How To Save 500 A Month Effortlessly Without Any Sacrifices

“I don’t want to make sacrifices for saving money. I want to treat myself to certain things, and if I want to buy a bike, I go out and buy it.” a friend recently said. Can you save money without sacrifice? If you love spending?

In this post, I’ll tell you how you can save money easily and effortlessly without sacrificing your lifestyle. Without giving up what you like to spend your money on currently. Because you can save money while enjoying your current lifestyle. You truly can maintain your lifestyle while saving money. You just need to use some effortless savings tips and the best easy money-saving hacks for beginners so to say. This is how I started saving money. I can say first hand: it works!

I understand too well how big the challenge of saving money is for those who like to spend money because I have experienced it too. After getting my first well-paying job (which I worked for a decade), I just wanted to treat myself. Mainly because I couldn’t do that for so long. Before that, there was a time when I lived on 660 Euro a month (that’s when you need the help of others and extra hours of work to make ends meet).

What treating myself means to me

If you come from a place of not having enough money, you want to treat yourself with everything you could possibly think of the moment you have the money. At least that’s what I did. I spent hundreds at a restaurant (for a single meal). I drove one of the most expensive cars out there on the weekends (a big BMW). I bought clothes, shoes, cosmetics and traveled several times a year. Now, I knew how it is to have more than enough money. Check. But what’s next?

I realized this when I became a mother. Suddenly time became my greatest luxury. During the 8 months of my parental leave with my oldest one, I enjoyed taking control of my day. I still worked (on my projects that became this blog), but on my terms. I have never experienced so much freedom of time. I loved it. Also, I realized that I love work too much to ever stop. Working is an essential and important part of my day and I want to keep that for as long as I can. Anyone who knows me knows this. Even my youngest says “Mama work” when I tell her “Goodbye” on the weekends to work (when the grandparents take over the kids).

So I decided I want to get that time freedom as quickly as possible. Every day. I knew therefore I needed to end my dependence on my paycheck. For me today, pursuing financial freedom means treating myself. I enjoy saving my money and investing my money (in the stock market) to build my investments. I like to see my money grow into a small fortune. One day I want to live off my investments. This is also called passive income. It’s like money falling from a tree (to pay my bills) without having to work for it anymore (hence the name of this blog, TimeAndMoneyTree). This is the financial safety net I need to fully embrace entrepreneurship one day (which is my dream for early retirement).

What would you do if you could have your own “TimeAndMoneyTree”? What contribution would you make to society and your family? What would everyday life be like? The crazy thing for me is that this is actually within the reach of many more people than I thought possible. Especially if you earn an average to above-average salary. But you have to start somewhere with saving money. Now where do you start?

The 5 Concrete & Effortless Ways To Save 500 A Month Without Sacrificing

Automate Savings: 50 A Month

The fastest and easiest way to start saving money effortlessly is to set up automatic transfers. How much money can you save each month without feeling it? 10, 50, 100 or even 500 Euro? For most earning an average income that is around 50 a month. That is 50 Euro saved and invested. Whatever it is, create a “set it and forget it” savings system. Go to your bank account (now) and transfer the money directly to your savings account. Next, set up an automatic savings plan for each coming month. If you don’t have a savings account yet, open one. It literally takes 10 minutes. You can find 10 minutes today. But before you do that, please read the bonus tip in this blog post below.

Use A Savings App: 50 A Month

Some apps round up purchases to then automate those savings directly into an investment account. One of the most popular ones is Acorns. This app is rounding up each transaction to the nearest dollar (in the US). Then it invests your spare change directly into your investment portfolio. An equivalent service offers Trade Republic in Europe, but it’s a bank and not an app. More on this below in the bonus tip. As most people shop several times a week or even per day, rounding up each and every purchase can easily sum up into 50 a month. That is 50 Euro saved and invested. Up to now we already have saved and invested 100 a month without sacrificing our lifestyle.

Round Down Your Income & Save It

This savings strategy combines the previous two. Let’s say your take-home pay is 2.767 per month. Round it down to 2.700 and save the difference of 67 in your savings account. Or even to 2.600 and save 167 each month. Set up an automatic savings plan for each coming month. Do the same with your partner’s monthly salary to maximize your savings. Maybe you set the goal to save and invest 100 Euro a month. Up to now we already have saved and invested 200 a month without sacrificing our lifestyle.

Bonus tip to save more money: Start saving any extra income you make throughout the year in your savings account. Every dime that goes into your bank account in addition to your regular salary is an income. And it makes a difference if you treat it that way instead of thinking about how you’re going to spend the extra money.

Therefore, it helps to approach certain expenses with frugality. But, and this is a big but, without reducing the quality or joy you expect to get from certain spendings. I share my journey towards frugal living without compromise in the blog post The Ultimate Budget For FIRE: A Frugal Values-Based Budget. Here I talk about some of the budget-friendly and cost-effective strategies I use to get the same end result (cultivating family memories) for less (money).

Let’s say you and your partner receive 5.000 in additional income during the year in the form of salary bonuses, tax refunds, or even birthday gifts. Consider saving all (!) of the extra money, or at least most of it. This is a huge increase in your savings account and investment account over the course of the year. However, this requires money management and some discipline when it comes to your spending habits. But even if your and your partner’s bonuses (from your employer or from taxes) are only around 3.000 a year that is still 250 of saving and investing every month. Up to now we alredy have saved and invested 450 a month without sacrificing our lifestyle.

