5 Ways To Still Save Money When Everything Seems More Expensive

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Saving can feel like an impossible task — especially when it seems every dollar is stretched thin. However, waiting until you’re in a better financial position to contribute toward your savings goals can mean missing out on valuable progress. 

Here are some expert-approved ways to still save money even when costs are out of control.

Reevaluate Your Financial Priorities

J.R. Williams, senior director of Ally Invest Advisors, said that when prices increase and inflation rises, purchasing power shrinks and it’s vital to make every dollar count.   

“Take the time to sit down and check in on your financial priorities for both the short and long term,” he said. “Whether you’re contributing extra towards retirement or saving up for a new car, determine if there are any goals you can shift while you focus on your areas of most immediate need, like paying bills, car payments, mortgages or paying down high-interest debt.”

Track Your Spending Habits

Williams said that once you have your financial priorities locked in, check your budget to see how you can adjust spending and savings goals to stay on track. 

“When your budget feels a bit tighter, it’s a good time to evaluate spending for unwelcome habits affecting your finances, like overspending on dining out or recurring subscriptions,” he explained. “Cutting down on discretionary spending doesn’t have to drastically impact your daily life, but it’s a great way to reduce strain on your budget.”

Optimize Your Everyday Savings

“When savings goals are impacted by inflation or higher prices, try and get in the habit of saving regularly and often,” Williams said. “Most people won’t hit their savings target immediately, but give it time and consistency and optimize where you can.”

Williams gave these tips for optimizing your savings: 

• Find a competitive rate: “High-yield savings accounts can help grow your hard-earned money by offering higher interest rates compared to traditional savings accounts, helping your money grow faster and better combat the effects of inflation,” he said. 
• Utilize smart tools that will boost your savings: “Competitive rates are only part of how you grow your savings. Look for a bank with free tools like our ‘buckets’ and ‘boosters’ to help you organize, optimize and analyze your money, so you can push your savings further. Ally Bank customers who utilize our high yield Savings Account and smart savings tools save an average of 2x more than those who don’t,” he added.
• Leverage recurring transfers: “Automatically transferring money into different savings buckets or accounts on a schedule makes saving an automatic part of your life and can give back valuable time you would’ve otherwise spent planning and manually making individual deposits,” he said.

Keep an Eye on Long-Term Goals, Like Retirement

Williams explained that when saving for retirement, a common rule of thumb is the 80% rule, which estimates that you’ll need about 80% of your current annual expenses each year in retirement. 

“This isn’t a hard and fast rule, so when unexpected expenses arise as a result of inflation, consider meeting with a financial planner who can ensure you have a personalized strategy tailored to your retirement goals and financial situation,” he said. “They can help you stay on track with your plan, navigate the complexities of your investment options and optimize your savings.”

Stay Calm and Control What You Can

“It’s easy to feel overwhelmed when there’s a lot of fear in the market, so try to stay focused on the long term,” Williams explained. “When there are dips in the market, it’s important to resist the urge to immediately react. The market will go down and up over time, so in the meantime, work to manage your money emotions with resources like Ally’s free, virtual Money Roots program and utilize these tips to optimize your finances until the market eventually goes back up.”

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