If your bank account wound up in the red a time or two in 2017, you aren’t alone. According to GOBankingRates’ survey of New Year’s resolutions for 2018, 21 percent of Americans hope to pay down debt in the coming year, while 20 percent would like to spend less and save more.
Whether your goal for the year is to shore up your emergency fund or save for a down payment on a house, there are steps you can take to cut costs and boost your bank account. Most of these hacks offer at least $1,000 in annual savings — some offer less, some offer a lot more. Implement most or all of these tips so you can save a lot of money in 2018.
Switch to LED Bulbs
You don’t have to make sacrifices to keep more of your money. In fact, something as simple as switching the light bulbs in your home can help you save big. Robert Farrington, founder of The College Investor, discovered this when he switched all the lights in his house to more efficient, longer-lasting LED bulbs.
“In our home, we have a lot of recessed lighting in main areas — like the kitchen and family room — which we leave on all day,” Farrington said. “By simply switching these out, we’ve lowered our electric bill by roughly $80 per month. That gets us to about $960 a year.”
He saves even more in November and December, however, because he uses LED Christmas lights. In the past, incandescent holiday lights would add $100 to his electric bill each year. “Switching to LED outside saved us another $70 just for December,” he said.
Winter Is Coming: How to Lower Your Energy Bill
Get Cheaper Cellphone Service
You can dramatically cut the cost of your cellphone service by switching from a major carrier to a wireless service reseller.
“I was paying $125 per month for cellphone service from AT&T,” said Jon Dulin of Money Smart Guides. “I switched to Cricket and pay $35 a month now,” he said. “That’s almost $1,100 a year. The best part is, AT&T owns Cricket, so my coverage is exactly the same.”
You can compare cellphone plans at MyRatePlan to see which carrier offers the best value for you based on how much data you use, how many minutes you need and how many people will be on your plan.
Contribute to a Flexible Spending Account
You can cut a big expense by lowering your tax bill, said Rocky Lalvani, a financial coach and founder of Richer Soul.
One way to do this is by making contributions to a flexible spending account for healthcare expenses. If your employer offers this benefit, you can contribute up to $2,650 to an FSA and use that money to pay for out-of-pocket healthcare costs. Contributions come out of your paycheck before taxes, so you’ll save an amount equal to the taxes you would have paid on that income.
“The amount you can save will depend on your federal income tax rate, which ranges from 10 percent to 39.6 percent,” Lalvani said. “Many people are in the 25 percent bracket, which means that for every dollar you contribute, you receive a 25-cent tax reduction.”
If you have young children, you might also be able to contribute up to $5,000 a year to a dependent-care FSA and lower your tax bill even more.
Contribute to a Health Savings Account
Another way to save for out-of-pocket healthcare costs and lower your tax bill is via a health savings account.
If you have individual health coverage with a deductible of at least $1,300, you can contribute up to $3,450 to an HSA in 2018. If you have family coverage with a deductible of at least $2,600, you can contribute up to $6,900 in 2018.
As with an FSA, contributions to an HSA can be deducted from your paycheck before taxes and withdrawn tax-free for healthcare costs.
Adjust Your Tax Withholding
Getting a big tax refund check in the spring can feel like a windfall. In fact, the average refund in 2017 was $2,763, according to the IRS.
If you’re getting a refund that big, keep in mind that it’s your money you’ve let the government hang onto interest-free throughout the year. You could be saving that money each month in an interest-bearing account instead and have more at the end of the year than that refund you’d get.
If you get the average refund, you could boost your paycheck by about $230 per month by adjusting your withholding on a Form W-4 to have less tax taken out.
Refinance Your Mortgage
One of the biggest expenses for many people is a mortgage, Lalvani said. If you got yours years ago at a higher interest rate, you might be able to reduce your monthly payments and save big by refinancing, he said.
For example, lowering your mortgage rate from 4.5 percent to 3.5 percent on a 30-year loan with a $100,000 balance lowers your payment by $57 a month, which adds up to $684 in annual savings, Lalvani said. “The higher your current interest rate or mortgage balance means that your savings will be even greater,” he said.
In fact, 4.5 million homeowners could save an average of $260 a month by refinancing their mortgages at today’s rates, according to a report by Black Knight Financial Services. That would translate to annual savings of $3,120.
