7 Ways to Save Money You've Probably Never Tried

Let this be the year you go beyond basic budgeting tips. Here are seven ways you can save money that you’ve probably never tried before.

1. Take out a loan to defeat your debt

It sounds counterintuitive, but taking out a loan could be a critical first step to becoming debt free.

When the pandemic struck, many families relied on credit cards to get them through the following months. It’s a fine short-term survival strategy, but the brutal interest rates on credit cards — often topping 20% APR — can bury you over the long term. Payday loans are even worse.

To consolidate your debt, you apply for a new low-interest loan and use the money to pay off all of your high-interest bills. You’ll still owe the same amount, but your new rate will help you save you money on interest and potentially free yourself from debt years sooner.

2. Ditch your traditional bank account

If you’ve got money to spare, you’re probably socking it away in a standard savings account from one of the big banks. That might seem like a safe strategy, but with every passing day, that money is losing its value.

Traditional bank accounts pay practically nothing in interest; as of June 2021, the average interest rate for a savings account is 0.06% APY. Any meager earnings you see will be obliterated by inflation.

To give your money a chance to grow and maintain its purchasing power, look for a high-yield savings account. Some banks — especially digital banks that don’t have to pay for physical branches full of employees — are offering interest rates as high as 0.55% APY. That’s over nine times as much interest as a normal account.

3. Let a robot do your budgeting for you

Even if you make a mental note every single time you open your wallet, it’s hard to keep track of where all of your money is going.

Mortgage payments, car payments, insurance bills, utility bills, credit card interest, streaming subscriptions, investing fees — a lot of money vanishes every month to these automatic expenses.

To keep track of your active and passive payments, consider using a dedicated budgeting app. Some more advanced apps will check to make sure you’re not losing money on subscriptions you forgot about and can even negotiate a better rate on your monthly bills.

4. Trade houses — or at least mortgages

Moving may seem like a drastic measure, but some of your neighbors are probably mulling it over. A LendingTree study late last year found just under half of Americans were considering a move to reduce their living expenses.

Living just a little further away from an urban center can make an extraordinary difference. Depending on where you live, a $500,000 home could be a stunning mansion or multifamily investment property — or a one-bedroom condo.

But if moving is out of the question, you can still save a ton by taking advantage of today’s incredibly low mortgage rates. Many homeowners have already refinanced in the last year, but an estimated 14.1 million Americans who haven’t can still act fast and save an average of $287 a month, according to mortgage technology and data provider Black Knight.

5. Invest your ‘spare change’

When your budget is tight, investing for the future is probably the last thing on your mind. But given enough time, even pocket change can become a source of wealth.

Take willpower out of the equation by using an app to automatically invest spare change from your day-to-day purchases. Say you buy a doughnut for $2.30 — the app will round up the cost to $3.00 and invest the 70 cent difference in a premade portfolio.

Saving a few cents at a time may not seem like much, but $2.50 worth of daily round-ups becomes $900 in one year — and that’s before counting the additional gains you could make in the market.

6. Trade in your overpriced insurance policies