13 Ways to Save Money for a Better Future
In saving money, it turns out to be a challenge at first. But, that doesn’t mean it’s an impossible skill to learn. Once you learn how to save money, it gets addicting. You start to wonder how you can save in many different aspects of your life. You watch your savings accounts grow and then your savings enable you to pay off debt. Suddenly, after months and years of good savings habits, you find yourself with excess money that you can generously give to others and make the world a better place.
Of course, it’s important to realize everyone is different. Some people learn how to save money from a very young age. Other people watched their parents struggle and live paycheck to paycheck. I truly believe some people are born spenders and some are born savers, regardless of how they’re raised and what their overall life values are.
The key is to learn the basics of saving money first, which will help you organize your finances. Then, it’s time to do a deep look inward at how you view money emotionally. Once you realize your triggers and how your spending habits affect your life, you become more aware and more willing to make positive changes. Then, once that’s done, you can learn how to save strategically in just about every area of your life, from buying a car to lowering your electric bill.
All of this information is below, listed one step at a time. By the time you’re finished reading this, you’ll not only understand the mechanics of saving money, but you’ll have a strong understanding of why it’s important to you and how to get there.
Starting With The Basics In Saving Money
1. Know Your Exact Income and Expenses
Without a doubt, the best way to start saving money is to learn exactly how much money you have coming in and exactly how much money you have gone out. Now, you probably have a rough idea of what your income is or how much your paycheck has on it each time you get it. But, it’s time to look even closer.
What number exactly is hitting your paycheck each payday? Then, what number exactly is going out in bills and expenses? There are several ways you can track your expenses.
Use An App: Mint, YNAB, and EveryDollar are popular expense tracking apps.
Use a Pen and Paper: Go old school with a handy notebook and write down everything you spend.
Create an Excel Spreadsheet (Or Download one Online): Lots of people like using excel to see their progress over time.
Use Tiller: This is kind of a mix of an app and an excel spreadsheet. Tiller will collect your information and create spreadsheets for you.
2. Create a Budget Spreadsheet
Once you have a strong understanding of your income and expenses, it’s time to make a budget spreadsheet and apply the information you just gathered. For example, maybe you found out that you spend $500 more than you earn each month. With a budget, you can input your income and your expenses, scan the list, and find categories where you can cut back.
For example, you might see that you have a high cable bill or a high car insurance bill. Those are companies you can call and try to get your bills lowered to create more breathing room in a budget. Yet, you won’t know to even do this or attempt to save money until you see all the numbers in one place.
Lots of people tell me that they really don’t want to know the numbers, and I get it. It can be nauseating to think about how much money you spend every month unintentionally (I feel this way every month when I realize I’ve spent $1,000 on food…again.)
Yet, knowledge is power, and the more you know, the more you realize where your budget is weak, which will allow you to be the more aware day in and day out as you go about your regular spending.
3. Automate Whenever Possible
Younger generations are big fans of automation, and yet I find older generations are still skeptical about it. I personally pay every single bill I have automatically except for my daughter’s ballet class tuition (just waiting on her teacher to get on the automation bandwagon!) I also like to save automatically.
Human beings are emotional creatures and sometimes we know what’s best for us financially but we don’t do it. We know we should save some of every paycheck but then other things come up. When you learn more about automating you can ensure you save without having to think about it. That’s when saving money becomes relatively simple.
4. Daily, Weekly, and Monthly Check-Ins
When it comes to the basics of saving money, the last component is to check in with your money. It’s not enough to create a budget or automate your savings. You have to look at everything regularly. At first, that might mean daily tracking of your spending. Then, it might ween weekly tracking. Eventually, you might be able to check in once a month.
However, you do need to make sure you aren’t being charged twice for something, that all automatic bills really did get paid, and to check for fraud. This habit will help you catch any financial inaccuracy, which can definitely save you money in the long run.
Tactics and Issues for Saving Money
For many people, saving money can be a little… boring. So, in order to make things more interesting, you can take part in money-saving challenges or savings strategies that can make the process a little bit more fun and interesting. Below are some of my favorite strategies and challenges that can help you save money.
5. Use the Savings Bucket Strategy
Note: There is a savings bucket strategy and also a different retirement bucket strategy you can learn about when you start planning your retirement savings. In this section, I’m discussing a savings bucket strategy.
