6 changes I made this year that saved me hundreds of dollars

Spain mountainKathleen Elkins/Business InsiderYou learn a lot about money during your first year working in the ‘real world.’

Like most things in life, you learn through trial and error — through failing, making adjustments, and then failing again, until you find something that works.

My first full year working in the real world was littered with blunders — but with blunders come valuable lessons. And with valuable lessons come a wiser approach to your life, career, and finances.

After a year of trial and error, here are six of the most effective changes I made when it came to managing my money:

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I went cash-only.

What started as a two-week long personal challenge quickly evolved into a long-term lifestyle amendment -- 14 days of cash changed the way I'll spend forever.

I ditched my plastic cards for crisp cash this past July and haven't looked back. Each Sunday afternoon, I withdraw the amount of cash I've allocated for myself -- typically $125 -- and that's my spending money for the week. When that cash runs out, I'm out of funds until Sunday rolls around.

The strategy worked brilliantly for a number of reasons: I knew exactly how much I was spending each week, had a better idea of how quickly money can disappear, gave more thought to certain purchases, and enjoyed the overall convenience that comes with carrying cash.

The most eye-opening and rewarding takeaway was how much I actually saved, and how much I'm on track to save each month, simply by altering the way that I spend. The cash-only diet offers zero wiggle room, and just by sticking to my weekly allowance of $125, I will be saving about $50 a month, the average amount I tend to go over-budget due to unexpected purchases or lack of discipline when handling a debit and credit card -- that's $600 over the course of a year.

Eventually, as bigger purchases come around and my spending habits change, it will make more sense to bring back the plastic and earn credit card rewards -- but for now, when my expenses are the lowest they will ever be, I'll stick to cash.


I set up auto-increase for my 401(k) plan.

This took a maximum of five minutes, and while I may not see the financial benefits for a while, auto-increase will grow my savings significantly over the years.

Thanks to compound interest, you can accumulate a substantial nest egg over time, especially if you start saving early. The more you can put aside the better, which is why it's smart to get in the habit of upping your 401(k) contribution each year. Automate the increase so you don't forget about it or talk yourself out of contributing more. You'll never even see the money you contribute -- making it easier to live without -- and will reap the benefits later on.

Check online to see if your plan offers auto-increase. If it does, choose a percentage you want to increase your contributions by and how frequently you want it to increase. If you don't have this option, or are contributing towards different retirement plans without auto-increase, make a reminder note in your calendar every six months or year to up your savings rate.

I started thinking of money as something to invest.

Rather than thinking about money as something to spend, I started thinking about it is something to invest.

It's a very subtle, yet effective, mindset shift -- it means that any raise, bonus, or birthday check goes straight towards my Roth IRA, savings goals, or other investments. Not only am I not spending this money, but I'm putting it to work and allowing it to grow.

While it's difficult to quantify how much money I'll save thanks to this habit, it's bound to add up over time.

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