As the summer winds down, you may be looking at your bank accounts and wondering where all your money went — and you’re not alone. U.S. consumers admitted spending $765 more per month, on average, compared with the summer of 2020.
But you shouldn’t beat yourself up for indulging in seasonal activities, weekend getaways, and dinners out this summer (after all, it felt good to get out of the house again!). It’s imperative that you get back into the swing of budgeting, especially as the expensive winter holidays quickly approach and inflation fears become a reality.
Prices on goods across various consumer categories increased by 5.3% in August 2021 compared with August 2020, representing the largest jump since 2008. And, with rumblings of potential supply chain disruptions, trucker shortages, and major shipping delays, expect some items to get even more expensive this season, including toys. In fact, some experts caution parents about a potential upsurge of 5% to10% in toy prices.
This doesn’t mean you’re doomed to take on more debt or forgo holiday gift-giving altogether. Believe it or not, there’s plenty of time to beef up savings ahead of the holidays. With a whole two months to go before the holiday shopping season kicks off, consider cutting expenses in these five areas of your budget to build up your savings to over $600 by Black Friday.
The figures are calculated as potential savings over a two-month period based on the average amount spent in each category per month.
1. Improve Your Grocery Shopping Strategies: $266 Potential Savings
Cooking more at home doesn’t directly translate into savings. That’s because people tend to buy more food than they need, which results in wasted groceries.
American families waste around $1,600 worth of produce every year — or an average of $133 a month — according to Feeding America. However, you can drastically reduce your grocery shopping bills and lower your food waste with a little thoughtful planning.
Begin by planning meals for the week and look for recipes with overlapping ingredients.
Opting for frozen produce and buying fresh foods only as you need them are other ways to reduce the chance of perishable groceries going bad, both of which can reduce your spending and help you save up to $266 in eight weeks.
2. Move Your Money to an Online Bank Account: $38 Potential Savings
You may be spending more money than you’re saving at your bank thanks to the various fees it charges. One of the most wasteful fees you may be paying these days is for checking account maintenance.
In fact, a recent survey from MoneyRates.com found that this charge runs about $14 per month for anyone who doesn’t meet the required minimum account balance. The good news is, plenty of banks and credit unions offer free checking accounts, so making the switch can help you save up to $28 in two months.
But you can save another $5 per month by moving your money to a high yield online savings account.
The median amount of savings for American households is $3,500. And 23% of consumers surveyed said they wouldn’t open an account at an online-only bank, according to a 2020 study by The Ascent. The problem here, though, is that you earn almost nothing back at a traditional bank.
Instead, move your savings to a high yield online savings account offered by e-banks like Quorum, which offers a higher return of 0.6% APY (annual percent yield), compared with just 0.01% to 0.03% APY at national banks like Wells Fargo and Bank of America. This move means you could potentially earn an extra $5 per month!
3. Cancel Your Gym Membership: $88 Potential Savings
Anyone who makes a resolution to improve their health and signs up for a gym membership around the first of the year usually does so with good intentions.
However, motivation quickly dwindles, and memberships collect dust. Approximately 67% of gym memberships go unused every year. With an average monthly cost of around $44, this money can be better applied to other areas of your budget. And, canceling doesn’t mean you have to give up on your fitness goals as there are plenty of ways to work out for free at home.
Go for a walk or run around your neighborhood, stream a free cardio class via YouTube, or use your own body weight or various household items for strength training. Being honest about your gym use and nixing that membership could help you save around $88 in a couple of months.
4. Transfer Your Credit Card Balance: $140 Potential Savings
The average credit card balance hovers around $5,313, according to the 2020 Consumer Credit Review from Experian. And considering the average credit card interest rate is approximately 16%, anyone who makes just the minimum payment is looking at spending a whopping $6,543.52 to pay the debt off.
If you don’t have enough cash to make big payments toward your current debt, you can still avoid paying interest by transferring your balance to a 0% balance transfer card. Many of these no-interest promotional offers allow you to make small monthly payments without incurring interest for between 12 and 21 months.
This can buy you more time to pay down debt without increasing your monthly payment and give you the chance to stash the money you would have spent on interest toward your holiday shopping budget.
Always make sure to review new credit card offers and compare balance transfer cards to find the best one for your needs. Making this move can help you sock away an additional $140 by Black Friday.
5. Cut Back on Clothing Purchases: $126 Potential Savings
The average adult in the U.S. spends up to $209 per month on new clothing. This is one area you can easily scale back without sacrificing the latest fashion trends.
Shop for used clothing, shoes, and accessories at sites like Poshmark, thredUP, and eBay, where you can find popular brands and styles for around 70% off regular retail prices.
For anything you want to buy brand new, always look for online coupons and cash back on sites like CouponCabin.com, which says its average user saves around $20 with a coupon and earns $4 cash back per online transaction.
Since opting for used clothing means you can snag popular fashion for an average 70% savings, this strategy means you can sock away as much as another $126 for your holiday shopping needs.