20 Easy Ways to Save Money Without Sacrificing Your Happiness

There are tons of articles on the web about saving, investing or getting out of debt… but this isn't one of them. While saving and investing are extremely important, many people are feeling pretty beat up by the economy and the market right now and don't want to hear it. Rather than lecturing on great personal finance and wealth building habits, I thought it would be fun and challenging to come up with easy ways to save money without sacrificing your lifestyle or happiness. Besides, this is still a form of wealth building even though it doesn't require any discipline. You have to crawl before you can walk, right?

Most of us are always looking for ways to cut back on spending. This can be difficult, it's tough to make a commitment to spending less or saving more when you feel like you're making a sacrifice. What do most of us feel like we'll have to sacrifice? Some of our most valuable asset, happiness, which is what makes it so hard. Do we have to pass on going out to eat with our friends and family or postpone that vacation we need so badly? Do we have to wait until next year to replace that ratty carpet or buy that new TV we've been thinking about for months?

To compound the problem, we find it the hardest to curb our spending when it matters most. For example, during hard times (such as a recession), bonuses and promotions are hard to come by and gas and food prices are usually increasing faster than our income. This is not a fun time to think about making MORE sacrifices even if they would make our life easier.

The list below contains many great ways to save more without changing your lifestyle, ways to cut back on spending without sacrificing any happiness. The best part about these types of habit changes is that, not only will they save you money, they are more likely to become long-term habits since they don't require giving anything up. Keep in mind that, because everyone is different, some of the items on the list below WILL sound like sacrifices to YOU. Whether or not something is a sacrifice is pretty subjective, it depends a lot on how greatly each reader values an item on the list. No problem, just skip the ideas that do sound like a sacrifice and adapt the ones that don't.

1. Eliminate Stuff that You're Paying for and Not Using

We often use the new things that we buy frequently at first, but over time we tend to set them aside and then they just sit there collecting dust. This isn't an ongoing problem when you're talking about one-time expenses such as a new set of tools or a new pair of shoes but this can be a real financial nuisance if you're talking about subscriptions. Why? Because the subscriptions are not a one-time expense, most will continue to bill you until you cancel. Companies that offer subscription services make a fortune off of people that don't bother canceling services that they no longer need or use.

Do you still need 200 channels so you can watch 15 movies at once and your favorite sport in 8 different languages? If you've had your current cable package for a while, you're probably not near as excited about it as when you first signed up. Couldn't you save $20 or $30 by downgrading and still have plenty of movies, sports and other channels available? Have you signed up for Columbia House DVD/CD memberships, magazines, websites, or any other services that will automatically bill your credit card monthly or annually? Think about whether or not you would miss any of them. No? Save yourself some money and cancel everything that you no longer need or use.

2. The Luxury Item List

Big purchases are worth some special consideration. Create a Luxury Item List of the big ticket items that you want (including vacations and activities such as concerts or sporting events). Think about how much you value each and then prioritize your list from "want most" to "want least". Now consider how much the items at the top of your list will cost you. If the top item is 30% of your monthly income and the second item is only 5% does that change the order of your list?

Here's what you receive in return for creating a prioritized Luxury Item List. First, the list forces you to prioritize your purchases, so you'll always buy things that you value the most first. Second, since you are forced to think about and plan for your big ticket purchases, you're much less likely to experience the buyer's remorse that is so common with impulse purchases.

3. Avoid Small Impulse and Habit Purchases

Impulse purchases, such as buying an item from a display while you're waiting in the checkout line, and habit purchases, such as buying sodas and candy bars every day at work, can really add up. The easiest way to break this habit is to realize that the pleasure received from impulse and habit purchases is fleeting and temporary.

Why waste your money on purchases that provide so little value or happiness? Pack an extra soda in your lunch, bring a healthy snack and ignore the 50% off sales. Getting your impulse purchasing habits under control will allow you to more quickly save up for items on your Luxury Item List from tip #3. Wishing you could afford a Nintendo Wii for the kids or a new set of clubs? Think of every dollar you save on impulse and habit purchases as money for items on your Luxury List. I'd normally suggest that you put most of this money in an Index Fund or a Roth IRA but since I promised not to lecture…

4. Take Advantage of Cheap and Free Entertainment

There are so many inexpensive forms of entertainment, and it's amazing how few people take advantage. Why not at least grab the low hanging fruit?

Do you rent movies or read a lot? You can spend quite a bit without even realizing it if you frequent Blockbuster and Barnes & Noble or order online via Netflix and Amazon.com. Have you tried your local bookstore? It's free, and most libraries always have the same new titles as your favorite bookstore. Did you know that they also have movies, and they're free too?! Granted, there's more demand for a smaller supply, so you may have to sign a waiting list for the newest and most popular titles. Fortunately, they have a wide selection so even if you can't get the newest releases, you'll almost certainly find a great book or DVD while you're there.

