Keep money in your pocket, save wisely, and retire well – all without feeling like you’re pinching pennies!

Every month, you could be missing out on ways to save money. Some money-saving methods are direct and immediately evident, whereas others might surprise you. Whether you’re trying to save more for retirement or simply spend less than you earn, here are some of our favorite ways to keep money in your pocket.

Try using cash to manage everyday expenses

Paying for things in cash instead of using a credit card could help you save money. An average U.S. household carries $6,849 in revolving debt. And, in the third quarter of 2020, credit cards had a 14.58% average annual interest rate. This means that Americans are spending hundreds of dollars on interest without even knowing it.

However, when people can see the money they are spending, they are less likely to overspend. Therefore, it might be wise to use cash instead of credit cards when purchasing everyday items such as groceries, gas, and more.

Spending cash can help people save money because they either have to stop spending or get more cash when they run out of cash to spend. The average bank customer makes four $60 withdrawals from ATMs a month for a total of $240 in cash to spend. Depending on where they choose to pull their money, they may spend up to $12 in ATM fees throughout the month. These fees can add up to about $150 per year. Although they could save even more if they’d used an ATM from their host bank, they are spending less on fees each year than if they were paying credit card interest and holding themselves accountable by using cash.

Use credit cards wisely

Some things are difficult to pay for in cash. For example, many people use automatic billing or online bill pay. However, many bills stay the same each month and are easy to budget for. Additionally, paying online and automating payments often eliminates room for error and saves on the cost of stamps.

Make small changes at home

Energy is an expense that can fluctuate month to month. However, there are plenty of small changes you can make at home to save a lot of money on your energy bill. For example, you should try to only run full loads in washing machines and dishwashers. This way, you can save money on the electricity it takes to run the machines and the electricity it takes to heat the water. When it is time to replace your appliances, you may also want to evaluate energy-efficient appliances to reduce your energy cost over time.

Additionally, your monthly water bill can fluctuate as well. If you’re used to washing your car with a hose, you may want to try filling a bucket to wash and rinse your car instead. Additionally, be mindful of turning off the tap while shaving or brushing your teeth. Small, impactful changes can add up to tens of dollars of savings each month.

Impactful, long-term changes you can make

When people start saving for retirement, they tend to use a taxable brokerage account. However, taxable accounts have a drawback: investors must pay taxes on their investment income in the year it is received. In other words, investors are continually paying taxes rather than growing their investments. Therefore, you should investigate ways for you to invest that can grow tax-free.

Traditional IRAs and employer-sponsored retirement plans allow individuals to save for retirement using pre-tax dollars. The money you invest in IRAs and employer-sponsored retirement plans are deductible from your taxable income. Additionally, your retirement accounts can grow and compound without being taxed. Over time, you can save a significant amount on taxes and earn more money for retirement. The money in traditional and employer-sponsored IRAs is taxed when the money is withdrawn.

Find ways to save money in retirement

By saving wisely now, you could guarantee that you are financially sound in retirement. This means that whether you’re saving tens of dollars a month on your electricity bill or finding new ways to create space in your budget, you can also invest your savings.

One way to save for retirement is by using a Roth IRA. A Roth IRA is different from a traditional IRA for a couple of reasons. First, the dollars you invest in them are not tax-deductible. Second, the withdrawals are tax-free in retirement. Therefore, you pay taxes on your investment upfront but can receive retirement income for 20 or 30 years without paying federal income taxes on it. Many people pay taxes on their retirement income, so investing in a Roth IRA now can help you save money in the future.

The bottom line: everyone has opportunities to save

Sometimes, opportunities to save are right in front of us. Other times, we may not realize the impact of our financial decisions for years to come. It is possible that saving now can also mean savings in the future.

As you begin or continue your savings journey, it is wise to speak with a financial advisor. A trusted advisor can help you find places in your budget to help you save and maximize those savings by investing in the right places.