According to data released by the Treasury Department this week, the U.S. government’s gross national debt reached a record $38 trillion — just two months after hitting $37 trillion — marking the fastest accumulation of $1 trillion in debt outside the COVID-19 pandemic. The milestone comes as the government grapples with an ongoing federal shutdown. And at the current pace, experts warn the total could climb to $39 trillion within a matter of months.

While the national debt may be hard to conceptualize, economists say its explosive growth has the potential to have major impacts on the economy that will be felt even by individuals.

“I liken it to a boa constrictor squeezing its prey — the debt is slowly doing the same to the American economy,” said Brett Loper, executive vice president of policy at the Peter G. Peterson Foundation, which commissioned a number of recent reports on the national debt. “The squeeze comes in the form of slower growth, less job creation, higher costs of borrowing for consumers buying homes, or businesses investing in equipment. All of these are consequences.”

Learn more: 2025 housing market: Is it a good time to buy a house?

The total debt has nearly tripled in the last 20 years, from $12.26 trillion in 2004 to $35.46 trillion in 2024, per data from the U.S. Treasury. A slow and steady rise began in the 1980s and was accelerated by the 2008 financial crisis and Great Recession after a period of relative stagnation post-World War II. At the same time, the debt-to-GDP ratio, comparing the size of the debt to the U.S. gross domestic product, has continued to grow, first reaching 100% in 2013 and up to 123% last year. The ratio had not ticked above 100% since right after World War II.

The total amount the U.S. government is spending on interest has also continued to make up a bigger percentage of overall expenditures, from 8% in fiscal year 2019 to 13% in FY 2024, per numbers from the U.S. Government Accountability Office. In 2024, net interest was the third-largest federal spending category, at $881.7 billion, after Social Security and other federal healthcare.

To put it in simple terms, the U.S. national debt is the difference between the amount of money the federal government is bringing in through taxes and other revenue versus the total amount of budgeted federal spending, in addition to deficits from previous years, said Steven Kyle, associate professor of applied economics and management at Cornell University.

Part of the increase in recent years is attributable to the COVID-19 pandemic, which ushered in a variety of special spending, as well as the regular drivers, including entitlement programs like Medicaid and Medicare, defense spending, and high interest on the debt itself, said University of Pennsylvania Wharton School professor of finance Itamar Drechsler. Increasing costs to maintain Medicare and Social Security, due to an aging population and the rising price of healthcare, have also helped drive up the national debt.

While much has been made about the debt-to-GDP ratio in recent years, Kyle notes that there's no exact percentage that indicates instability. Japan’s ratio, for example, was at almost 250% in 2023, yet that nation is not considered to be in an insecure economic position.

“There is no magic level for that number that means a crisis,” Kyle said. “... The problem we’re having right now is that people are doubting that the economic managers of the United States are serious people and that they’re actually trying to address this.”

What is clear, according to Kyle, is that one way to address an increase in government spending would be a boost in revenue through higher taxes. But in this current political atmosphere, that almost certainly won’t happen.

“On the revenue side, one where you are not allowed to utter the word tax, we have not been getting the revenue we need to cover the gap,” Kyle said. “And, therefore, we’ve been accumulating national debt in good times and bad.”

While what Kyle calls the “huge borrowing spree” of the pandemic was largely “unavoidable,” the last few years could have been used to right the financial ship.

The national debt is projected to top $52 trillion by 2035, according to the Congressional Budget Office — an estimate reached before Trump’s tax cuts were enacted

Using a 2055 scenario in which the debt-to-GDP ratio is at 156%, the Peterson Foundation published an analysis which found that the current path of debt could reduce the size of the economy by $340 billion in 2035, shrink the number of U.S. jobs by 1.2 million, and bring wages down by 0.6% relative to having an unchanged national debt.

A 2025 Yale Budget Lab report showed that a permanent deficit increase of 1% of GDP would lead, after five years, to consumers paying $60 more in annual auto loan interest, $600 more in annual mortgage interest, and about $1,000 more for small business loan interest. The general tone of a continually rising national debt and debt-to-GDP ratio is some level of doom.

“What happens when everybody gets nervous?” Kyle said. “Consumers don’t buy things, investors don’t invest in new productivity capacity because they don’t know what their profit margin is going to be next year. We get a recession, and that can affect people.”

Read more: How to recession-proof your money

Here are some other specific ways individuals could be impacted by rising national debt.

According to the Peterson analysis, the number of U.S. jobs could decrease by as much as 1.2 million in 2035 and 2.7 million in 2055 based on the projected trajectory of the national debt compared to if it were to stay at its current level.

