This money-saving tips post is a guest post from Paul Wilson, the co-founder of Money Merlin, a mobile app that gives you money as you learn how to manage and grow your money.
Several years ago, I was invited into my boss’s office, and to my surprise, I was laid off due to the company’s downsizing efforts. I was the sole provider for our small family and wasn’t prepared to go without a job for the next four months.
It was a stressful time for my wife and me, and I instantly made finding a job my #1 priority. I gained a lot from those long months, but what I remember most was how I scrutinized every dollar spent while looking for a job.
While thinking about what money tips to share with the JibberJobber crowd, I thought about the advice I’d give to my past unemployed self. When you’re struggling financially, advice like saving 20% of your income isn’t helpful, especially when you need every dollar to make ends meet.
Instead, I’ve decided to share money-saving tips that even the most strapped job seeker can employ. My hope is that no matter where you are in your job search (or future search), these ideas will provide a few insights on how to manage your money better.
1. Use the Money Merlin App [Shameless Plug]
As this is my own company, I’m biased toward the importance of using our app. However, the first step to improving your finances is to learn all that you can. A study by MersofMich showed that a lack of financial knowledge could lead to fewer employment opportunities. Basically, the more you know, the better you can improve your situation.
Money Merlin, a 100% free app, gamifies financial literacy. As you progress in the app, you earn $5 to $10 gift cards. Not only are you gaining a better understanding of your money, but you’re making a little money along the way.
Download the Money Merlin app.
2. Track Don’t Budget
I have a good friend who is an accounting professor. His advice to his freshmen students in his personal finance course is not to have a budget but only to track their finances. In fact, they spend the entire semester just following their expenses and sharing their insights. He told me that the mere tracking of their expenses changed his students’ habit of spending to be more frugal.
The advice to track your expenses makes sense. Studies show that tracking your weight can help you lose weight without dieting. Making you aware of whether you’re gaining or losing weight influences your eating habits. It’s a psychological trick, but it works on your finances as well.
I use Mint, a completely free software that makes tracking finances easy. I’ve pulled into Mint my bank accounts, investment website Robinhood, and even my payment apps – PayPal and Venmo. Having all my accounts in one place provides a comprehensive dashboard. I then spend 20 to 30 minutes a week categorizing everything I’ve spent.
This simple act of tracking and categorizing has helped me see where our family can cut the fat in our spending. It also helps me not forget about the subscriptions I paid for but don’t use any more. When I started tracking my expenses, I found that I had a $5 monthly subscription that I hadn’t used for 3 years. Knowing that my neglect cost me $180 has made me more vigilant on keeping up with my tracking.
Whether you use software like Mint or pen and paper, tracking will keep you aware of the money coming in and out of your bank account. It will also help you be more mindful of the little expenses that eat away at your precious funds.
3. Dealing with Bills Instantly
This tip wasn’t always practical when I was job hunting since my income was erratic. However, I learned by not paying bills as quickly as possible, I ended up either paying more in late fees or inaccurately managing the rest of my money. It’s never fun to think you have the funds only to see the excess go to an unpaid bill or an unnecessary late fee. So, even if you can’t pay the bills instantly, it’s still smart to factor them right away into your budget.
An easy way to handle your bills is to automate the payment of them. Many companies these days allow you to enroll in autopay. You might even be able to save some money by automating. Companies, like your cell phone provider or student loan lender, may provide a discount when you set up your account on autopay or opt-in on paperless billing.
You can automate those companies that don’t have autopay programs with your bank. All bank websites have a way to set up automatic payments. Doing this gives you an accurate understanding of exactly how much money you have to work with each month.
4. The Power of Lists
Slickdeals.net surveyed 2,000 adults about their budgeting habits and weekly spending. The second biggest budget buster for those surveyed was grocery shopping (with online shopping beating it out by 1%). Grocery stores have masterfully perfected the art of getting you to spend more.
When I graduated from college, my first job was with a loyalty and reward company. I can’t remember the exact statistic we shared with business owners, but part of our sales pitch was showing them how much more people spend when they have a loyalty and rewards card. Yes, even the programs designed to save you money are actually used to have you spend more money.
Another interesting fact you should be aware of is the mental toll that shopping takes on you. You might not realize it, but psychologists refer to the phenomenon of having to make a lot of decisions in a short amount of time as decision fatigue. It’s why supermarkets sell candy and chips at the cash register. Impulse buys mostly happen when you’ve spent the last 30 to 60 minutes making multiple micro-decisions.
Understanding all of this, shows how a strict shopping list can be extremely helpful. A list will help you minimize the decisions you need to make, focus on your absolute needs and steer you away from unneeded items. You can level up your game if your local store offers to collect the items for you, and you only need to pick them up. Walmart, Sam’s Club, and Target offer these services for free. So, take advantage of them if you can.
