How to Save Money: 3 Easy Tips

Sometimes the hardest thing about saving money is just getting started.With a few tweaks to your spending, you’ll be on the fast track to saving money in no time.

Money Saving Tips

Tip #1: Establish your budget

On the first day of a new month, get a receipt for everything you purchase throughout the month. Stack the receipts into categories like restaurants, groceries, and personal care. At the end of the month you will be able to clearly see where your money is going. Additionally, your bank or credit union may have this as an online-banking feature. Your budget should outline how your expenses measure up to your income—so you can plan your spending and limit overspending. Be sure to factor in expenses that occur regularly but not every month, such as car maintenance. Seeing what you spend in total on food, shopping, etc. can be humbling!

Tip #2: Save automatically

Setting up automatic savings is the easiest and most effective way to save, and it puts extra cash out of sight and out of mind. Automatic savings means you have a process in place to save at regular intervals, whether that’s monthly, weekly, or daily.

Instruct your employer to direct a certain amount from your paycheck each pay period and transfer it to a retirement or savings account (or both). Traditionally, you can set this up using your employer’s direct deposit, ask your HR representative for more details and set this up today.

Tip: Splitting your direct deposit and setting up automated transfers are simple ways to save money since you don’t have to think about it, and it generally reduces the temptation to spend the money instead.

Tip #3: Start small. Think big.

It’s important to start with a short term goal in mind. The truth is, people save more successfully when they set a short-term goal. For instance, committing to saving $20 a week or a month for 6 months is much more attainable that setting a goal to save $500 a month for a year. Once you reach the short-term goal, you’ll have created a habit of saving you can be proud of! You’ll be able to keep going strong with a new goal. Here are some examples of short and long term goals.

Short term (1-3 years)

  • Vacation
  • Down payment for a car
  • Emergency fund (3-9 months of living expenses, just in case)

Long term (4+ years)

  • Down payment on a home
  • Your child’s education
  • Retirement

It all starts with a commitment to yourself to save. Following these 3 tips can get you ahead of the curve. It doesn’t matter if you’re saving for a rainy day or an emergency pops up, you will be at ease knowing you have the funds to cover it.