9 Frugal Tips for 2021- How to Save Money This Year

Frugal Tips for 2021

Has your household experienced severe financial challenges during the Covid-19 pandemic? New research suggests that at least 50% of households in the nation’s four largest cities of NYC, Los Angeles, Chicago and Houston are struggling to stay protected from the economic effect of the virus.As American households will need to cut back substantially to make ends meet this year, check out these top nine frugal tips for 2021 to keep your budget on track. 

Balance transfer

Taking on debt should be avoided when committing to extreme frugal living, but if you’re like the average American who already has an average of $51,900 of personal debt to their name, then it’s time to look at the best way to handle it. 

Start by adding up all of your outstanding debts, which may include: 

  • Mortgage
  • Credit cards
  • Auto loans
  • Student loans
  • Store cards. 

Once you know exactly how much you owe, it’s best to consolidate this into a single loan product which you pay down as a monthly outgoing.

Balance transfer rates of 0% are available which would allow you to pay zero interest for a fixed period, making this one of our top money-saving tips for the year.

52-week savings challenge

Would you like to save $1,378 this year as part of a 52-week savings challenge for 2021

This goal might seem impossible if you’ve recently experienced a drop in earnings or your financial future isn’t looking promising as of the beginning of the year.

But what if we told you that by opting for a frugal 2021 through sheer thriftiness, you could invest the money saved into a separate pot? 

The 52-week savings challenge allows you to save in increments, starting with $1 in your first week, $2 in your second week, $3 in your third week, right the way up to $52 in your final week. 

At this point, you’ll have created a sizable emergency fund pot, plus the interest earned which should help you to deal with any financial uncertainties that arise in 2022. 

The beauty of this challenge is that you start small to help you get the ball rolling and get used to making the necessary cuts to your frugal grocery list and weekly budget plan.

Avoid late payment fees

When you’re struggling financially, the pile of unpaid bills can quickly turn into a mountain.

But the problem with avoiding these invoices is that you can be charged a late payment fee which only makes the problem worse. 

If possible, begin by automating your bills to come out of your account via direct debit. This ensures you don’t accidentally incur fees by forgetting to pay on time.

If you’re really struggling to make your monthly payment on time, then it’s best to call your provider and come up with a plan of action. 

Many companies are able to negotiate payments and spread them out or change your payment date accordingly, especially during the pandemic.

It’s best to make contact rather than risk being charged a penalty fee. 

Reducing your energy payments

How often do you check the settings on your thermostat? If you’re looking for frugal tips related to your sky-high energy bills, then this one is government recommended. 

The US Department of Energy reveals that you could save as much as 10% this year on cooling and heating, by carrying out this simple hack. 

The idea is that you set your thermostat back by 7-10 degrees Fahrenheit for 8 hours of the day. 

You can make further seasonal savings by adjusting your thermostat to 68 degrees Fahrenheit during waking hours during the winter, and then setting it lower whilst you’re sleeping or away from home. 

Similarly, in the summer, keep your property warmer whilst you’re away during the day or for overnight stays. 

You can then adjust back to an ambient 78 degrees Fahrenheit when you’re at home and need to stay cool. If you stick to these heating and cooling money-saving tips, you could reduce your energy bills by an average of $83 per year.  

Sell your car

Did you do much driving in 2020? Whether locked down completely or just staying close to home, the Federal Highway Administration has reported that there were 40% fewer cars on the road in April 2020, shortly after the pandemic took hold.

This is in comparison to the same month of 2019. 

Frugal tips for 2021

Whilst this is undoubtedly fantastic news for the environment, this can also represent excellent cost savings for the average driver. 

If your situation has changed and you’re not driving as much as previously, or if you’re a two-car household where one vehicle would suffice, then consider selling your auto. 

If you own your vehicle outright, then you could use the money from the sale to plunge into your savings account, or to help out with upcoming expenses if you’ve recently lost work. 

Alternatively, if you have an auto loan, then the sale will enable you to pay this off and you’ll have one less outgoing payment to worry about each month. 

Home insurance

Another positive side effect of the pandemic is the fact that some types of crime have decreased across the globe. 

The United Nation Office on Drug and Crime reports that theft, robbery and burglary crime has decreased by more than 50% in most countries.

A more pronounced effect was evident in areas with stricter lockdown measures.

As workers have taken up their positions in home offices, some on a permanent basis, there are fewer opportunities for criminals to intrude within vacant properties. 

The result is that home insurance premiums have been lowered by some providers. 

If you haven’t yet been offered a discount on your home insurance policy, and are spending more time at home than previously, 2021 is a great time to renegotiate your premium.

A minimalistic approach to spending

Marie Kondo may be interior design’s goddess of decluttering, but her trend-setting techniques actually make excellent money-saving tips too. 

If you’re unfamiliar with the KonMari method of organizing your belongings, Kondo demands that you go through all of your possessions and only keep those that ‘spark joy’. 

The pile that doesn’t make the grade should be thrown out, recycled or given away as desired. Whilst this leaves you with a decidedly minimal interior, it also has a profound impact on your future spending. 

Many converts report that they feel less compelled to spend money on low-quality clutter or nick-nacks that they know they won’t enjoy a few months or years from now. 

Instead of wasting money on unnecessary items, the KonMari method will force you to evaluate each potential purchase and only buy what you truly need or desire.

Cashback apps

Although a truly frugal existence will cut down on shopping altogether, if you find that you do still part with your cash online, then it makes sense to maximize your dollars.

Have you heard of cashback apps? 

In the digital age, frugal converts can make use of cashback apps and coupon codes as an alternative way to save money in 2021.

The idea is that when you shop with a retailer, you will receive a small payment back as a reward. 

By downloading reward apps, you simply link your cards to your account and start your shopping.

Your cashback will be automatic from participating retailers and once you’ve reached a set limit, you’ll be able to cash out and receive your money back. 

Apps such as Dosh, Fetch Rewards and My Finance are all good starting points if you’re ready to live more frugally.  

Coupon codes

Coupon codes are the equivalent of how our parents used to shop, cutting coupons out to save money on their next shop.

You simply enter a short code at the checkout stage of your order in order to obtain a discount. 

If you’re a previous customer, then you may have been sent a loyalty coupon in a marketing email. Always check for these before placing your order.

Alternatively, you can browse coupon code sites for the latest deals and discounts. 

Some coupon finders can be added to your browser for a digital frugal shopping experience.

Sites such as RetailMeNot, DealsPlus, Coupon Cabin and Slick Deals feature codes from thousands of brands and retailers. 

Better still, they test out and verify the codes before publishing. 

Actioning your frugal tips for 2021

If you’ve been inspired by this expert guidance, then what are you waiting for? Now is the time to make an action plan to identify exactly how and where you can make savings from your budget. To gain access to more personal finance advice, The Finances Hub provides a wealth of frugal tips for 2021 to help you move towards a financially secure future.

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