How to save money on everyday purchases

For many Americans, the dollar doesn’t seem to go very far right now for everyday costs of living. While inflation has been declining, prices of various essentials are still up since the pandemic. As a result, many are still feeling the pain at the grocery store and the gas pump, as well as when paying insurance and utility bills.

As such, it’s not surprising nearly half of Americans (47 percent) say money is negatively impacting their mental health, as Bankrate’s latest Money and Mental Health Survey found. Of those who report a negative impact, 59 percent say paying for everyday expenses, such as groceries and utilities, is part of the problem.

If you’re devoting a large percentage of your take-home pay to essentials, it can be hard to save for emergencies and retirement, let alone afford discretionary purchases such as travel or a nice dinner out. Fortunately, there are many simple ways to trim your everyday expenses to free up some money, relieve stress and provide peace of mind.

How to save money on groceries

Americans spend around $6,053 a year — or $504 a month — on food eaten at home, according to consumer expenditure data released by the U.S. Bureau of Labor Statistics in September. In fact, prices of food at home (groceries) are up 1.3 percent over a year ago, based on the latest Consumer Price Index (CPI) inflation reading. This reflects the biggest jump in grocery prices since December 2003.

Being hit with sticker shock at the grocery store can be discouraging. However, a bit of planning can often help reduce your bill. In advance, decide upon a list of meals for the coming days, and check which ingredients you already have at home.

When you’re ready to head to the store, list in hand, remember these tips when it comes to saving on groceries:

• Join your store’s loyalty program: This can help you get money-saving deals or earn points for money off future purchases.
• Try generic products. Off-brand items can be significantly cheaper. If you’ve become loyal to a certain brand, give the store brands a try to see how well they stack up.
• Stick to your list. Only buying the items you’ve planned for is important in keeping your bill down. Extra snacks and other pre-packaged items can often add up and derail your budget.
• Never shop when hungry. Along the same lines, if your stomach is full, you’re probably less likely to make impulse purchases as you walk through the aisles.
• Avoid convenience items. It might save time to buy pre-washed, pre-sliced fruits or vegetables, for example, but it will likely end up costing you more money.
• Shop the store’s perimeter. The outer area of the store is where you’ll typically find meat, fish, produce and dairy products. These tend to be more cost-effective than the packaged goods that make up the inner aisles.
• Compare prices by ounce. If you’re debating between two boxes of cereal, the one with the lower price might not be the best option. Factor in the price per ounce to really know which is more cost effective.

Once you’ve purchased everything you need, spend some time in the kitchen for advance meal preparation. Pack your work lunches ahead of time, and also get any meal ingredients washed, cut up and ready for the oven, stove or slow cooker.

How to save money when dining out

Dining out can certainly feel like a luxury when your money is stretched thin by high costs of living. What’s more, the prices of food away from home have risen 3.9 percent over last year, according to the CPI inflation reading for September 2024. Here are some tips for treating yourself to a restaurant meal without breaking the bank:

• Make strategic meal choices. Sit-down restaurants are often known for serving up extra-large portions. If your meal of choice is offered in different sizes, consider ordering the smaller option. Or, you might decide to order an appetizer as a cheaper alternative to a full meal.
• See if you qualify for a discount. Some restaurants will take a set percentage off your food bill if you’re a senior, a child or if you’re an active member of the military or a retired veteran. You may also find discounts for students, first responders or other careers.
• Sign up for rewards programs. Various restaurants offer rewards programs, for which you can often get discounts, earn free food items and receive birthday treats. Chains with rewards programs include Chipotle, Dunkin’ Donuts, Panera and Starbucks.
• Go for lunch instead of dinner. Many sit-down restaurants have a lunch menu with less expensive selections than what’s on their dinner menu. The same is true for restaurants that may offer a happy hour with reduced priced appetizers.
• Skip the soft drinks. Opting for water instead of soda, tea or coffee can shave quite a bit off your bill. 