Get Your Full 401k Matching Contribution
You might be leaving free money on the table — money that could increase your savings — if you’re not contributing enough to your workplace retirement account to get the full matching contribution from your employer.
Most employers that offer 401k plans match employees’ contributions — typically $1 for every $1 they contribute, up to 6 percent of the employee’s annual income, according to Financial Engines. Still, 25 percent of employees don’t contribute enough to receive their full matches. As a result, they leave an average of $1,336 in free money on the table, according to Financial Engines.
Talk to your employer’s human resources department to find out how much you need to contribute to your 401k to get the full employer match. Then, boost your contributions to take advantage of free money you can add to your savings.
You’re on the right track if your retirement savings are invested in mutual funds. But you can keep more of the money you’ve worked hard to save by switching from actively managed mutual funds with higher fees to low-cost index funds, said Clint Haynes, a Kansas City financial advisor and president of NextGen Wealth.
An index fund is a mutual fund that tracks a particular market index, such as the Standard & Poor’s 500 stock index. “While index funds aren’t exactly the sexiest investments in the world, they are extremely inexpensive and still outperform the majority of actively managed mutual funds on an annual basis,” he said.
For example, if you had $100,000 invested in actively managed funds that charge an average of 1.25 percent a year, you would be paying $1,250 in fees annually, Haynes said. If you move your money to index funds that charge only 0.10 percent a year, you would pay only $100 dollars a year and keep the other $1,150.
“Fund management expenses can add up to tens of thousands of dollars over time,” he said. “The less you pay, the more you keep in your own pocket.”
Ditch Your TV Service
Experts frequently advocate cutting the cable chord as a great way to save money. But most consumers aren’t following this advice.
According to research from Leichtman Research Group, 79 percent of households with a TV subscribe to some form of pay-TV service. And the average amount they spend each month is $106. Ditching that service would save $1,272 per year.
You don’t have to give up TV entirely, though. You can watch local stations with an antenna. Digital Trends tested several antennas and recommends the Winegard Flatwave, which currently sells for about $30 on Amazon. And, you can even watch some of your favorite cable channels — like ESPN and HGTV — on the websites for free.
Look for Lower Electric Rates
Many states have deregulated energy markets, which means consumers in those states might have a choice of providers, according to Electric Choice. Because providers are competing for business, you might be able to save by doing some comparison shopping and switching.
Providers often offer discounts, gift cards, frequent flyer miles and other promotions for new customers, and some even offer points for airline rewards programs. You can see electricity rates that local providers offer at Electric Choice.
Get Help Lowering Bills
Negotiating with your service providers for lower rates can pay off, but not everyone likes the idea of haggling. If that’s not for you, a third party can do the dirty work for you.
Emilie Burke, founder of personal finance blog Burke Does, recommends using the negotiators at BillCutterz to call your providers and get lower rates for you.
“Between cellphone, cable and any other monthly bills, they can easily save you over $100 a month, totaling over $1,000 per year, even after the fees they charge,” she said. BillCutterz splits the savings with you 50/50. “It costs nothing if you don’t save, so there’s nothing to lose.”
Transfer Credit Card Balances
“An easy way to save $1,000 this year is to refinance your high-interest debt,” said Pauline Paquin, a personal finance expert and founder of Reach Financial Independence. For example, you might be able to transfer the balance on a credit card with a high interest rate to a card with a low introductory rate and reduce the amount of interest you pay.
If you transfer a $6,000 balance on a card with a 19.99% APR to a card that offers a 0% APR for the next 12 months, you will save about $1,200 in interest over a year, Paquin said. The key is to pay off the balance before the introductory rate period ends and the interest rate rises.
Do a Pantry Inventory
Food is one of the biggest household expenditures — after housing, according to the Bureau of Labor Statistics — so finding ways to cut this cost can net big savings.
Angie Nelson of The Work at Home Wife said she’s been able to lower her grocery bill significantly by keeping a running list of meals she can make with what’s in her freezer or pantry.
“It might not be planned out down to the day of the week we will eat each meal, but knowing what’s available without a lot of time and thought saves me extra trips to the store and from ordering in,” she said. Relying on her pantry and freezer inventory saves her at least $30 a week, she said, which adds up to more than $1,500 over a year.