5. No Spend Days
Even if you’re not making ends meet, it’s surprising how you’re still able to spend money on a daily basis (particularly if you have kids). The average American spends about $164.55 a day. This changes depending on your age group, but even the youngest group, Gen Z, spends on average $92.13.
A great habit to develop is fasting from spending for a day. The task is straightforward, don’t allow yourself to spend any money on anything unnecessary for one day. As the old idiom goes, a penny saved is a penny earned.
However, don’t stop at a single day. Push yourself to go a whole weekend without spending a penny. If you’re truly up for a challenge, go an entire week without binge spending. Not possible? This woman went a whole year doing this!
6. The Power of Cash
Dave Ramsey is famous for the cash system, but that’s because it works in helping you save money. Digital money is much easier to let go of than physical hard cash.
A U.S. Consumer Payment Study found, on average, people spent $112 with a credit or debit card, whereas the average purchase with cash was just $22. Furthermore, people spent 83% more with credit and debit cards! That’s an astounding amount and a strong argument for primarily using cash to pay your expenses.
However, it doesn’t end there. Paying with cash completes the payment cycle. There’s no interest, no debt, and you become much more aware of what you spend. Credit and debit cards do make paying large expenses easier, but here again, your bank’s automated systems come in handy. In our day and age, it’s possible to go without a credit or debit card. Paying in cash isn’t convenient, but neither is not having money or being in debt.
7. Giving Purpose To Your Loose Change
When you start using cash, you can bet you will have change, and it adds up. For this article, I tried to hunt down a YouTube video I saw years ago of a dad funding a family trip to Disney on loose change. He was a janitor and kept all the change people threw in the trash. I couldn’t find the video, but I also don’t doubt it (if you stumble across the story, send it my way). The little things really do add up.
When you’re jobless, every penny counts. Yet, even if you’re gainfully employed, every penny should still count. To give your loose change more meaning, use it towards a goal. Pay down debt, put it towards your Robinhood stocks, or like the dad in my previous story, save for an experience you’ll remember.
If you’re like me, you don’t want to spend hours counting your change. The Coinstar machines that automate the change counting might seem tempting, but it seems counterintuitive with an 11.9% service charge. There is a way around this fee. Instead of getting cash back from these machines, you can opt to have gift cards. Doing this gives you the ability to get the full amount of your change back.
If you are one of the many people who don’t want to use cash, there is still a way to use your change. Several mobile apps will round up to the nearest dollar on your debit card and help you save the extra cents. A few years back, I did this with the app Acorns. In five or six months, it had put $700 into a savings account for us. By literally nickeling and diming every purchase we made, we had enough to put towards one of our financial goals.
8. Fighting FOMO
A study of 1200 people found that FOMO, or the fear of missing out, is a serious issue when it comes to finances. In fact, 60% of people surveyed made financial decisions based on FOMO. This was particularly true with millennials, which saw 56% of their age group being impacted by fear.
One way to fight this financial FOMO is to understand where it comes from. Research found that FOMO shows, “…those with low levels of satisfaction of the fundamental needs for competence, autonomy, and relatedness tend towards higher levels of fear of missing out as do those with lower levels of general mood and overall life satisfaction.” Summarized: you’re not happy, so you fear you’ll remain unhappy if you miss out on something.
Another study on FOMO found “one’s need to belong is a main factor which influences the Fear of Missing Out. As the personal need to belong is higher, the more susceptible one is to this phenomenon.”
When you’re in a financial crunch or without a job, these definitions make a lot of sense. You’re not happy with the lack of funds, and you feel everyone else’s finances are in a better position. These unfounded ideas create a concern that your situation will have you miss out on something that everyone else is a part of. Feeding into these irrational fears could quickly impact your finances negatively.
Knowing where your FOMO is coming from empowers you to fight against it. The first study found in this one of the money-saving tips showed that FOMO went away after 24 hours. So, instituting a hard fast 24-hour delay rule on significant financial decisions should safeguard you from buyer’s remorse or, worse, financial trouble.
Some psychological tips on fighting FOMO that don’t directly relate to your finances are focusing on gratitude and seeking out meaningful relationships. These tips counter the very definitions we just reviewed, and studies show that you’ll be happier by following both practices (gratitude research and healthy relationship research).
Wrapping Up My Money-saving Tips
Going back to my personal story at the beginning – things worked out. I did eventually find meaningful and rewarding work. I was able to straighten out my finances. And I gained some profound life lessons in the process.
Yes, it was hard, and being frugal as a job seeker wasn’t easy. I also wasn’t perfect at it. We had to overcome some issues that my mistakes caused. However, by not giving up and correcting these mistakes, we pulled out of our financial slump, and we were stronger for it.