Do you prefer more social activities? Check sites like Citysearch.com, your local newspapers or ask your friends about free or inexpensive local events. You'll probably be surprised how much has been going on right under your nose. Classical and Jazz concerts, county fairs, art & craft exhibits, piano bars, local bands, free classes in all kinds of subjects (art, music, pottery, history, foreign languages, etc.) and beer & wine tastings are all common forms of free and inexpensive entertainment.

5. Go Semi-Pro

I'll admit that, during the playoffs and majors, I'd prefer to watch my favorite NFL, MLB or PGA stars over any semi-pro event, but during the regular season I'll take semi-pro any day! No traffic, cheaper beer, cheaper snacks, and the kids you're watching are playing purely for love of the game since they don't have multi-million dollar contracts. This is a much less expensive outing for a family or group of friends than a professional sporting event.

Semi-Pro sports are also becoming a popular form of entertainment again, they've had a real revival in the past few years, especially football, baseball, golf and soccer. I've been to great coliseum football games, semi-pro soccer, Nationwide tour events and minor league baseball games. The competition actually felt more intense than regular season professional events. The fans were really having a blast, you can just sit back and soak up the energy. Some of the players were locals and it's always fun to watch and pull for hometown athletes.

6. Make Things Last Longer

I don't mean you need to make your youngest wear stained hand-me-downs with holes at the knees and elbows, there are plenty of examples that are much less extreme. Do you really need to upgrade your computer/TV/stereo already or could you wait another few months? Can you go another week before you get a haircut? Can you get another year out of your car? Are there really THAT many new options on the latest greatest cell phone/iPod/computer that your old one is outdated or does it still work just fine?

This is one of the easiest ways to save, just buy as high quality as fits within your budget and then take care of your things so that you can get as much use out of them as possible. That's what you bought them for in the first place, right? The longer things last the more value you got for the money you spent, it's a win-win.

7. Stay Healthy, Nourish Your Body and Mind

Medical expenses can be outrageous, especially if you have a high deductible. Take care of your body in little ways that, combined, can really improve your overall health. Drink water instead of soda when you eat, choose a salad now and then instead of the burger, take a short lunch so you have time for a fifteen minute walk, take the stairs instead of the elevator, or go outside and play with your kids… okay, the last one might be an extreme example, kids can be exhausting. The point I'm trying to make is that making small healthy choices will really make a difference in how you feel every day all day plus will improve your long-term health.

Don't neglect your mind, it needs to be nourished as well. Stress, anxiety, anger and depression are as dangerous as fast food. They can cause high blood pressure, strokes, and heart attacks to name a few. Lethargy and laziness are also very unhealthy, they can lead to early onset of Alzheimer's, slow your reflexes and lure you into a constant state of mental "dullness".

I'm no expert, but there are a million books and websites on the topic of physical and mental health. Some of my personal favorites that require little effort since I enjoy this type of thing are reading lots of books, magazines and websites for relaxation or to learn more about my favorite subjects. You can also find creative ways to spend your commute to and from work rather than listening to the mindless chatter on the radio, such as thinking deeply about your goals and aspirations and day dreaming about the future.

Everyone is different so these recommendations may not work for you but if you take a few minutes to ponder (you're already doing better!), you'll come up with plenty of fun and interesting ways to stay mentally sharp.

8. If Your Company Offers Free Money, Take It

Would you like to get an instant 125% return on your savings plus a bigger tax return? Many companies have 401k Matching programs of up to $5,000. This means that they'll match you dollar for dollar on every penny that you contribute. That's a 100% free return for any money that they agree to match.

In addition to this free match, all of your 401k contributions reduce your taxable income so you will get a bigger tax return next year. If you're in a 25% tax bracket, you avoid that 25% tax on every dollar you contribute. If you're not contributing, I can promise with 100% confidence that you can contribute at least 2 or 3% of your income without even noticing the difference.

For example, if you bring home $2,500 per month and decide to contribute 3% to your 401k to take advantage of this free money, you will still bring home $2,425. What do you get in return? 125% instant gain on your money plus a bigger tax return. The average return on the S&P 500 since 1975 has been 10.75% so a 125% return is a pretty good deal. (keep in mind that this article is about "painless" ways to save, I would normally recommend contributing a much higher percentage. You should contribute at least as much as your company matches, it's free money!)

9. Drive Slower

Decreasing your cruising speed on the highway by about 10 MPH and accelerating slower when you're in heavy downtown traffic can cut your gas expense by about 30%. Driving fast is fun but if you're paying $500 per month to commute and haul the kids to games and practice, wouldn't you rather have that money in your wallet than in a gas pump?