This could also lead to a decrease in wages as high as 3% by 2055. Essentially, a rising federal debt means the opposite of wage growth.

One of the simplest ways to reduce the national debt is by increasing government revenue, and that is largely done through higher tax rates.

“Unless we have miraculous growth, that tax rate will have to rise on people,” Drechsler said. “... But it’s becoming increasingly toxic to ever talk about raising them, so in this political climate, I’m not sure it’s going to happen anytime soon.”

Whenever economists talk about economic growth, or a lack thereof, interest rates are generally the metric that follows. Higher interest rates determine who can buy property and cars and invest in a business.

Learn more: When will mortgage rates go down?

“If [government debt] gets bigger and bigger, interest rates are going to be going up, because deficits are a direct stimulus to the economy. If they run huge budget deficits, then the Federal Reserve will raise interest rates to keep inflation in check,” Kyle said. “There’s only a certain amount of money looking for a home to be invested in and if the federal government soaks up ever more of it, consumers will feel that.”

The Yale Budget Lab found that after 30 years with a 1%-of-GDP permanent increase in the federal deficit annual car loan interest would increase by $200 and annual mortgage interest on the median home by $2,300.

Increased inflation is also a likely facet of a U.S. economy with an increasing national debt. The same Yale Budget Lab study noted that a deficit increase of 1% of GDP would raise inflation to the degree that, after five years, a household would lose $300 to $1,250 in purchasing power in 2024 dollars.

Read more: What is inflation, and how does it affect you?

In a recent survey, the Peter G. Peterson Foundation asked about the news that Moody’s had downgraded the United States’ credit rating. Eighty percent of survey voters, including 80% of Republican voters, said that the rating downgrade made addressing the national debt a more urgent priority.

To Kyle, the big question is whether the United States might at some point default on its debt. That could signal an international debt crisis — for us and for future generations.

“People don’t seem to realize that if we go ahead and break that debt ceiling, that means we’re defaulting on our debt. We’re not paying the interest on the debt,” he said. “That would be an international catastrophe for which there is no precedent for a major reserve currency of the world. We don’t know exactly what would happen, but it won’t be good.”

Do you count down the days until payday — only to watch your bank account drain within hours? You’re not alone. Millions of Americans live paycheck to paycheck, trapped in a cycle of stress and zero financial wiggle room.

Here’s a closer look at how the paycheck-to-paycheck cycle starts, and how you can put an end to it.

Living paycheck to paycheck means that your income is just enough to cover your basic living expenses — such as rent or mortgage, utilities, groceries, transportation, and minimum debt payments — with little or no money left over for saving, investing, or discretionary spending.

When you only have enough money to cover your day-to-day expenses, building long-term wealth becomes more challenging. It can also lead to a great deal of mental strife when you feel like you’re barely making ends meet.

According to the Bank of America Institute, around a quarter of all households are currently living paycheck to paycheck. And this situation isn’t limited to those with low incomes. Anyone can fall into the paycheck-to-paycheck trap if their expenses are too high compared to their earnings.

If you find that your paycheck doesn’t last between paydays, here are a few common reasons why that may be the case:

Your income doesn’t match your expenses: If your income isn’t keeping up with higher costs for everyday goods and services, you might find it increasingly difficult to cover your groceries, housing, and other recurring bills.

You’ve fallen victim to lifestyle inflation: This is when your spending increases along with your income. Getting a raise or a new, higher-paying job can be exciting and give you a financial boost, but earning more income can also tempt you to spend more and splurge on items you don’t really need.

You have expensive debt payments: The more debt you have, the more money you put toward interest charges and monthly payments instead of your daily expenses and savings goals.

The first step in breaking that cycle is understanding why it’s happening. Once you can pinpoint where your paycheck is going, it’s time to get your financial house in order.

Budgeting helps you see where your money is coming from and where it’s going. By having a budget in place, you can create a plan for every dollar you earn and identify areas where you may be overspending.

So, if you haven’t set up a budget, now is the time to do so. You can create a budget from scratch using Excel, or if you’d like some help, sign up for a budgeting app that can connect all of your financial accounts and automatically categorize transactions.

Once your budget is in place, review your spending to find out if you’re paying too much for certain services. If so, spend some time negotiating rates with service providers, canceling the memberships and subscriptions you rarely use, and reigning in your discretionary spending.

"Paying yourself first" means you prioritize saving a portion of your income before you spend money on anything else, like bills, groceries, or entertainment.

