities, transportation, and healthcare. Wants, on the other hand, encompass non-essential items like dining out, entertainment, and luxury purchases.

While it’s essential to indulge occasionally, making conscious choices to cut back on discretionary spending can free up money for savings. I remember doing this with my family and discovering that we had a whopping five TV subscription services. We had to question whether we truly needed cable, Amazon Prime, Netflix, AND Disney+. It was a bit of a debate in my household – sports, Marvel movies, and those intriguing Netflix documentaries were all on the line.

Set Clear Savings Goals

Setting specific savings goals can provide you with the motivation and direction needed to build your financial security whether your objectives include creating an emergency fund (which, personally, I feel should be THE number 1 goal), funding your child’s education, or marking off your travel bucket list, having a clear target in mind will make it easier to allocate funds to your savings account.

Make sure you include any interested parties in your planning – spouses, children, etc. Your chances of success will be enhanced if everyone who normally spends time with you is invested in making it work. Break down these goals into smaller, more manageable milestones to track your progress.

Explore Income-Boosting Opportunities

Once you’ve figured out how much you need to save, you might realise there’s a gap between your goals and your current financial situation. Boosting your income, even if it’s just for a little while or on the side, can make a big difference in your saving game. No one knows how long this high cost of living will last. Start searching for ‘side hustles’, freelance gigs, or part-time jobs that match your skills and interests. Nowadays, the economy offers plenty of flexible opportunities to complement your main income. Think about turning a hobby or something you’re passionate about into an extra income stream.

Consider using skills you’ve acquired over time for consulting or part-time work. Monetising hobbies or passions, such as selling crafts or offering workshops and participating in the gig economy by driving for ride-sharing services, freelance writing, or online tutoring. I know many people are now turning to tutoring at their local school or lending a hand to help out in their local communities as a way to make extra income. In today’s digital age, don’t be afraid to learn new skills, especially with internet access and the influence of social media. It can open up fresh opportunities you might not have considered before.

Automate Your Savings

A smart way to make sure you save money regularly is by automating it. On payday, arrange for an automatic transfer from your checking to your savings account. When you treat savings as a fixed expense, you’re more likely to meet your savings targets. It made a big difference for us; my husband and I both put money into a joint savings account, and that shared responsibility helped us stay committed. If that’s possible for you, I suggest having an accountability partner. It can be a real game-changer and pay off in the long run.

The key is to keep this account separate from your everyday account. If possible, at a separate bank. This separation ensures that you won’t easily dip into your savings for everyday expenses. By putting your money in a high-yield account, you’ll earn more interest over time, helping your savings grow faster. Regular deposits, no matter how small, can accumulate significantly over time. It’s a simple yet powerful strategy to achieve your financial goals.

Cut Down on Fixed Expenses

Fixed expenses, such as rent or mortgage payments, insurance premiums, and subscription services, often eat up a significant portion of your income. Consider ways to reduce these costs by shopping for more affordable insurance, refinancing loans to secure lower interest rates, or negotiating with service providers for better deals. Even a small reduction in fixed expenses can free up funds for savings.

Saving money can sometimes take longer than we’d prefer, especially when certain fixed expenses have contract terms. What I found effective was keeping track of when my contracts were ending. I made sure to negotiate for better deals, whether it was getting discounts or finding more affordable providers for utilities like gas, electricity, and mobile phones. It’s amazing what companies will offer you when they think they will lose you as a customer. Take full advantage and negotiate!! It’s a simple strategy that can make a noticeable difference in your monthly expenses.

Embrace Thriftiness

Embracing a frugal lifestyle was a challenge for me, mainly because I had a well-paying job. It was difficult to align my spending habits with my colleagues. Admitting that I hadn’t taken that trendy European summer trip that everyone else had was tough in casual conversations. To make changes, I cut back on takeout, shifting from a weekly indulgence to once a month. Furthermore, cooking meals at home instead of eating out became a habit, resulting in significant long-term savings.

Things we did to cut back on expenses.

• Cut out unnecessary subscriptions (tv, movie, news, etc).

• Renegotiate fixed expenses (car, mobile, gas and electricity).

• Prep for grocery shopping.

• Switch to lower-price grocery shops.

• Cook at home rather than get takeout.

• Reduced take-out Friday to once a month.

• Minimize restaurant spending.

• Map out major purchases.

• Became intentional about purchases.

• Restrict online shopping.

• Stock up on household supplies when they’re cheap.

• Sold superfluous items online.

Conclusion

Saving money in today’s high-cost living environment may seem like an uphill battle, but it is possible with careful planning and discipline. By creating a budget, prioritising needs over wants, exploring income-boosting opportunities, setting clear savings goals, automating your savings, cutting down on fixed expenses, embracing frugality, and building an emergency fund, you can take significant steps toward financial stability and a more secure future. Remember that small, consistent efforts can yield substantial results over time, and the peace of mind that comes with it.