Engage In Employer-Sponsored Savings Plans

This was the place where I started saving and investing my money. Back then, I lived an expensive lifestyle. Still, I decided to put some money into an employer-sponsored retirement account. I can only emphasize how easy it is to contribute to an individual retirement account through payroll deductions. Email your HR department or talk to your colleagues about opening an employer-sponsored retirement account.

If your employer doesn’t offer such a program, there may be government-sponsored retirement programs you’re eligible for. After you’ve put the kids to bed, do some research online today to find out which one is best for you and take the first step toward opening one yourself. Whatever program you can take advantage of, set the goal to contribute at least 50 Euro a month. Now, you finally have saved and invested 500 a month without sacrificing our lifestyle.

Cash back Programs And Reward Programs

There are numerous of cashback and rewards programs. These are loyalty programs. You, the customer, get a small percentage of your spending back into your account in the form of cash (or equivalents). When we experimented with those like Payback (which is big in Europe/Germany) we realized that our rewards are tiny. We’ve got 100 Euro Payback after collecting 10.000 Payback points which took us almost 2 years and spendings in total of 20.000 Euro. But, as you don’t immediatly save and invest money through these kind of programs I do not count that as direct savings and investments for the purpose of this article.

Recently, I discovered a new creative way of cashback: Vivid. You get rewards for everyday spending on card purchases. But, your cashback is linked to the stock performance of a stock of your choice! So, when the company stock price goes up your rewards grow too. This way you can grow your cashback rewards when the stock performance is strong. And, you can redeem your rewards anytime. After all, you have nothing to lose as we talk about rewards anyway.

To us, the most worthwhile reward programs are offered by credit card companies. We take advantage of those ourselves with Amex (American Express). We explain how you can leverage your credit card rewards through loyalty programs from credit card companies (like Amex) in the blog post Travel Hacking For European Families: How To Travel For FREE.

In a nutshell: When you sign up for a new credit card, you first get a welcome bonus like 60.000 reward points if you spend 4.000 Euro in 3 months (your mortgage payments may already cover some of this). If you continue using your credit card you will continue to get reward points (or miles). You then redeem your points (or miles) into flights or hotel nights nearly-free. So you just transfer your collected points (or miles) to hotel or airline credit cards. But you must pay off your credit card balance in full at the end of the month. So you need a debt-free lifestyle. Also, it takes a bit of time to develop a system and a routine so that you can profit most from your collected rewards.

Bonus Tip: Don’t Just Save, Invest Your Money

Saving money has its limits. You know the saying “A dime saved is a dime earned”? That is very true because in some ways saving money is like earning money. If you don’t need to spend one dime you can afford to earn this dime less (or save it).

But simply saving money can actually make you poorer. That’s because of inflation. During the last years I’ve experienced a 7 % inflation rate myself. I once literaly screamed in a store “10 Euros for a bottle of olive oil? That’s insane!”. But that’s exactly what inflation does. It raises the prices of any goods. If you put your money in a piggy bank at home (or a regular bank account with no interest), you can use the money to buy less and less over time. What could you do now?

Even if you don’t want to invest your money into the stock market (as we do), you can open a daily money market account today and start earning interest. These are like normal bank accounts! But they offer (higher) interest rates. Unlike traditional bank accounts or savings accounts, they pay interest based on the account balance.

We invest a part of our money this way at Trade Republic. That money is our emergency fund. It earned 3-5% interest in 2023/24 in Germany for us. A nice side-effect at Trade Republic is that it offers rounding up each transaction to the nearest Euro. It then invests the change directly into the ETF or stock of our choice in our investment portfolio (also at Trade Republic).

If you would like to earn higher interest rates (> 5% interest in 2023/24 in Germany) without investing your money in the stock market, you can opt for a fixed-term savings account. This is also like a normal bank account. However, your money is locked for a fixed period such as 3, 6 or 12 months. Therefore, your bank account may be charged a higher interest rate. For us, this is currently not the case in Germany, as the interest rates are the same as on money market accounts.

Whatever is best for you, I hope this blog post encourages you to start implementing one or two strategies today. Even small changes can lead to significant savings over time without sacrificing joy. I’d like to encourage you to share this post with friends who love spending but want to start saving (more) money.

Further Resources

I love reading a good book (or blog post) in the evening when the kids fall asleep, the house is quiet and I’m in bed (as long as I didn’t fall asleep right next to the kids). How about you? If you want to further explore the topic of saving money without sacrificing it (or investing and earning it), I have some book and blog recommendations for you. Some recommend cost-cutting hacks like choosing quality vs. quantity or using discount deals, subscription savings and a lot more to save money without sacrificing.

1. It’s Not about the Money: A Proven Path to Building Wealth and Living the Rich Life You Deserve from Scarlett Cochran (onebighappylife.com) – I’ve been following their channels for some time
2. The Money Saving Mom’s Budget & Money-Making Mom: How Every Woman Can Earn More and Make a Difference from Crystal Paine for smart budgeting strategies (moneysavingmom.com)
3. liverichly.blog from Kathleen McDowell (a former Fortune 500 corporate executive)
4. onecentatatime.com from Sudipto Basu
5. Falling for Money: How to Have a Lifetime Love Affair with your Finances from Krisstina Wise being a real estate mogul under all (wealthywellthy.life)

When you walk away today with at least one new idea to improve your personal financial journey towards F.I.R.E., I’d love to show you some more in the next post. If you haven’t already, you can apply to become a part of the community to not miss any new release. For that you can subscribe to our Newsletter below in the green footer.

Now, I’d love to hear from you: what are the experiences you’ve made with saving money effortlessly in one way or another? I invite you to share your best tips and experiences for saving money without sacrificing your lifestyle. See you in the comments below.

Title image source: Christian Dubovan on Unsplash