Saving money is something we all value in one way or another. Whether it’s saving a few dollars by using a coupon at the grocery store, getting a good discount on a pair of shoes, or watching the dollars begin to add up in saving for a family vacation. When we save money, ultimately–we win!

Something that has always crossed my mind, however, is this:

Can the few dollars I save by shopping at Dollar Tree instead of at Target help me reach my financial goals in the long run?

Is clipping that extra coupon or purchasing the generic brand of a product really worth my time?

Would it be ok if I simply budgeted how much money I was going to save that month and then splurge on the other line-items of my budget?

The answer to all of these questions is…yes!

Watching that Savings Grow!

There are numerous ways that we can save money, and there is not a one-size-fits-all method of handling money when it comes to saving for an emergency fund, or saving up to go on a family vacation.

Ultimately, it is up to you and your family the best ways that you will work toward making those dollars in your savings account grow each month.

Active vs. Passive Saving

There are two different ways we can save our money–active and passive savings. Both have their benefits, both require hard work and discipline, and both offer a great reward!

Active Saving

Whenever I think I am going to start “saving up” for something, active saving is typically what comes to mind first. Active saving happens when we go through our budget and actively determine the dollar amount we will be placing in to our savings account for that month.

For example: My husband and I value having a comfy place to sit every evening. We also typically host families over for dinner, occasionally lead a small group through our church, and just enjoy relaxing in our home at the end of the day in general.

When we realized that the futon we’ve carried over from college was no longer providing enough space to host more than one other person in our house–we knew we needed to start saving for something a little more comfortable, like a comfy couch!

We decided early on that we would not spend more than $600 on a couch and a loveseat, so we had a target in mind of how much we needed to save to purchase this in cash. In order to reach our goal, we set a line-item in our budget to save $200 each month toward our “comfy couch fund.” Then, within 3 months, we had enough money to go to the furniture store to pick out a good couch and loveseat set to purchase.

Now, this might seem like a frivolous example of purchasing furniture, but it can be used as a guide to buy anything. I mean–anything! From buying a car to a new pair of shoes, saving for a new washer/dryer set or saving for a Coach purse, this method of actively setting aside money toward your goal each month works.

Passive Saving

It is simple to understand how intentionally setting aside money each month will ultimately help you reach your goal of purchasing an item. Active saving is very intuitive and it provides results that are very easy to see–you can watch the money actively grow in your savings account.

However, let us not neglect the power of passive saving. Passive saving may not be as sexy as active saving, as it is not as easy to identify, and often takes a little more work to achieve. But when used together, passive saving complements active saving, and can help you reach your goals even faster than if you simply worked on one savings technique alone.

Passive saving occurs when we do not spend the full price on something. A few methods of passive saving are:

1. Discounts and Coupons

This can be done through saving small amounts of money on a purchase through the use of a coupon or purchasing something at a discounted price.

Some great examples of this are purchasing items that are on sale in bulk (especially items that don’t expire like diapers, toilet paper, dish soap, etc), or by using coupons like the famous Hobby Lobby 40% off coupon or other discounts for services like haircuts or car washes.

2. Bartering

Using the barter system to exchange goods or services with others, so that you do not have to actually spend money. My favorite example is babysitting. Babysitting can be so expensive, and is either a deterrent to going out on a date, or an additional cost to a date-night my husband and I will have to budget for. But…if you have friends who have children too, you can work out an agreement where they watch your kids one night so you can go out, and then you return the favor!

The barter system works for a myriad of goods and services, like cleaning houses, cutting hair, mowing lawns, changing oil in your car, tutoring, babysitting, taking friends to the airport–the list is only limited by your imagination. It helps save money and you can help friends out too!

3. Living life in access, instead of excess.

There are so many products in life we do not really need to buy, but have access to for free or for a very low cost. Books is definitely one of those items that can be controversial to use as an example, but just hear me out.

The average book on Amazon can cost anywhere between $15-20, but the resell value tends to be much lower. If you are an avid reader, or need to purchase books for school or work, this is an exception to the rule. But, if you are just looking to read for entertainment or general knowledge, going to the local library to check out a book can save you money, while still giving the opportunity to stay up-to-date on the latest read.

Other examples are borrowing clothes or items from friends if you only need an item once, such as a formal dress or a lawn mower.

Bottom Line

Saving money can be a challenge, but the rewards are always worth it. Next time you are saving up for a big purchase, working on building your emergency fund, or even trying to make some headway on paying off debt, work on using both active and passive saving methods to help you reach your goal faster!