If you suspect the reason you’re living paycheck to paycheck is because you’re an overspender or give into impulse purchases, try incorporating this strategy. Each payday immediately set aside a portion of your income into your savings account. Then tackle your bills. Any money left over is yours to spend on entertainment, shopping, or any other non-essentials.

Read more: How much of your paycheck should you save?

When an unexpected expense comes your way and money is tight, you may resort to putting it on a credit card or taking out a new loan to cover it. The trouble is that it results in a new monthly payment, continuing the paycheck-to-paycheck cycle.

So, as you contribute to your savings account, set a goal to save up three to six months’ worth of expenses. Then, if a surprise expense comes up, you can dip into your savings instead of taking on more debt. Bonus points if you put those funds in a high-yield savings account, which helps your money earn more money.

If you have debt, especially high-interest debt like credit cards or payday loans, a good portion of your income is going toward interest charges and fees. Eliminating that debt will free up more money to put toward important expenses and savings.

You don’t have to pay off your debts overnight, though. Focus on making extra payments toward the debt with the highest interest rate first. Once you’ve paid it off, you can focus your efforts on the next-highest-rate debt, and so on. With consistency and patience, you’ll get rid of your debt and have more money to spend on the things that are most important to you.

Read more: How to pay off credit card debt when your budget's tight

It’s easier said than done, but the most effective way to get out of the paycheck-to-paycheck cycle is to earn a bigger paycheck. Maybe it’s a good time to negotiate your current salary and make a case for a raise at work, or look into switching to a higher-paying role.

You could also add a second stream of income by taking on a part-time job or side hustle — even a few hours a week can make a big impact on your cash flow.

Inflation is a term that refers to prolonged price increases. Put simply, inflation is the reason why your dollar doesn't go as far as it used to in the past. As prices rise, you get less for your money.

For example, in March 2020, the average price of a dozen eggs was $1.53. Today, it’s $5.90.

You can calculate the inflation rate for a specific product or service with a simple formula:

[(Current Price-Original Price) / Original Price] x 100

For example, to measure the inflation rate for a gallon of milk, you'd enter the following:

[($5.90-$1.53) / $1.53] x 100

[$4.37 / $1.53] x 100

2.86 x 100 = 286

As you can see, the price of a dozen eggs has increased by about 286% over five years.

When inflation rates are high, it gets harder to afford everyday essentials. Unless your pay has increased along with inflation, your salary won't go as far, and you'll have to trim your budget or take on another job to afford your lifestyle.

The Federal Reserve, the central bank of the U.S., is responsible for measuring inflation and creating policies to regulate the economy. It doesn't look at a single product or category; it calculates inflation by looking at market indices that track the price changes of some of the most common goods and services to gauge inflation.

One of the most commonly used indices is the Consumer Price Index (CPI) for all Urban Consumers — an index that tracks expenses such as food, gas, housing, utilities, and transportation. The CPI tracks price changes over a specific period; price changes over 12-month periods are usually what experts refer to when discussing inflation.

For instance, the inflation rate was 2.8% in February 2025. That means the CPI shows prices have increased 2.8% since February 2024.

There are many factors that contribute to inflation, but economists tend to focus on two main ones: demand-pull inflation and cost-push inflation.

Demand-pull inflation occurs when there is widespread demand for goods and services, and that demand outpaces the supply or what the economy can produce. When companies can't keep up with the demand, prices skyrocket, driving inflation.

Demand-pull inflation was evident during the COVID-19 pandemic. With some workplaces shut down and international shipments paused or delayed, the supply of certain items, such as cars and electronics, was down. As a result, prices increased rapidly, driving the record inflation rates we saw in 2020 through 2022.

With cost-push inflation, the cost of producing goods and services causes businesses to raise prices. This can occur if labor costs increase or if it becomes more difficult to import necessary raw supplies. When these price increases occur across several industries, it can cause widespread inflation.

Some level of inflation is normal and even necessary for the economy to thrive. However, when inflation rates get too high, it can erode the value of your money, and you may find it more difficult to get by on your current income.

With less disposable income, you may have to reduce your retirement contributions or put off putting extra money toward your student loans. And, as money gets tighter, you may have to make changes to your spending or lifestyle to make ends meet.

For example, let's say you earned $40,000 at your job in 2020. To maintain the same buying power in 2025, you'd have to earn $49,340. If your job hasn’t raised your pay to that level, it will be harder to cover your bills even though your salary hasn't actually decreased. (You can use the U.S. Bureau of Labor Statistics' inflation calculator to see how the value of your income has changed over time.)

