You will probably have a time in your life when you wonder how to start saving money every month.
What would you like to do with the extra money? What if you used it to pay off debts? Add it to your investments or savings account? You could use it to go on a vacation.
Saving more money each month is a great feeling.
Where do you begin? It can be daunting to think about “where” or “how”, but you don’t need to.
Here are some tips and tricks to help you save money every month and become more financially stable.
Table of Contents
How much should I save each month?
What you should do first
How to Save Money Monthly
Simple Ways to Save Each Month
You’re Struggling To Put Money Aside Every Month
Final Thoughts
How much should I save each month?
How much money should you set aside each month? Most financial experts and resources will suggest saving 20% of your monthly income. The more you save and invest, the better for your financial future and current finances.
Savings rates can vary depending on your income and expenses.
It is important that you consistently start saving and are ready to implement a plan to improve your results.
Are you ready to save $100 per month? What about $500 per month? Or $1,000+ per month? You can do it, but it will take time and commitment.
What you should do first
You may have read my previous posts and find that the following sounds like a broken tape. These simple pieces of advice are essential for any aspect of your personal finance.
You decide how you want to set up each item, what you do with it or how long you spend working on them. You can work on these items for as long as you want. They may change over time.
Before you begin looking for ways to reduce your monthly spending, consider these three steps.
Track expenses
It’s important to keep track of your finances in a simple way. A basic spreadsheet is all I need.
All my bills, my monthly pay, and my take-home pay are neatly arranged in columns. I like to arrange my monthly take home pay, all of my bills, etc. in nice columns.
It’s easy to forget things or get wrong numbers when you don’t write them down. You can easily forget or be wrong about numbers if you don’t write them down.
You may also want to monitor your investments and net worth via Personal Capital. Ensures your financial progress and expenses are on track. You can start using the platform for free here.
Realistic savings goals
You should also set yourself financial goals when you start to save money seriously. Also, make sure they are realistic.
You can certainly set challenging goals that you may not be able achieve, but you should also create ones with much more achievable levels. You can then work your way upwards.
These financial goals can be matched with your monthly saving objectives.
Paying yourself first
You can start saving money every month by adopting this mindset.
Here’s a brief overview of what I wrote about paying yourself first.
When you pay yourself first, you are putting your money first into savings or investments. This is done before you pay any bills or make any purchases.
Blooom’s free 401k analyzer will help you to save money on fees, and put more money into your investments.
Automating the process to be repeated is a simple way to pay yourself first. In the beginning, I did that. But now it’s more manual.
Automating is a good option if you’re too tempted to do so or if discipline is needed.
Saving Money Monthly
How to Save Money Monthly
You’ll want to look at your monthly expenses to see where you can cut back.
If you’re struggling to save cash, you might need to make some sacrifices.
Here, I have divided them into two sections. Let’s dive into where you can start cutting costs to get more money in your pocket each month.
Note: I wrote about money recently and why you shouldn’t feel guilty for purchases that enhance your life. This is only true for those who are already in control of their personal finances. If you’re interested, take a look.
The Big 3
These three items are usually the most expensive in your life. This is usually true for the majority of people.
What are they? What are they?
Groceries and food
According to the Bureau of Labor Statistics we spend over $7,700 annually on groceries and eating out. I wouldn’t be surprised if many people spend even more.
You can save the most money on food by reducing your eating out, cooking in bulk and freezing meals for a week, couponing and paying attention to sales.
You might find it difficult at first but once you get into a routine, your savings will grow.
Housing
Housing is the largest cost of all three. Location, home size, maintenance costs, and so on.
Assess your current living situation. Refinance your mortgage and downsize your home or apartment to save money. Do your research first and ensure it is a good idea.
If you don’t have the option of moving or selling, then look for ways to save money on your home maintenance. If you can, learn to do it yourself. Don’t try to do everything yourself. Some jobs may need a professional. A little bit of DIY each month can make a big difference.
Transport
There are also ways to cut costs on transportation. The cost of buying a new car and maintaining it can be astronomical.
If you’re looking to start saving monthly money, look for ways to reduce your transportation costs.
You could do anything, from getting a cheaper and reliable used car, to DIY car stuff, comparing different insurance options, driving less, or walking and biking.
Simple Ways to Save Each Month
Here are some additional ways you can save money every month.
Utility bills are important to monitor
You should always be aware of the actual bills you receive. You can save money by limiting your energy consumption. However, you should be on the lookout for unusual charges and spikes of costs from your energy provider.