A savings bucket strategy is when you have multiple savings accounts or savings buckets so you can very clearly see your financial goals. I have anywhere from 3-6 savings buckets going on at one time.
This strategy works really well for goals because it encourages you not to dip into your savings. For example, I saved $10,000 during my pregnancy with my twins because I put money in a savings bucket labeled “Twins.” The name on the savings bucket ensured I didn’t dip into it for vacation or shopping for new shoes. When your savings bucket is for one specific thing, you’re more likely to keep contributing to it (and not withdrawing from it) until the bucket is full.
6. Do a No Spend Challenge
A no-spend challenge is where you decide to only spend money on essentials for a specific amount of time. So, people can have no spend days or no spend months if they’re taking part in this challenge. Some people like to use a calendar and put a big X on the days where they don’t spend any money. The idea is to bring awareness to the spending you do on little things.
7. Cash Only Challenge
There are many studies that show you spend less money when you use cash, not cards. So, having a cash-only challenge can help you save more of what you have. For this challenge, you can leave your automatic bills as they are, but take out cash for clothing, groceries, eating out, entertainment, and more and try to see if the cash envelopes encourage you to save more money.
8. Save Your Change Challenge
Once you start using more cash, you can then take part in a save your change challenge, where you collect all of your loose change to see how much you can save in a month or even a year. You can make it a competition with your family members or friends or perhaps agree that you’ll all go out to eat together using the change you’ve collected at the end of the year.
9. The Accountability Partner Strategy
Whether you’re single or married, one of the best ways to start saving money is by using the accountability partner strategy. This means you can pick one person to go along with you on this savings journey and who keeps you accountable for your goals. It can be a co-worker who agrees to bring a brown bag lunch with you and sit with you at lunchtime. It can be your spouse who agrees to monthly budget check-ins. It can be your mom or your sister who wants you to succeed. Regardless of who it is, a good accountability partner can mean the difference between you achieving your savings goals and you abandoning them.
The Emotional Part of Saving Money
10. Know Your “Why”
You can save money in many ways, like buying cheaper gas or only going to see matinee movies, but at the core of each money, a decision is a reason for why we want to save money, to begin with.
When you take the time to know your why you can save money much faster and easier. You can make quick decisions about saving money because your why is at the forefront of your brain. And, your reason why you want to save may change over time. For now, you may want to save money so you can get out of debt or get current on your bills. In the future, you might want to save money because you want to retire early or buy a vacation home.
Your why is important because it helps you make everyday decisions like whether or not to buy a raffle ticket at the fair or whether or not to buy a cup of coffee. When you have a reason for saving that’s bigger and more profound than daily wants, you’ll be more adept at making the right financial choices for you.
11. Assess Your Childhood Experience With Saving Money
If you want to dig deep and really understand your relationship with saving money, look back to your childhood. Some people grew up in families where they saved consistently but did so at the expense of enjoying everyday life. Other people grew up in families who didn’t save at all and struggled living paycheck to paycheck.
Whether or not your family actively talked about saving money, you absorbed money lessons from them. You saw how saving, or the lack thereof, affected your family growing up.
When you assess your childhood experience with saving money, you can better understand your own savings tendencies. You can decide to emulate your parents or you can decide to change a pattern. Either way, much like having a why understanding how your childhood affects your savings patterns is an important component to saving more money.
12. Identify Spending Triggers
Each and every one of us has a spending trigger. An easy example of a spending trigger is going to buy a pint of ice cream after a bad day. Another example is scrolling Instagram late at night and making a snap decision to buy shoes after seeing an influencer wear them.
In order to save more money, take note of the times you spend on things outside of your normal budget. Ask yourself what you’re feeling as you buy the item. Are you stressed? Happy? Trying to make your day better? Once you know the feeling behind your spending, you can be more aware of it and redirect it when the feeling bubbles up.
13. Set Big (But Achievable) Savings Goals
Most of the time, we sell ourselves short. We are afraid to make big savings goals because we don’t want to fail. However, goal setting is a great way to save money. It keeps you accountable.
Achievable goal setting is more than just thinking, “It would be nice if I could save $10,000 this year.” It’s about setting measurable and achievable goals and then breaking those goals down into smaller goals that you can tackle one by one. As you achieve smaller goals, you build momentum. You build faith in yourself. That’s how you accomplish bigger savings goals, so don’t be afraid to make some.