To address inflation, the Fed can increase the federal funds rate. Rate hikes can be beneficial to your savings account since banks will typically raise their rates alongside the Fed. However, it makes borrowing money much more expensive, so it may cost you more to take out a mortgage or car loan.

Read more: How does inflation impact savings and CD rates?

Inflation is unavoidable and it fluctuates over time. However, there are some steps you can take to protect your finances when the inflation rate is high:

Open a high-yield savings account (HYSA): One of the best ways to beat inflation is to stash your savings in a high-yield savings account. Right now, there are banks and credit unions offering rates over 4.00% APY — significantly higher than the national average. (Check out our ranking of the 10 best high-yield savings accounts today.)

Pay down debt: If you're carrying a balance on a credit card or have a high-interest loan, one of the easiest ways to better your finances is to pay down debt. Paying off the highest-interest debt first will help you save money and get out of debt faster, freeing up cash for other goals.

Trim your spending: When money is tight and inflation is up, keeping track of where your money goes is key. Trimming any unnecessary purchases can help free up money and give you more breathing room in your budget.

Invest in the stock market: Although seeing the market fluctuate can be nerve-racking, investing is critical to outpacing inflation and growing your money. In fact, Vanguard found that an all-stock portfolio would average 10% in annual returns over the long term.

Saving money takes time and discipline — and it can be a challenge if you face competing financial obligations or unexpected costs. Your ability to save can also be impacted by external factors, including the rising cost of living and high interest rates on debt.

As of June 2025, the personal saving rate was 4.5%, up from 4.3% the previous year. Still, with many Americans continuing to bear the brunt of inflation and higher costs, saving money could prove to be more challenging than it was just a few years ago.

The good news: There are ways to reevaluate your current spending habits and cut costs to put more money more toward your savings account.

The most recent Consumer Expenditure Survey from the Bureau of Labor Statistics found that spending on groceries was up by 6.1% year over year in 2023 (the most recent data available). Americans spend an average of $6,053 each year on food at home — slightly over $500 monthly.

Of course, you have to eat, so you can’t completely eliminate this big monthly expense. That said, there are certainly ways to save money on groceries.

Make a list before you shop: It can be easy to get lost in the colorful aisles of a grocery store and throw unnecessary snacks into your cart. Before you go shopping, take stock of what’s already in your refrigerator or pantry and make a list of your must-buy items. That way, you don’t buy duplicates or spend on groceries you don’t really need.

Shop generic: Name-brand products tend to come with higher prices. An easy way to cut grocery costs is to shop the supermarket’s brand of items. Chances are, the ingredients are pretty similar. And generic foods typically cost 20% to 40% less than their name-brand counterparts, which can really add up with each shopping trip.

Buy in bulk: This may not make sense if you’re grocery shopping for one. But if you have a larger family, buying items in bulk can help you save big. However, be sure to calculate the price-per-unit (that’s the total cost divided by the number of units) and ensure it’s less than the cost-per-unit when purchasing a smaller quantity. You’ll also want to consider the item’s shelf life and ensure your family can eat through your supply before it goes bad.

Consider a rewards credit card: There are several rewards credit cards that offer cash back and bonuses for purchases made at supermarkets, as well as retailers, restaurants, gas stations, and more. Using a rewards credit card for groceries you need to buy anyway can help you shave down the cost further. Just be sure you charge only what you can afford to repay at the end of the billing cycle. Otherwise, interest charges will wipe away those rewards — and then some.

The average monthly rent is $1,637 per month for a one-bedroom apartment, according to Apartments.com. However, there are several states where residents contend with even higher prices, especially those living in bustling metropolitan cities.

For example, the average monthly rent is $4,027 in New York, $2,557in Massachusetts, and $2,200 in California.

Read more: This map compares the cost of living in every state

High rental costs can not only strain your budget but also make it more difficult to save and invest for the future. Here are a few ways you could lower your monthly rent:

Sign a longer lease: When a landlord has to spend time searching for a new tenant, they miss out on rental income. And with each new tenant, there’s a risk that they won’t stick to their payments. Standard leases tend to be about 12 months long, but signing a longer lease could entice them to lower your monthly rent in exchange for the guaranteed rental income for a longer period of time.

Negotiate with your landlord: Having an honest conversation with your landlord can go a long way in negotiating your rent, especially if you have a proven track record of on-time payments and a stable income. It doesn’t hurt to ask.

Get a roommate: If your monthly rent payment is too much for your budget to handle, getting a roommate can significantly reduce the financial burden. Just be sure to consult your landlord before taking on a roommate to ensure that it doesn’t violate the terms of your rental agreement.

