Feeling overwhelmed by your finances?
You can get control of your money and start building a secure financial future with just a few simple steps. From creating a budget to cutting back on everyday expenses, learn how to save money’ and start building your financial security.
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Take Stock Of Your Finances
Before we jump straight into the tips, I first want to go over how to look at your total financial picture and why it’s important to get yourself on a budget.
The first step to reducing spending is to take a thorough inventory of your finances. The best way I’ve found to do this is to print off about six months’ worth of bank statements to go through.
I’ll use highlighters to mark expenses into different categories. For example, I’ll highlight all eating out pink, all groceries green, etc. I’ll then go back and add up each category for each month.
This will give me an idea of what I spend for that category during a month.
Having a general idea of how much money you’re bringing in and how much you are spending will really open your eyes to your behavior with money. Plus, it’ll help you get started creating a realistic budget.
Make A Budget and Stick To It
Making a budget and sticking to it is one of the most important steps to take when trying to save money.
Budgeting isn’t scary or restrictive – it’s simply creating a plan for what you’re going to do with your money. A budget ensures that your expenses don’t exceed your income and helps you keep track of how much you are spending.
Of course, sticking to it is much easier said than done!
Sit down and create a budget that includes all sources of income and list all your expenses, including utilities, groceries, rent payments, insurance, debt repayments, etc.
Calculate exactly how much money you have left over each month for everyday expenses like eating out, shopping, or entertainment.
I put these expenses into categories (groceries, pet supplies, gas, spending money, etc.) to make it easier to track my spending later on. It also helps me keep my spending at reasonable levels.
When creating a budget, be sure to include a section for savings each month. Creating this habit can help ensure that you are able to save money for unexpected costs or times when your regular income may be reduced.
Make sure to review and adjust your budget every month to make sure it fits your goals and lifestyle.
>> READ MORE: HOW TO CREATE YOUR FIRST BUDGET <<
Now that you’ve gotten an idea of where you really stand with your finances and created a first draft of a budget to work with, let’s go over my list of the seven best ways to save money.
1. Cut Unnecessary Expenses
My first tip is to get rid of all your unnecessary expenses. By this, I mean take a look at your spending habits and find all those small charges that add up but that don’t provide much value to your life.
Make cuts where it makes the most sense for you – like cutting out subscriptions that you’re barely using, purchasing less expensive coffee, restricting eating out to once a week, or watching movies at home instead of going to the theater.
You will be surprised at how much money you can save by taking small steps like this!
The easiest way to do this is to watch your bank account during the month. When a charge comes through for that Hulu account you haven’t watched in six months go log in and cancel your subscription.
If you buy coffee every morning start adding up how much that’s costing you each week. Small amounts of savings add up over time and do make a difference!
2. Track Your Spending
A great way to reduce spending is by tracking your expenses.
This will give you a better idea of where the money goes and will help you identify areas where you can cut back on your spending.
Track every dollar that goes out using a spending tracker or excel spreadsheet. You can divide the expenses into the same categories you used in your budget.
I like to track my spending for things like groceries, pet supplies, gas for my car, and my personal spending money since these are the categories where I’m most likely to get off track or have impulse spending.
If you’ve never tracked your spending before, it’s very eye-opening to know where exactly your hard-earned dollars are going! Doing this for the first time was the motivation I need to really get myself on a budget.
>> GET YOUR COPY OF THE COMPLETE BUDGET BINDER HERE!<<
3. Use Cash Instead of Debit Cards
This method definitely isn’t for everyone, but many people have had huge success with switching to an entirely cash-based budget method.
This method is based on the psychology around using cash over swiping plastic. You are going to want to spend less when you have to actually hand over cash instead of just putting your plastic away at the end of a transaction.
I’m not going to go into a ton of detail here, but the basic idea of this method is replacing all your cards for spending with cash.
Most people still pay bills online, but all other spending – groceries, eating out, shopping, etc. – is all done with cash. Once you run out of cash, you have to stop spending because the money is gone!
If you want to learn more about how to switch to an all-cash budget, check out this article done by the Dave Ramsey team about the cash envelope method he made popular.
4. Automate Your Savings
This is actually my favorite tip – it helped me actually spend money without dipping into it later! I think this is one of the best ways to save money that I honestly don’t hear people mentioning enough.
Automating your savings is an effective way to make sure you’re always saving money and ensuring that it goes into a separate account for emergencies, sinking funds, investments, or other important financial goals.
