Getting out of debt, building a savings account to tap into if you suddenly need more money, and investing can improve your life. They say that money can’t buy happiness, but people who don’t have to worry about money are happier. People who are getting richer every year are happier than those getting farther into debt.

Saving can be difficult because your spending increases when you make more money. Getting a raise or a better job won’t necessarily save you from living paycheck to paycheck. Some people go into debt for a big purchase after getting a raise and end up worse off than they were.

Things can be even worse if you suddenly start making less money – not everyone can lower their expenses quickly. If this happens, you are far better off with savings and the opportunity to borrow money than no savings and a lot of debt.

Four Realistic Ways to Save Money

Saving money is easier if you have a concrete strategy. Merely thinking you should save more isn’t good enough, and feeling disappointed in yourself for not saving isn’t motivating.

Make a real, concrete plan and focus on the positive. Think positive thoughts like “I am going to get richer every year from now on,” not “I can’t believe I am still going further into debt.” With the right plan, your net worth will increase every year, and you can stop worrying about small amounts of money.

One of the best things you can do is keep track of what you spend. Make almost all of your purchases with a debit card instead of with cash, and then look at a bank statement that shows everything you spent in the last month. You will be surprised by how much you spend on things that have little value.

Regardless of which of the four strategies you focus on first, you should always make a budget and keep track of what you spend. People make many small purchases without thinking about how much they are spending. The more aware of your spending habits you are, the easier it is to change them.

Without further adieu, here are the four strategies:

1. Don’t Spend All of Your Money on Rent

Everyone wants to live somewhere nice. I am not saying that where you live isn’t important; living somewhere nice is. However, if you have to give really a lot up for the sake of a nicer place to live, it isn’t worth it. Way too many people spend so much money on rent that they become poor despite a decent income.

Many people have a lot to gain by moving to a cheaper place. You might be able to both spend money and save money this way, instead of spending more than you make even though you spend carefully.

One of the biggest financial mistakes people make is renting a place they can’t afford, and one of the best choices is spending less than 30% of their money on rent. Spending only a fraction of your money on rent is something that smart and successful people do.

An affordable place to live doesn’t have to be tiny or in a dangerous area. If you look around, you can find a good deal. It might take longer to find a decent place if you insist on spending less, but it won’t necessarily be much of a step down from where you live.

Even if the best place you can get for less than 30% of your income isn’t great, you can get a better place later on. Some people spend more than 50% of their income on rent, and if they go broke, they end up looking for a much cheaper place to live while in debt. If you spend less on rent, you can save money, invest, and move into a nicer place later on.

As well as spending less money on rent, be careful with all big purchases. New cars cost more than they used to, and not everyone can afford them. New cars are fun and impressive, but it isn’t worth it if a new car makes you poor.

2. Reduce Your Household Expenses

People spend a lot of money on energy, groceries, and water. While these expenses are necessary, you can still lower them. Once your bills are lower, you can put the extra towards getting out of debt or investments.

First off, don’t waste energy. People waste electricity all the time – they leave lights on if they aren’t in the room or are away from home. People also leave fans, computers, heaters, televisions, and many other things on.

You can do countless little things to lower your electricity and water bills, and they add up. Turn off the tap when you brush your teeth, take showers rather than baths, and make sure that all of your windows are completely closed when you are using heat or air conditioning.

Secondly, you can often both eat better and spend less money on food if you pay attention to what you are spending. If you cook at home, you can eat healthier and save money. You don’t have to cook anything time-consuming or complicated. Some of the best food is quick and effortless to cook.

Another way to save money is by doing some home improvement. Some home improvement projects can save you more money than they cost.

For example, if parts of your house are poorly insulated, it might cost a small fortune to heat them. If your basement or attic is cold, you can put in some new insulation that will quickly pay for itself.

Leaky faucets can also cost you a fortune. You might have to pay for about 27 gallons of water per day if you ignore an average leak. You will lose money every month if you don’t fix expensive problems with your home.

Fixing a leaky roof can save you a fortune in the long run if it prevents mold that is very expensive to get rid of. It is great to learn to do repairs yourself, but you can still save money with home improvement if you hire others.

3. Get a Consolidation Loan

Debt can keep you in debt for years or decades. If you have to spend all your extra money on minimum payments, you will stay poor. You don’t always have to find a better job or greatly cut your spending to get out of debt – you can get a consolidation loan instead.

Consolidation loans let you combine all of your payments into one and reduce your interest rate. If you owe money on more than one credit card plus have other expenses, it can be a hassle to pay all of the bills on time.

If you owe money on three different credit cards, a bank might let you have a consolidation loan depending on your income and credit history. The bank will pay off your credit card debt, and you will now owe the bank the total balance on all three of your cards.

However, your interest rate might be significantly lower. On your credit cards, you might pay 20% or more; on your consolidation loan, the rate might be 10% or less.

Many people that could easily get a consolidation loan do not bother or aren’t aware of the opportunity. They keep paying a lot of interest each month, not knowing how much money they could save.

Getting a consolidation loan if you have good credit and have a job is easy. The bank won’t doubt that you can make lower-interest loan payments if you can keep up with higher-interest credit cards.

If you have bad credit, getting a loan is harder. However, some lenders are more lenient than others. If your credit is bruised, but you make enough money to afford the loan, you have a chance. The longer ago your credit troubles were, the more forgivable they are.

4. Talk to Your Bank About Automatic Savings

If you do not have debt but still spend all the money you make, you could sign up for an automatic savings program with your bank. The bank will automatically put some of it into your savings account every time you get paid. Saving is easiest if you don’t have to think about it.

Some savings programs take a percentage of your pay and put it into a separate account. Others are a bit different; for example, a bank can round every purchase you make up to the nearest dollar and put the extra into your savings account.

At first, you might put all of the money into a liquid savings account that you can immediately withdraw any amount of money from. Before you start investing, pay off your debts and create a small emergency fund that you can rely on if you lose your job.

After you no longer have any high-interest debt and have an emergency fund, it is time to start investing. You can do a mix of high-risk and safe investments. Some of it should go into a retirement fund or safe stocks; you should also risk some of it on cryptocurrency or on high-risk stocks.

Remember that interest on a savings account is lower than inflation. Your cash savings will become less valuable every year. Commodities, property, investment funds, stocks, and bonds are all good investments.