Drive like your grandparents, 65 mph rather than 75 mph on the highway and accelerate slowly after the light changes since there's usually another light 100 yards down the street. 30% of $500 is $150 in savings per month. You can probably think of a lot more productive uses for that money than zooming light-to-light or flying down the highway only to wind up saving two minutes or less on your total commute time.

10. Leave the plastic at home

Plastic forms of payment are too easy for most Americans to use, leave your debit and credit cards at home, at least until you've established some financial discipline. You're trying to save up for items on your luxury Item List from tip #3, right? Good, then, for the next few weekends, try paying cash for everything when you go out. Only bring enough cash to cover what you intended to purchase before you left your house, whether it's dinner, groceries or a few items from Home Depot, Wal Mart or the mall.

You'll be amazed by how many benefits go along with leaving the plastic at home and by how much money this simple habit will save.

  • You won't be able to afford those guilt-creating impulse purchases that only provide temporary and fleeting pleasure anyway.
  • Since you know you need to bring enough cash to cover items you want to purchase while you're out, you'll have to do a little research on each item. Taking the time to do a little homework on the larger ticket price items will mean you'll be much more likely to find the best deal and to get the highest quality in your price range.
  • Not having enough cash with you for large unexpected purchases instills the habit of sleeping on it before you buy. Often, taking one extra day to decide before you buy items greater than $100 can save you a lot of useless purchases that you would have regretted and that would have postponed items on your coveted Luxury Item List from tip #3.
  • Sleeping on your purchases gives you an extra day to get excited about and anticipate the things you REALLY want. Plus, this adds very little inconvenience. Think about it, will the item still be there waiting for you tomorrow if you want it bad enough to come back and get it? You bet it will, and if you wanted it bad enough to come back and used that extra day to check that it fits within your budget, you won't feel even a tiny bit of guilt or buyer's remorse.

11. Conserve Energy

You can save about 3% on your energy bill for every 1 degree that you lower your thermostat in the winter or raise it in the summer during each 24-hour period. Remember to adjust your thermostat when you leave for work and, as long as it doesn't affect your sleep, when you go to bed at night. While this may only save you $20 or $30 every month, the savings for this good habit will certainly add up over time.

Filtering your own water is another related and easy way to save. For about $20 at Wal Mart or Target you can pick up a high quality filtering container that holds a gallon of water and easily fits into your refrigerator. This is a great save for those of us that prefer bottled water. In my personal experience, the water filtered through my refrigerator unit tastes cleaner. It's also more thoroughly filtered, a lot of the stuff you buy from the store claiming to be "natural spring water" may not be filtered at all and could contain all kinds of extra chemicals.

12. Pay Your Bills on Time and Don't Overdraw Accounts

Credit Card Companies and Banks make hundreds of millions each year on late payment fees and finance charges on overdrawn accounts. Avoid all of the extra and unnecessary late fees (which can run as high as $75 each at some of the more predatory sub-prime lenders) by paying on time. You should also avoid going over your credit limit. Think you have a great 2.9% interest rate on your new credit card? If you're over your max limit, think again, nearly all credit card companies bump you up to at least 18% when you go over your limit. Don't exceed your credit limits and take the time to read the fine print the next time you sign up for a card or loan.

13. Check Used Before You Buy New

Today, it's much easier to buy high-quality used anything than it was only a decade ago. Whatever you can find in Wal Mart or Target can now be found on Ebay or Craig's List. This goes for just about anything, from tools to cars. The quality control on used items has improved a great deal as well, many stores such as TJ Max or large vendors selling on Ebay offer the same types of return policies and guarantees on used items that they offer on new.

Buying used is a great way to get a much higher quality item than you could otherwise afford. People, especially Americans, LOVE to have the latest and greatest so they tend to upgrade pretty quickly. When other people dump their old stuff to buy the new, you can get some incredible bargains on brands that would be out of your price range if you tried to pay retail. Always check for used before you buy new.

14. Dining Out (and no… I'm not going to tell you to stop going out to eat)

We all love to dine out, it's our social time and a chance to reward ourselves for a week of hard work, to have a "date night" or to treat the family to a night out. How much do you typically spend each time you go out to eat; $60, $80, $100? If you go out to eat a lot, try mixing in some less expensive restaurants that you wouldn't normally choose.

For example, if you frequently go to the same steakhouse, try mixing in a less expensive chain restaurant such as Applebee's or TGIF now and then. While they may not have that aged ribeye, they have a fresh menu and an unfamiliar atmosphere. The "newness" of the experience can make it as enjoyable as your regular steakhouse and you'll probably save 25-30% on your total bill. Regardless of your normal fare, there's usually a cheaper alternative that you can mix in now and then to save a few bucks and enjoy a different environment.

