This post may contain affiliate links. See our Privacy Policy and Disclosure Page for more information.

Sharing is caring!

how to start saving money



How to Start Saving Money

It definitely is not always easy to figure out how to start saving money. For many people, saving money just does not come naturally.

A recent study found that 78 percent of Americans live paycheck to paycheck. Another study found that 40 percent of Americans could not cover even a $400 emergency expense. And more than 60 percent of Americans could not cover a $1,000 unplanned expense. These are scary statistics! When you don’t have any savings, when you don’t have any buffer between your family and the bad things that happen in life, that can be a frightening place to be. I know; we have been there too!

And on the flip side, when you figure out how to start saving money, and then you actually do start saving money! :), you can really begin to do some awesome things. You can build financial security. You can ensure your children don’t have the burden of student loan debt. You can know you will retire with comfort. You can ultimately achieve financial freedom!

No matter what your current financial situation, the steps below will help you to know how to start saving money so that you can go from where you are to where you want to be.


Tip: Save the image above to Pinterest so that you can easily refer to these tips on how to save money later!



9 Best Tips for How to Start Saving Money

 Here are 9 important steps you can take that will help you to start saving money today!


1. Figure out your why for wanting to save money.

Why. That one little word is incredibly powerful. Understanding your financial why may be your most powerful tool for getting you to save money, and that’s why we’re talking about it first.

The reason it is so important is that in order to change old habits and start new, better habits, we’ve got to have a very strong motivation—and that motivation, for many people, is their why. To learn more about the power of why, I highly recommend the book Start with Why, by Simon Sinek. It is (and all of his books are) an excellent read.

In order to be effective, your why has to be powerful—more powerful than your urge to buy stuff or do things that you can’t really afford—or better put, that jeopardize your long-term financial stability or goals. Maybe your why is to have financial security, have one parent be able to stay home with your children, be financially independent early on in life, live in comfort (or luxury) in retirement, be able to give very generously to worthy causes, be an awesome example of managing money well to your kids, or be able to retire early to travel, volunteer, or spend time with your children and grandchildren.

For me, my financial whys are very strong motivators. One of my current financial goals is to be able to get this blog to the point where it can replace my full-time income so that I can be home all day with our three little cherubs. Even though I love my current job, being able to be home with our children is something I want even more, and so I’m willing (very willing, really) to make sacrifices (of sleep, mostly, and “me” time) to make that hope and dream a reality. And then they aren’t really sacrifices at all—they’re just choices I have made that I am very happy to live with.

When your motivators are strong enough, you will choose to get control of your money and start saving. And I’m here to help you every step of the way.



2. Set financial goals that will inspire you to save your money.

What are you big financial goals and dreams? What is it that you could do with your money that just makes you giddy when you think about it? Whatever those things are, make a plan, and work toward reaching them.

If some of the goals you initially thought of aren’t getting out of debt, building an emergency fund, and investing for retirement, then add these goals to the list. Those are the financial pillars that will allow you to attain long-lasting financial stability and success.


3. Differentiate (honestly) between needs and wants.

If you are painfully honest with yourself, you’ll likely recognize that much of your spending is for things that you want but not that you truly need. You probably already have a closet full of clothes, a car that can get you around for many years to come, and gadgets and toys and home furnishings that make your home or apartment burst at the seams.

So the reality is that you could probably go a long time without needing to buy anything at all besides food and gas for your car and very basic things like that. To break yourself of mindless, needless, or even reckless spending, do a no-spend challenge for a couple of weeks or a month. The savings can be dramatic, and the change to your mind-set monumental. Or if that seems too extreme, start with a no-spend week. Learn more about how to do a no-spend challenge.

For more information about differentiating between needs and wants, read this article.

4. Reduce your spending.

You can probably reduce your spending in almost every area, if you become very intentional with your money. There are so many ways to reduce your spending, in fact, that I’m not going to list them here because it’s enough great content to be an article all on its own (and now I have written it; check out these 150+ easy ways that you can save money!). For a great list of ways that you can start spending less money in different areas, read this article with more than 20 ideas on how to reduce your spending in various budget categories.