Eat Less Meat
Meat can account for a big chunk of your food budget, so leaving it off the menu a couple of times a week will help you save money, said Mindy Jensen, community manager at BiggerPockets.
For example, the average cost of sirloin steak — as of November 2017 — is $7.91 per pound, according to the Bureau of Labor Statistics. If you have a family of four and serve each person 8 ounces of steak, you’re paying an average of $15.82 for 2 pounds of meat. If you serve meat just once a week, you’ll spend only $822 a year, as opposed to $1,645 if you serve it twice a week.
“My favorite meatless meal? Bean tostadas,” Jensen said. You can buy 16 tostadas for $3, a can of refried beans for $1 and a bag of cheese for about $2.50. In total, $6.50 buys a family of four two meals at least, she said.
More Low-Cost Recipes: 6 Meatless Meals for Under $20
Earn Cash Back on Purchases
You can save up to $1,000 a year by taking advantage of cash-back programs to earn a percentage back on purchases you regularly make.
For example, a TD Bank survey found that 21 percent of consumers use cash for purchases rather than credit cards that could be earning them rewards. Credit cards aren’t the only way to earn cash back, though.
“I am usually able to earn around $200 to $400 per year on my online purchases using Ebates,” Nelson said. Ebates partners with more than 2,000 retailers to offer members cash back when they shop at those online stores through Ebates.
Nelson said she earns a similar amount each year using the Ibotta cash-back app to earn rebates on her grocery shopping. “Both programs have additional opportunities and referral programs that can make them even more lucrative for the very little work involved,” she said.
Use the Sinking Fund Method
If you have a short-term savings goal — such as a fund for the holidays — Chris Peach of Money Peach recommends using the sinking fund method. “If you want to have $1,000 by next Christmas, you can start now with minimal effort,” he said.
Here’s how it works: If you get paid biweekly, put $40 every payday into savings for 26 weeks, and you’ll have $1,000 by next Christmas, he said. “If you are paid weekly, you can set aside $20, and if you are paid on the first and 15th of the month, set aside $42 every payday,” Peach said.
Just setting aside a small amount each time you get paid will add up quickly.
Take the 52-Week Savings Challenge
The 52-week savings challenge is another way to accumulate savings without feeling much of a pinch on your budget. “On the first week of the year, set aside $1,” Peach said. “Week two, you will set aside $2 and week three, you will set aside $3.”
You’ll do this every week, increasing the amount you set aside until you reach week 52 and set aside $52. By the end of the year, you’ll have $1,378 in savings, Peach said. And that doesn’t even account for any interest you might earn.
Save on College Costs
You might be able to take advantage of tax breaks to save money if you’re paying for college tuition.
“College-related tax credits like the American Opportunity Tax Credit and the Lifetime Learning Credit can mean extra money in a parent’s pocket,” said Julie Rains of Investing to Thrive. The American Opportunity credit is worth up to $2,500 per student, and the Lifetime Learning Credit is worth up to $2,000 per tax return.
You can claim only one credit per year for qualified education expenses — such as tuition and fees — paid for yourself, your spouse or a dependent, according to the IRS. Your income also must fall below certain limits to qualify.
Because these are tax credits, they’ll reduce your tax liability dollar for dollar. So if you can claim the full $2,500 credit, you’ll reduce your taxes by $2,500. Note that these deductions might change or even disappear for 2018.
Give Up a Vice
Quitting a bad habit, such as smoking, can be tough — but the payoff can be big if you want to save a lot of money. The average cost of a pack of cigarettes is $6.17, according to the Campaign for Tobacco-Free Kids. If you have a pack-a-day habit, you’re spending over $2,000 per year.
Just cutting back to half a pack a day will help you save $1,000 over a year. Quitting will save you more. Plus, you might save on tobacco-related healthcare costs if you quit.
Don’t Pay for Things You Don’t Use
Chances are, you’re making monthly payments for services you don’t really need. This might be subscriptions for magazines you don’t read, credit monitoring that you can get for free or a gym membership you don’t use.
Jessica Garbarino of Every Single Dollar slashed more than $1,000 from her annual expenses by ditching a service she didn’t need.
“I was paying roughly $85 a month for a storage unit that was only a third full,” she said. “I moved into a new apartment that has better storage, but I also took the opportunity to throw out, donate and sell most of what was in the storage unit.”