Consider a new location: Real estate is all about location, location, location. If your monthly rent is too high, moving to a more affordable neighborhood could help you trim your monthly rent. Take some time to explore other communities and see if the price difference could justify a new address. Moving could help you save further if you relocate to an area with low sales taxes or a state with no income taxes.

According to the National Association of Realtors (NAR), the median mortgage payment rose to $2,291 in 2024, up from $2,032 the previous year. For many Americans, their monthly mortgage payment comprises a significant portion of their monthly expenses. Here’s how to save money on a mortgage:

Buy down your mortgage rate: When taking out a mortgage, consider “buying down” your mortgage rate by paying more money up-front at closing. You’ll need to crunch the numbers to ensure this saves you money in the long run. For example, if you plan to sell your home in a few years, you may not come out ahead. But reducing the interest rate on your forever home by even 1% could save you thousands of dollars over time.

Make an extra payment each year: Splitting your monthly mortgage payment in half and making a bi-weekly payment, rather than one monthly payment, will result in one extra payment each year. By doing this, you’ll build equity and reduce your principal balance more quickly, lowering the total amount of interest you pay on your loan over time.

Refinance your mortgage: Refinancing involves replacing your existing home loan with a new mortgage for the same property but with new terms. If you can secure a lower interest rate, you’ll enjoy a lower monthly payment and long-term interest savings. Again, it’s important to do the math and ensure any closing costs or a longer repayment period don’t cancel out those savings.

Utility costs can creep up unexpectedly if you’re not monitoring your usage, especially when temperatures reach extremes during the summer and winter months. However, you can keep your energy costs low with a few smart moves:

Lower your usage: Taking shorter showers, using warm or cold water, and unplugging electronics when you’re not using them are just a few ways to reduce your energy consumption and, in turn, lower your monthly utility bill.

Repair leaks: Leaky pipes result in using more water, while cracks in your windows or door frame can require more energy to keep your home the right temperature. Taking the time to seal off any leaks and better insulate your home will help reduce your bills.

Invest in energy-efficient appliances: Making this swap not only reduces your carbon footprint, but also has a direct impact on your energy bills. These appliances may involve a higher upfront cost, but typically require less energy and resources to run, which is good news for your wallet long-term. Plus, you may qualify for rebates and tax incentives when purchasing Energy Star products.

Car payments, insurance, fuel costs, and repairs can add up. The American Automobile Association estimates that the total cost to own and operate a new vehicle was $12,297 per year, or $1,024.71 a month, as of 2024. That’s up from the previous year, when the average annual cost was $12,182, or $1,015 per month.

Making a few changes to your daily habits can help you reduce your transportation costs and put more money toward your savings account each month.

Opt for an alternative mode of transportation: Walking, biking, skateboarding, and rollerblading are all more affordable ways to get around. For short trips around town, leave your car at home and try a fuel-free alternative. You’ll not only save money but maybe even enjoy some health benefits.

Take public transportation: If you live in an area with reliable public transportation options, take advantage of your local bus or subway. Your employer may even offer a stipend or discount to subsidize your commuter costs.

Carpool: Consider creating a carpool group with friends or coworkers and split the cost of fuel if you’re all headed in the same direction.

Look into a used car: Driving around in a new car is certainly a nice experience, but it’s typically not the most financially sound option. A new car loses approximately 10% of its value as soon as you drive it off the lot, and depreciates another 20-30% within the first year, on average. Meanwhile, used cars are around $20,000 dollars cheaper than a new car, on average, even for newer vehicles in good condition. So if you absolutely need a personal vehicle to get around, a used car can be a good compromise.

Look for fuel savings through apps: There are several apps such as GasBuddy and Waze that can point you in the direction of the most affordable fuel near you.

Insurance provides a financial safety net in the event of a car accident, natural disaster, medical emergency, and more. Depending on the number of assets you’re paying to insure and their value, monthly premiums can add up. A few easy ways to save include:

Bundle insurance policies: Many insurance providers offer savings for customers who bundle insurance policies. For example, say you need auto and home insurance — purchasing policies from the same company could get you a discount.

Ask your insurance provider if you qualify for any discounts: Insurance providers often reward customers who pose the least amount of risk. For example, maintaining a clean driving record with no accidents could help you qualify for a good driver discount from your auto insurance provider. Ask your insurance company about the specific discounts they offer to see if you can trim your bill that way.

Shop around and consider different insurance providers: Insurance companies typically offer free quotes online. So do some research and request quotes from several providers to compare rates and choose the best coverage and rate. This is something you can do every couple of years to evaluate your current policies, not just when shopping for a new one.