15. Ordering In

Do you frequently order in? I've yet to run across a delivery place that doesn't have great deals and coupons available to try to attract new customers. You can usually save 15% to 20% off your meal if you'll take 5 minutes to check the internet for coupons or meal deals. Major chains have also made using coupons and ordering extremely convenient. You can choose coupons/deals, order your food, and pay with a few clicks of the mouse.

16. Cooking

Cooking is another great way to save money, especially if it's something you enjoy. Rather than ordering in or going out, go to the grocery store and pick up some of your favorite foods. Make an event out of cooking and choose a meal that will make the preparation interesting, challenging and fun. Most important, do it together. Cooking with your spouse or date can be a lot of fun and there's nothing more satisfying than eating great food that you made yourself.

If you're cooking impaired or if this sounds like too much work, no problem. Many grocery stores are adapting and will put together a meal that you only have to take home and heat up. You pay very little extra for this premium service, maybe 5%, so you'll still come out way cheaper than a restaurant. It's amazing how much less expensive a steak dinner with all the trimmings costs when you prepare everything at home, you'll easily save 50% even if you choose high-quality ingredients.

17. Avoid Temptation

Going to the mall? Leave the plastic at home or, better yet, find something else to do and avoid the place entirely. Were you planning just to window shop? If you're the type that frequents malls and other major retail outlets and are able to escape without spending a penny, then, by all means, have fun and enjoy yourself. If you're like the rest of us, and can't ever seem to get out of those situations without spending money, then eliminate the possibility by either leaving the cards at home or just finding something else to do instead.

18. Save Small Change and Small Bills

This is a small twist on a popular money saver that has been around forever. Everyone has heard of saving change, but that just doesn't add up any more unless you do it for years and most beginners don't have the discipline yet. Instead, save your change and $1s (and even $5s if you can spare them). This little stash will add up pretty quickly, after a few months you'll have enough to take your family out to dinner or to the movies for "free". Do something creative with the money that you save, start a 529 plan for your kid or pay down a credit card balance… oh, wait, I promised not to lecture. I suppose you could also apply it toward your Luxury Item List.

The last two on the list are a tough sell. Most people probably wouldn't include them in an "easy ways to save money" article, but they're two of my favorites so read through both suggestions to give them a fair chance.

19. Vacationing at Home

Going out of town can be outrageously expensive, especially if you have to purchase plane tickets, hotel, rental cars and other hard-to-avoid out-of-town expenses. Have you considered taking a vacation at home? To make a vacation-at-home work, you have to set strict boundaries to make sure you get the kind of enjoyment you would during a traveling vacation.

  • Hire an inexpensive maid service (and lawn service if necessary) to make sure that you don't ever have to deal with the normal routine of chores and honey-do lists. Arranging for someone else to handle the annoying daily tasks such as dishes, yard work, and laundry is a very good way to start your stay-at-home vacation.
  • Plan your meals for the week and make sure you're only cooking if cooking is something you really enjoy. Go out for dinner, order in, or turn dinner into a family and friends barbecuing event, whatever makes it fun and different.
  • Wouldn't someone be cleaning up your hotel room if you were out of town? Let the kids ignore their chores for the week too, the maid service can pick up most of the slack. Let the house go for a few days, this can be fun, especially for kids since they usually hate doing chores.
  • Get out and visit your city and the surrounding area as if you were a tourist. Day trips to entertainment venues, the beach or a sporting event are a lot of fun and really DO feel like mini-vacations.

Remember the the examples from Tip #4 Take Advantage of Free and Inexpensive Entertainment and Tip #5 Go Semi-Pro. When you go out of town for vacation, don't you generally try to participate in unusual activities? These same activities are most likely going on locally as well. People are usually surprised how much there is to do locally if they do a little research. Events such as Classical and Jazz concerts, beach and lake trips, fairs, art & craft exhibits, piano bars, live bands, sporting events, and beer & wine tastings can add a lot to your vacation-at-home experience.

20. Budget & Plan

Okay, admittedly, this one is a tough sell since most people hate budgeting and planning. I'm not asking you to break out a pen, paper and calculator or to open Excel and build a spreadsheet. I'm simply suggesting that you apply common sense and healthy personal finance habits to your spending and saving decisions.

The benefit? This will alleviate an enormous amount of pressure and stress in your life. After you get a little practice you'll get much better at managing money and making sound finance and investing decisions. Wouldn't it be wonderful to never again feel like you're living paycheck to paycheck or worry that you won't be able to make a payment. No one will ever care as much as you do about your money or your future, and you will be paid back many times over for taking the time to soak up a little financial and investing knowledge whenever the opportunity presents itself.

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