How to save money while living paycheck to paycheck
How to use savings buckets to achieve your lifestyle goals
9 easy ways to save money
Accelerate your savings by developing habits that help you save long-term without wrecking your day-to-day spending.
Whether you're saving for a short-term goal like buying a car or a more significant expense, such as a child's education, saving money can feel daunting. But it doesn't have to be. Even small changes can have a big impact on your savings goals, as long as you're consistent.
Let's explore nine simple ways to save money, so you can start seeing your savings account grow every month.
Key takeaways
Whether you're building an emergency fund or saving for specific purchases or investments, these simple strategies can help you reach your savings goals.
Start by creating an itemized budget, so you can see how you tend to spend money each month.
Simple actions like turning down the heat, cooking more, or switching to streaming services from cable can help save a lot of money over time.
1. Set a savings goal
Successful journeys begin with a clear destination in mind, so be sure to set a specific, achievable savings goal. It could be short-term, long-term, or more open-ended, but once you have a goal, you can start building a plan to reach it. Let's say you'd like to save $1,000 for a down payment on a car lease by this time next year. Divide 1,000 by 12: You need to save about $84 each month to reach that goal. With that number in mind, it's much easier to make sure you're saving towards that goal each month.
2. Create a budget
A budget helps you understand how you spend your money each month. One of the most popular budgeting methods is the 50/30/20 rule. With this strategy, you dedicate 50% of your income to needs, 30% to wants, and 20% to savings or debt. Take the time to review your last few months of spending to determine how you usually spend. Then, set a budget for how much you can spend on each category.
Diligently monitoring spending habits over the course of a week or month will often highlight areas where you can immediately cut costs.
3. Automate payments
Whether you have a specific savings goal or you just want to follow the 50/30/20 rule, automatic transfers can be a great tool to ensure you stay on track. If you're paid regularly around the same time of the month, set up an automatic transfer from your checking account to a savings account so you don't forget. It only takes $20/week to save $1,000/year, and technology can help you stay accountable.
4. Cut back on takeout
Brewing your own coffee, packing leftovers for lunch at the office and resisting the temptation of the takeout menu can help you save a lot each month. Reducing the amount you dine out may feel like a sacrifice, but you can still have fun with your food. Consider taking on more challenges in the kitchen or hosting friends for potlucks to help everybody cut down on food costs.
5. Buy in bulk
When shopping for food and household goods, a little planning goes a long way. Bulk purchases at wholesale clubs can get you the same products at a notable discount. If you're not already a member of a wholesale club like Costco or Sam's Club, consider shopping with a friend who is. Bulk shopping can feel unnecessary for one person, but if you're splitting some of the big items, it could make sense for both of you.
6. Conserve utilities
The dollars and cents saved from shutting off lights, taking shorter showers and keeping a careful eye on your thermostat can really add up-particularly in the summer and winter months. Most importantly, find a temperature that's comfortable and keep it there. Even small changes on the thermostat can drive up your bills — almost every energy system is much less expensive to run if you simply set it and forget it.
7. Cut the cord
Although cable and internet bundles can be cost-effective, they're still more expensive than streaming services. It's often more budget-friendly to piece together all of your entertainment needs through a few services rather than paying for cable.
8. Take public transport
Opting for the train or bus even once or twice a week can be great for your budget and the environment. If that's not practical given where you live, you might consider carpooling with friends or biking to work.
9. Free fun
Entertainment is important, but it can quickly put a dent in your budget if you're going out on the town every weekend. Fortunately, many towns and cities offer plenty of free fun. Check your community calendar for free events or make your own family fun at home!
Learn how to save smarter with our savings goal tracker.
FAQs about saving money
How much should I save each month?
A common goal is to set aside at least 20% of your income, but the right number depends on your budget and financial priorities. Even small, consistent contributions can add up over time.
Should I focus on paying off debt or saving first?
Both are important. Try to build a starter emergency fund of $500–$1,000 while making at least minimum payments on debt. After that, you can decide whether to prioritize faster debt repayment or growing your savings.
Where should I keep my emergency fund?
A separate savings account is usually the best option. It keeps your money accessible but separate from everyday spending.
Is it better to save in a checking account or a savings account?
Savings accounts are designed for storing money you don’t plan to spend right away. They typically offer interest, which helps your balance grow over time, while checking accounts are best for daily spending.
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