The average cost of college in the United States is $38,270 per student per year, including books, supplies, and daily living expenses, according to the most recent figures from the Education Data Initiative (EDI). And the data shows college costs have more than doubled in the 21st century. Fortunately, there are ways to keep these costs down:

Apply for scholarships: There are thousands of scholarships available each year, and they’re not all based on financial need or academic performance. There’s probably a scholarship (or several) based on your unique situation and background. So spend time researching and applying for scholarships offered by the college you’re attending, local organizations, national foundations, and private entities to save money on college.

Consider a public university or community college rather than a private institution: Private college costs are significantly higher than public college at $58,628 per year for tuition and on-campus living expenses, according to the EDI. Opting for a public university or community college can shave thousands of dollars off your total bill.

Commute if you attend a university close enough to home: Commuting to a university involves its own set of costs, but it doesn’t compare to the cost of on-campus housing at a four-year college or university. If you live close enough to your university, consider living at home or renting a cheaper apartment off-campus and commuting to school.

Take advantage of student discounts: One of the major perks of being a college student is the long list of discounts you may qualify for from major retailers, restaurants, streaming platforms, tech providers, and more.

Look into funded opportunities: Teaching assistant (TA) and residential assistant (RA) roles tend to come with large amounts of funding, often covering full tuition and/or housing expenses. While these roles are often not available to first-year students, most public and private universities have these roles available for students to apply starting their sophomore year of college.

Read more: The 10 best banks for college students in 2025

Traveling can be a fulfilling way to spend your time and make new memories. However, depending on your desired destination, paying for a vacation can kill your budget. This doesn’t mean you have to put your goal of traveling on the back burner. There are plenty of ways to make your travel plans more affordable:

Use a travel credit card: Travel credit cards can offer discounts on hotel stays, airfare, luggage fees, travel insurance, rental cars, and more. Some may even grant you access to airport lounges that offer their own set of freebies while you wait to board your flight. Choose a card that rewards you for your regular spending and helps you earn cash back, points, or miles that can later be put toward your travel costs. Keep in mind, however, that the more perks a card comes with, the higher the annual fee may be. And carrying a balance results in interest charges that cancel out those savings and rewards. So choose your card and spend wisely.

Travel in the off-season: Airfare and hotel rates can skyrocket during peak travel times, such as during the summer months and surrounding major holidays. An easy way to save money on travel is to have flexible travel dates and be open to traveling during the off-season.

Book travel in advance: Last-minute travel deals exist, but if you’re hoping to plan a trip that fits neatly into your budget, it may not be wise to wait until the last minute to book your flight or hotel. As soon as you’ve decided to take a trip, you can sign up for alerts from your preferred hotels and airlines to be notified when there’s a sale or when fares are lower than usual. Giving yourself a decent lead time can help you secure the best rate and factor your travel costs into your monthly budget.

Research transportation options: Decide in advance if it will be most cost-effective and convenient to use public transportation, rent a vehicle, rely on rideshare, or even walk. And know how far your planned destinations are from one another to maximize efficiency in your daily itinerary. For example, that five-minute Uber ride from a coffee shop to a museum could be a 20-minute walk, allowing you to save money and do more sightseeing along the way. Or, if there’s a bus stop near your hotel, consider taking advantage of public transportation to get to major landmarks.

Make eating out count: There’s no need to spend money at a restaurant for every meal of the day, even if cuisine is an important part of your travel. If your lodging includes a kitchen, consider cooking one or two meals a day with groceries from a local store and stocking up on snacks instead of continuously eating out. If you are staying in a hotel room with only a refrigerator and microwave available, keep easy breakfast options available such as fruit, granola bars, cereal and milk, and rolls/pastries, as well as snacks, to avoid eating out multiple times a day. Even you decide you must eat out more than once a day, try to split up your time between fast food/casual dining and nicer restaurants to avoid racking up spending on food.

It’s estimated that raising a child through age 17 costs more than $300,000. From basic necessities such as healthcare, food, and education to miscellaneous expenses such as dance classes and birthday parties, there are many reasons why having kids is expensive.

If you’re thinking about starting a family or already have kids, here are some ways to cut costs:

Buy secondhand: Children outgrow their clothing quickly and are more likely to have spills and dirty their clothes. Instead of buying brand-new clothing, check out your local thrift store or consignment shop. Chances are, these items will be more reasonably priced than something off the rack.

Take advantage of free activities in your area: Following community pages on social media and signing up for emails from your local libraries and museums can help you keep tabs on what’s happening in your area and find free events and activities for your kids.