Calling in to the company, catching errors, or switching companies if you feel they are refusing to work with your company if their bills have increased can help you save money. You could be losing out on savings if you do not actively review your monthly bills.
Cancel subscriptions that you do not need or use
It’s easy and you can save hundreds of dollars a year.
You don’t watch much cable? Sign up for Netflix or Youtube Premium. You don’t have to get all of them if you are looking to save money each month. But you do have other options to pay for cable and satellite.
I saved over $140 per month by cutting cable and my gym membership. (There is a gym within my apartment complex). It’s true that I won’t retire with that amount of money, but I can put it towards my investments or savings every month.
Become a good negotiator
Being a good negotiator is a great skill that you can learn to help with your finances. You can negotiate almost anything by simply speaking up and making your case.
It doesn’t mean you have to beg for a cheaper price. You can also ask for a lower price or explain why it should be.
My internet bill jumped by $20 per month in a flash. It might not seem like much, but it seemed absurd that the price would increase so much.
I called and asked them to explain their pricing, politely explaining why I thought it should be cheaper (I have been a lower-priced customer for many years). The company upgraded my internet speed free of charge, installed a new modem/router and returned my monthly cost to the original amount.
Trim is a money-saving application that you can use. Trim helps you negotiate cable, Internet, phone and medical bills as well as cancelling old subscriptions. Trim can help you save money.
Shop around for deals
It is important that you shop around and compare prices before making a purchase. You can save money on insurance, cell phone, home maintenance, etc.
Make a list of all the options and compare them before you spend your money. You may be able find a big saving, or even just a small amount that adds up over time.
You will need to be able to make the best use of your money.
Cashback on everyday purchases
You can’t live without buying anything.
You can earn cashback when you shop and use coupons.
It’s not saving money exactly, but you get some cash back after your purchases. Ibotta has partnered with over 300 brands and retailers. ).
It takes only a few moments to create an account. If you are interested, click here to learn more.
Consolidate your debt
You are likely paying high interest rates on your credit card debt. This can cost you a lot of money every month.
Consolidating debts into lower interest rates is an option that isn’t for everyone.
This is done by merging multiple bills into one debt, which is then paid back through a loan or a program of management. Learn more about this alternative here.
Save your pay increase
What pay raise? Amirite? Many people will get a raise. When you do, it’s a good idea to save that extra money each month. Asking for a raise is a good idea if you haven’t received one in ages.
We are tempted to upgrade our lifestyles if we receive a raise or spend more money.
If you wish to save more money each month, it is best to send the extra money immediately to your savings account or to investments. (Remember to pay yourself first.)
Bank accounts that pay good interest
You want your money to earn interest when you put it into a savings or checking account. Most big banks and credit unions don’t offer high interest rates (I am talking about less than 1%, or fractions thereof) on your money.
You can save money by putting your separate or emergency savings in a high-yielding savings account.
You’ll typically find anything between 2 and 3 percent, which may not sound like much, but it adds money to your savings every month as you grow your savings.
I would recommend checking out CIT Bank’s Savings Builder Program. I did a product review of CIT Bank, which covers all the options and how they work.
You’re Struggling To Put Money Aside Every Month
You might even be tempted to scoff after reading some of the above insights or leave a rude comment.
I can’t save any money, or even the recommended 20%. It all goes to debt and living expenses! It’s simple to save money every month if you don’t have kids, debt or a well-paying job.
You are absolutely right. Saving money isn’t easy for everyone.
Start small. Even if you only save 1% of your earnings, it’s a good start. Following some of the tips above will most likely free up enough money to save small amounts.
You might need to live a little more frugally to build your foundation.
As you reduce your expenses, pay off debt, and make more money, you will start to see your savings rate increase.
You may not be able jump from 1% up to 15% but you could go down to 5% and then work your way up. You can always cut back if you need to.
Stay focused on your goals and keep them in sight. This will help to motivate you.
Final Thoughts
To succeed, you must WANT to change to begin saving money each month. You must also be patient and have a long-term outlook.
You may lose interest in your routine if you don’t see results quickly.
In other posts I have mentioned that your mentality is a major roadblock to positive financial change. There are situations that you can’t control (like an unexpected job loss).
If you don’t have the motivation to make a plan and be patient, it will take a long time for your financial situation to improve.
You decide “how” and why you want to save each month. You’ll need to decide which expenses you want to cut and which you would like to keep to improve your quality of living.