How to lower your utility bills

What you pay for utilities each month can really add up, especially when the weather turns considerably hot or cold. While it can pay to invest in newer, energy-efficient appliances, you can also bring down your utility bills by some simple changes to your household habits: 

• Adjust your thermostat: If you’re away at work all day, set your thermostat to a less comfortable temperature during those hours. Turning it back seven to 10 degrees daily can save you up to 10 percent a year on heating and cooling costs, according to the Department of Energy.
• Lower your water heater temperature. While your water heater thermostat may be set to 140 degrees automatically, lowering it to 120 degrees may suit your household better and decrease your bill.
• Unplug unused appliances. Keeping devices plugged in when they’re not in use can add to your electricity bill unnecessarily. Common culprits include phone and laptop chargers, computers and video game consoles.
• Use your dishwasher. If you have a newer, EnergyStar dishwasher, using it can be cheaper than washing dishes by hand. Such a dishwasher uses six gallons of water or less per wash cycle, while hand-washing can use between nine and 27 gallons, the U.S. Geological Survey reports.
• Use energy-efficient lighting. Replacing incandescent bulbs with LED ones can save households an average of $225 in energy costs per year, according to the Department of Energy. In addition to using less energy than other bulbs, LEDs last significantly longer, saving you the hassle of having to swap them out.

How to save money on gas

Before filling up at the pump, it could be worth taking the time to find out where you can find the lowest gas prices. Some ways to save money on gas include:

• Check out GasBuddy: On GasBuddy, you can search for which gas station near you is currently offering the lowest prices. GasBuddy also offers an app through which you can earn rewards and redeem them for money off future gas purchases. 
• Join gas station rewards programs. Many big gas station chains after gas rewards programs commonly enable you to earn points toward free gas or merchandise. Others provide rewards in the form of gas discounts.
• Sign up for a gas credit card. Another way to earn cash back on gas purchases is through a gas credit card. Some offer cashback rewards, while others allow you to earn money off future purchases.
• Find opportunities to drive less. If you have the flexibility of working from home some days, you can save a bundle on gas over time by not commuting. Working from home just two days a week can save you around $432 a year, according to FlexJobs. When you’re commuting to the office, consider carpooling with co-workers who live near you and dividing the gas expenses equally.

How to save money on entertainment

Whether you’re enjoying time at home or going out for an evening, there are various ways you can save a good amount on entertainment.

• Shop around for the right streaming services. If you’re paying a pretty penny for hundreds of cable channels you don’t use, cut your bill by finding a streaming service that meets your needs better. Providers that let you select which channels you’ll pay for include Sling, Hulu or Fubo.
• Take advantage of free admission opportunities. Check for local museums, state parks or galleries that offer free admission on certain days of the week or month. Bank of America’s Museums on Us program gives customers free access to more than 225 cultural institutions during the first full weekend of any month.
• Use apps for deals near you. Apps such as Groupon and Clipp.com can help you find deals on local shows, concerts, restaurants, spas and festivals. You can search by your location as well as types of deals in which you’re interested.

What to do with the money you save

One option to do with the money you’re able to free up is to save it in a high-yield savings account, where it’ll earn some interest and remain easily accessible for emergencies or other expenses that come up. When it comes to annual percentage yield (APY), all savings accounts aren’t created equal. While large brick-and-mortar banks are often known for their rock-bottom rates, you can often find significantly higher yields at online-only banks or credit unions.

Be sure to shop around for the best high-yield savings account. In addition to a high APY, also be sure to choose an account that won’t burden you with monthly maintenance fees. Be sure to pay attention to the minimum opening balance, which may be $0 but can be as high as $1,000 or more for some accounts.

“You’ve worked hard to squirrel away every bit of savings, but you want to make sure that money has the same buying power whenever you need it,” says Greg McBride, CFA, Bankrate chief financial analyst. “Seek out a high-yield savings account that enables you to earn a return that preserves the buying power of your money, as opposed to letting it sit in an account earning near-zero returns and having the purchasing power slowly eroded by inflation.”

Bottom line

A little advance planning and research can help you find creative ways to save money in any area of your budget, from groceries and gas to entertainment and dining out. Money you save is often best kept in a liquid savings account, while a high-earning certificate of deposit (CD) can be a good place for money you can afford to part with for a set amount of time. Ultimately, at times when money is tight and prices are high, reining in your expenses comes with many benefits, including savings in the bank, more financial freedom and peace of mind.