Stay on top of preventative care: Scheduling regular check-ups and vaccinations will prevent more serious and costly health issues down the road. If your child needs medication, ask for generic versions, which are often cheaper than brand names. And if your employer offers a Flexible Spending Account (FSA), you can use pre-tax income to pay for qualifying medical expenses.

Invest in your child’s future early: As soon as possible, open up a savings account for your child. Putting away even $50 a month, starting from birth until their 18th birthday, would leave them with over $10,000 to put toward their education, first car, or apartment.

Buying yourself a new pair of shoes or splurging on a pampering session can be a nice way to treat yourself — and it doesn’t have to impact your ability to save. You can still treat yourself on a budget with these tips:

Join store loyalty programs: If you’re a frequent shopper at a particular store, ask if they have any loyalty programs. You may earn freebies or discounts just by sticking with certain retailers or brands.

Sign up for emails: Many retailers have email lists they use to make customers aware of upcoming — and often exclusive — promotions. You may also be able to sign up for text alerts to find out about sales and receive coupons.

Install browser extensions: Browser extensions such as Honey and Rakuten do the heavy lifting for you. These tools automatically find and apply coupons at checkout when you shop online. They also offer cash back at certain retailers, further reducing the total cost.

Take a minimalist approach (when applicable): While we all deserve to treat ourselves, it is important to be pragmatic when shopping. Take inventory of things you have in your home before you go shopping to make sure you are not buying duplicate items. Also, ask yourself what you will use the item for and how often you will use it before committing. And finally, ask yourself if the item is something you can comfortably afford, or, if it is something that is truly important to you, is the hit your finances could take worth it to you?

Read more: 5 psychological money hacks to cut spending and increase savings

Tax time can be stressful, especially if you think you will owe money in April. The good news is there are several ways to cut down your tax liability:

Max out retirement contributions: Increasing contributions to your 401(k), IRA, or other retirement plan lowers your taxable income. In 2025, the contribution limit for a 401(k) is $23,500; if you’re 50 or older, you can set aside an additional $7,500 per year. Your employer may also offer matching contributions, which is free money that doesn’t count toward your annual maximum. So even if you don’t max out your contributions, be sure to contribute enough to receive your full match.

Put money in a health savings account (HSA): Contributions to a health savings account are also tax-deductible and help lower your overall taxable income. Plus, the money can be used to pay for qualified medical expenses. And unlike an FSA, any money you have left over at the end of the year rolls over to the next.

Look for deductions and credits: Unless you’re a tax expert, you probably aren’t aware of all the tax write-offs available to you. According to TurboTax, some of the most commonly overlooked deductions and credits include state sales taxes, student loan interest, moving expenses, and the child tax credit. Fortunately, there are tax software programs that can help you identify possible write-offs. When in doubt, though, it can be worth paying a tax professional to complete your return so you don’t miss anything.

Between food, toys, training, and other supplies, the cost of caring for your pet can add up. According to a 2024 MetLife survey, the average pet owner spends $4,800 on their pet each year. These extra expenses can certainly put a dent in your budget, but there are ways to keep those costs down.

Adopt: Rather than buying a pet from a store or breeder, consider adopting. For one, it’s much less expensive; adopting a cat from a shelter costs around $30 to $300, while dogs can be adopted for anywhere from $100 to $700. Meanwhile, buying a cat or dog from a pet store or breeder can cost several thousand dollars, depending on the breed.

Get pet insurance: Pet insurance can help limit the costs of medical care for your pet, including checkups and medication. According to the North American Pet Health Insurance Association, the average cost of a pet insurance premium is between $9 and $62 per month, depending on the type of animal and coverage that you have. That could end up being worth it if your pet needs emergency surgery or treatment for a major medical issue.

Buy pet supplies in bulk: If your pet typically eats the same food and snacks, or you use certain care products on a regular basis, buying those items in bulk can help you save more on each individual item in the long run.

Learn to groom your own pet: Pet grooming can be expensive, especially if you have a dog or cat that requires regular visits. Learning to perform basic grooming tasks — like nail trims and baths — can save you a trip to the groomers and cut down on your pet-related expenses (though you may still want to visit a professional for haircuts, dematting, and other more involved services).

Entertainment costs may be the first line item to go if you’re looking for ways to cut budget costs. However, just because you’re looking to save doesn’t mean you have to sacrifice all of your discretionary spending.

Cut the cord: If you still pay for cable, consider swapping it for a streaming service instead. For a flat monthly fee, you can have access to a large library of content that you may be able to download for offline viewing, too.