Set up recurring deposits into a savings account each month, so the money is automatically taken out of your main bank account and moved to your savings one. If your employer lets you set up multiple bank accounts for direct deposit, you can set that up as well (which is what I do).
This will help ensure you are always putting away something from each paycheck to help build up your financial future.
At the beginning of this year I had a new direct deposit line set up at work to the checking account that is linked to my sinking funds (I’ll talk about organizing your accounts in a second).
I don’t even have to think about this – it just happens automatically whenever I get a paycheck.
This helps me save money because I don’t have to depend on myself to transfer the money. There’s no chance of me deciding to use that money for something else when I never even see it hit my spending account.
5. Organize Your Bank Accounts
Yes, you can organize your bank accounts!
Have you ever fallen into the trap where you look at your checking account and think, well there’s money in there so there’s money for me to spend?
I used to do this all the time in the months I got a bit off track with my budget (which happens to everyone at some point!)
It shouldn’t have taken me so long to change things! I currently have 4 bank accounts at my primary bank and seven CapitalOne 360 accounts.
I have one bank account with its own debit card that I use for spending money and a separate account where my paychecks hit and where my bills are auto-paid.
No more “well there’s money in there so I must be able to use it!”
I set my accounts up like this:
- Bills checking – the majority of my paycheck hits here and all my bills are auto-paid from here.
- Spending checking – I transfer the budgeted amount for categories like gas, groceries, personal spending, and pet supplies to this account. It has its own debit card and it’s the only one I use for spending.
- Savings – I have a general savings account at my primary bank that I use for my emergency fund money because it’s easy to transfer to my spending account (sometimes too easy…).
- CaptialOne Checking – has its own debit card to use for sinking fund spending.
- 6 CapitalOne Savings – high-interest savings accounts that I use to save for things like Christmas, property taxes, car maintenance, vet costs, and travel.
6. Order Groceries Online
Groceries can be one of the largest expenses each month for most people, so I wanted to be sure to include a tip on how to save money on groceries.
I started ordering my groceries as a convenience (because I hate grocery shopping) but it turned into a major way I save money on my food costs.
I’ve found there are two benefits to ordering groceries online that end up helping you reduce your spending.
First, ordering online keeps you away from impulse buying. We all know not to go to the grocery store hungry, but I don’t think it matters if I’m hungry or not – if I see something that sounds good I’m tempted to buy it!
When you order online, you can just stick to your shopping list and only order the things you need. Some stores even store your frequently purchased items, so you can work right from that list and avoid browsing for snacks.
Ordering online also ensures you are sticking to your budget. You can see the price of your entire order before you finish checking out.
Instead of having to add things up as you go when you’re in-store, you can just see your running cart total as you go down your shopping list.
This has helped me so much because I can remove any extras or things we can wait another week on to ensure I’m sticking to my budgeted amount.
7. Delete Social Media and Shopping Apps
Ok, stick with me here. This is another tip on how to save money that’s not going to be for everyone.
But I’ve found a ton of benefits in my own life from deleting some of these apps from my phone.
It comes down to understanding your own behavior around how you spend money.
I found that I was doing a lot of impulse buying online while I watched YouTube videos or scrolled Instagram. This is because I would follow people who I wanted to be like and when they had certain things I wanted those items too.
Comparison on social media is a real problem.
The next time you’re getting ready to buy something, think about how you got to that checkout page.
Was it because you had a bad day so you’re scrolling Amazon to find something to make you feel better? Is it something you’re buying because your favorite influencer uses it?
If you can figure out what is triggering your buying behavior, you can remove those online shopping or social apps from your phone to make it much harder to go down a buying rabbit hole.
(At the time of writing this, I’m in the middle of a month-long spending ban and have committed to a month of no social media… this tip totally works! So far I’ve only found one thing I really want to buy, and I’m having no problem waiting until my no-spend is over.)
I hope you’ve found these tips on how to save money’ helpful and have found at least a few ways to implement these strategies into your life. Are there any tips you have that you didn’t see here?
What steps are you going to take to find ways to save money in your own life? Drop me a comment
Learn More About How To Save Money:
- 10 To Help You Avoid Impulse Spending
- The Budgeting Method That Changed My Life
- 10 Expenses To Cut From Your Budget
- 7 Tips On How To Save Money On Groceries