Financial Security- But How? 9 Tips for Saving in the New Year

In today's fast-paced world, saving money can sometimes feel like an overwhelming challenge. With rising costs of living, student loans, and unexpected expenses, it can be tough to put aside a portion of your income for the future. However, building good financial habits doesn't have to be a daunting task. With a bit of strategy and discipline, you can gradually save money without sacrificing your lifestyle. Here are some practical tips to help you start saving more effectively. 

1. Create a Budget and Track Your Expenses 

The first step to saving money is knowing exactly where your money is going. Start by creating a monthly budget that outlines all of your income and expenses. There are plenty of free budgeting tools and apps, or you can even work with a simple spreadsheet. Once you have a clear overview, categorize your spending (e.g., rent/mortgage, utilities, groceries, entertainment, etc.) and identify areas where you can cut back. Tracking your expenses will give you insight into potential savings opportunities you might not have noticed before.  

2. Set money aside first 

One of the most powerful ways to save is to treat savings as a non-negotiable expense. When you get paid, prioritize putting a certain percentage of your income into savings before you pay any bills or make other purchases. Automating this process (via direct deposit into a savings account or setting up an automatic transfer) makes it easier to stick to this habit. 

A common recommendation is to save at least 20% of your income, but even saving 5–10% can have a significant impact over time. Over the years, these regular contributions can add up substantially, especially when invested wisely. 

3. Double Check your Subscriptions and Recurring Payments 

In the age of streaming services and digital subscriptions, it’s easy for small monthly payments to add up. Take a hard look at your subscription services — streaming platforms, gym memberships, magazines, apps — and assess whether you really use them. If you’re only using a service occasionally, consider downgrading to a cheaper plan or cancelling it entirely. Also, be mindful of any free trials you sign up for. Set reminders to cancel them before they convert to paid subscriptions. 

4. Cook More, Eat Out Less 

Eating out can quickly become an expensive habit. A coffee here, lunch at a café, and dinner at a restaurant can drain your wallet without you even realizing it. By cooking more meals at home, you’ll save money and likely eat healthier, too.  

Meal prepping in advance is a great way to ensure you have healthy, cost-effective options ready to go. Try to plan your meals around sale items or use up ingredients you already have in your pantry. Also, buying in bulk or shopping at discount stores like Lidl or Aldi can offer significant savings on groceries. 

5. Find Cheaper Alternatives 

When it comes to recurring expenses, there are often more affordable alternatives to what you're currently paying. Here are a few examples: 

• Insurance: Shop around for better rates on car, health, or renters' insurance. Annual premiums are often cheaper than paying monthly, and some providers offer discounts for bundling policies. 

• Phone Plans: Consider switching to a more affordable cell phone provider or plan, especially if you're not using all the features or data. 

• Streaming Services: Rather than subscribing to multiple streaming platforms, consider sharing accounts with family members (where allowed) or choosing one service at a time. There are also deals available for a bundle subscription for multiple services at a discounted price.

6. Avoid Impulse Buying 

Impulsive purchases can quickly derail your budget. This means, no grocery shopping when hungry! When grocery shopping, make a list and stick to it. Another way to avoid this habit is to practice the 24-hour rule: if you see something you want, wait 24 hours before buying it. This gives you time to evaluate whether you truly need the item or if it's just a passing desire. 

7. Take Advantage of Discounts and Rewards 

Look for ways to save on purchases through discounts, cashback offers, and reward programs. Many grocery stores in the Netherlands regularly have sales (2+2 or half off for example). At Albert Heijn you can only make use of the discounts if you have a bonus card. You can get it for free at a store or download the app for a digital card. 

8. Start your pension early

Many young professionals make the mistake of thinking they can delay building their pension, and that there is time to catch up later. However, starting early allows small contributions to grow exponentially through compound interest, making it easier to accumulate substantial retirement savings. You might think your temporary stay in the Netherlands makes pension savings irrelevant, but even short stays can extend unexpectedly, and early contributions will benefit your long-term financial security. Additionally, the 2023 Dutch pension reform offers more flexible retirement savings options, including private pension plans that complement employer schemes. To maximize tax benefits, contributions must be made by the end of the year.  

9. Set Financial Goals and Track Progress 

Setting specific, measurable financial goals can help keep you motivated. Whether you’re saving for an emergency fund, a down payment on a house, or a vacation, having a clear target makes saving more purposeful. Break your larger goal into smaller milestones and celebrate when you hit each one. 

Regularly track your progress, adjusting your savings rate as needed to stay on track. This will give you a sense of accomplishment and keep you motivated to continue your savings journey. 

While these changes might not be ideal long-term, they can provide immediate financial relief and help you build up your savings. 

Saving money doesn’t have to be a complex or overwhelming process. By following a few strategies and building habits, you can start to see significant improvements in your financial situation. Whether it’s creating a budget, cutting back on unnecessary spending, or prioritizing savings, every small change you make can lead to long-term financial security. Start today, and watch your savings grow over time! If you want to learn more about this topic or seek personal advice, consider contacting our partner YourFinancials.