Bundle your streaming services: Subscribing to multiple streaming platforms can be just as expensive as a premium cable package. So, look for bundling opportunities (like Hulu's Disney+ and Max bundle) or prioritize one or two platforms that offer your must-see shows and movies.

Join rewards or membership programs: Movie theaters, performance centers, and other entertainment venues may offer rewards or membership programs to help you save. For a monthly fee, you could gain access to discounted tickets and concessions, special events, and more.

Go to local community events: Supporting the local arts is a great way to enjoy a fun night out without having to spend tons of money. Instead of waiting to spend $100 or more for the next big name, why not spend $20-$30 to check out a local act at a smaller venue or $10 to support a local DJ? If you’re a fan of visual art, scope out galleries and markets in your local area rather than buying museum passes regularly. If you’re a movie buff, see if your city hosts any free movie in the park events or discounted screenings of older films.

Shopping for gifts for family birthdays and the holiday season adds up. As of 2025, the average American spends around $1,000 to $1,200 annually on gifts, with around $900 of that centered around the holiday season. For parents, the average spend for a child’s birthday is about $300. And then there’s the other costs associated with celebrations — like prepping for a large holiday meal, buying decorations, and indulging in festive activities, which can quickly drain your bank account. Here are some ways to scale back on your celebratory spending:

Buy secondhand: One easy way to save money on gifts and decor is to buy secondhand, either from thrift stores or from your family, friends, or neighbors. While buying secondhand doesn’t work for every product, things like books, certain clothing items and furnishings, and even electronics can still be a treasured gift if you make sure to inspect its condition. For decorations, especially for popular holidays such as Halloween and Christmas, it’s pretty easy to find decor at thrift stores and garage sales.

Stick to DIY gifts and festivities: If you’re crafty, consider making your own gifts and getting into the festive spirit at home. For the fall season, carve your own jack-o'-lanterns. During wintertime, make homemade ornaments and cut out paper snowflakes. If you’re great at baking, make desserts with creative packaging. If you know how to crochet or knit, create a one-of-a-kind piece of apparel. Even a DIY card and care basket could be a thoughtful and much-appreciated gift if you put care into it.

Take advantage of coupons, deals, and rewards programs: If you do want to go the more traditional route of buying new gifts, there are still ways to save money while doing so. Pay attention to coupons and online ads at local stores year-round. Subscribe to membership rewards programs of stores you frequent often. If you have a credit card, take advantage of cash back rewards and points you earn at specific stores and retailers.

Growing your savings account balance takes time and careful planning, but with the right strategy, you can build up enough savings to cover all of your financial goals and long-term expenses.

Learn more: How to save $10,000 in a year.

As you put in the hard work to build your savings, here are some ways you can maximize those efforts:

If you don’t have a budget in place (or haven’t evaluated it in a while), you may be spending more than necessary. Streaming accounts you forgot you subscribed to, a few too many DoorDash orders, or a gym membership you no longer use are all extra expenses you could easily eliminate.

Review your budget and bank statements carefully to see if there are spending categories you could trim down to allocate more money toward your savings goals.

Learn more: 7 ways to save money on a tight budget

Automating transfers from your checking account to your savings account ensures you’re making regular contributions and your balance continues to grow over time. Plus, by setting-and-forgetting your savings contributions, you may not even notice the money has left your account in the first place.

Where you keep your savings is just as important as the amount you’re contributing. The national average interest rate for a savings account is only 0.38%, according to the FDIC. However, there are other options that can help your savings grow faster.

For example, consider putting your money in a high-yield savings account or certificate of deposit (CD), which may pay as much as 4% APY or more. You could be missing out on extra savings by not exploring high-yield account options.

Unexpected financial emergencies can throw your savings off track and result in debt. By creating an emergency fund, you won’t have to worry about a car repair or trip to the emergency room throwing your financial plan off course.

Read more: How much money should I have in an emergency savings account?

Paying off high-interest debt (such as credit cards) can free up room in your monthly budget to put more toward savings. In fact, eliminating debt that accumulates interest is essentially saving money, especially when your debt interest rates are much higher than your savings interest rates.

Using a debt repayment strategy such as the snowball or avalanche method can help you get the ball rolling and save money on interest over time.

Treating saving money like a game can help you stay motivated. Try a savings challenge such as the 52-week challenge or no-spend challenge to give your balance a boost.

Keeping track of transactions, categorizing expenses, and monitoring progress toward your goals can be a lot of work. Fortunately, there are plenty of money-saving apps that can do a lot of the heavy lifting for you. Signing up for one of these apps can help you be more strategic about saving and staying on track.

Read more: How to use AI to improve your finances