But here are just a few ideas to get you started:


Check out these related articles:


5. Increase your income.

Even though I strongly feel that reducing your spending is the most important part of the money-problem-solving equation (because you can always outspend your income, no matter how high it gets), increasing your income is a great way to turn your finances around more quickly and has a higher potential impact. Overall, you have a lot more control over how much you earn than how much you spend. There is only so far you can realistically cut your spending, but the amount of money you can earn is nearly limitless. (That’s one of the reasons that being a blogger and writer and business owner is so exciting!)

In rare cases, the problem truly is a lower than sustainable income. If that is the situation you are in, then know that you’re not stuck. You can start taking small steps to increase your income so that in two or five or ten years your financial situation is drastically different than it is today.

You may need to get a second job temporarily. If only one spouse is working in your household, the other might want to get a night job or work-from-home job to help make ends meet and help reach your financial goals. Longer term, you’re probably going to want to look at training or education and career moves that can help boost your income.

If you do not have a college degree, it may make sense to sacrifice to get one. Though a college degree is not a guarantee of a high-paying job, statistically you are likely to make more money, and sometimes significantly more, by earning a degree. Just be smart about it and earn a degree where you gain an actual marketable, high-demand, well-paying skill.

Here are some simple ideas for things you can do to make more money starting today:

  • Work overtime. If you have the opportunity to do so, working overtime is a great way to help you to save money quickly.
  • Ask for a raise or promotion. If it’s been a few years since you received a significant raise and you’ve been an exceptional employee at work, make a list of your contributions and your accomplishments, and schedule a meeting with your boss to request a raise or a promotion. Focus on ways that you’ve earned the company money or saved them money. If you learn that a raise or promotion isn’t going to happen right away, ask what specific steps you can take in the next year or two to make it a reality. Read this article for more information on how to seek a raise or promotion.
  • Do freelance work. If you work in a field that lends itself to doing freelance work, take advantage of that opportunity to earn extra income to help you save money fast! I have been doing freelance writing and editing since before I graduated from college with my English degree and editing minor, and doing freelance work has not only helped me gain experience in other areas besides what I do for my full-time job but has also at times (when I wanted to give the time to it) brought in significant additional income.
  • Do coaching or consulting. Similarly, if you have job experience or a skill that lends itself to coaching or consulting, put that skill to use! Popular areas for consulting include human resource (HR) consultant, public relations (PR) consultant, marketing consultant, business management consultant, and accounting consultant. Popular areas for coaching include financial coaching, job coaching, personal fitness coaching, and leadership coaching. Look for opportunities on indeed.com or your favorite job website.
  • Get a (second) job. If one spouse is available to get a second job in the evenings or on Saturday, for example, then this is another great potential way to earn additional income. And if you are a one-income family, or if one of you works only part-time, you might want to consider reentering the workforce or going full-time temporarily in order to save money more quickly.
  • Start a side hustle. If you would rather earn money without working another regular job, there are a lot of things you can do to earn a little extra income with a side hustle. Some ideas include starting your own small business where you turn a hobby into a money-maker, being a virtual assistant, or driving for Uber or Lyft. Learn how to start a side hustle and find out about many side hustles that you can explore.
  • Start a money-making blog. The potential for significant income is one of the reasons that I started this blog. If you love helping people and enjoy writing, being a blogger might be a great fit for you. In addition to great income potential (check out these amazing income reports of bloggers who make $10,000 to $100,000 or more per month!), there are many other benefits of being a blogger, such as being able to be your own boss and work on your own schedule. Learn how to start a blog for less than $5 a month.
  • Earn passive income. Some options for earning passive income are to create a product you have someone sell, write a book, create a money-making podcast or vlog, develop an online course, or participate in affiliate marketing. Read this article to learn more ideas for earning passive income.
  • Use rebate apps like Ibotta and Ebates. With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service. Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores. Because of this, you can actually sign up for and use both apps to save on purchases. Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.
  • Sell stuff on eBay or Amazon. If you have a good eye for a bargain, you can buy items at thrift stores or garage sales and sell them for a profit on eBayAmazonCraigslist, or your local online classifieds.
  • Sell your clothes to consignment shops. If you’re like most people, you probably have more clothes than you need. So use them to bring in some quick cash!
  • Have a garage sale. Declutter and earn money, all at the same time!

Learn more here about the many ways that you can increase your income.


6. Create and commit to follow a budget or spending plan.

To help you start saving money, you need to follow a budget. I know you might cringe when you hear the word, either because of past difficulties with budgeting or because of negative feelings you might associate with the word that have kept you from budgeting in the past. But a budget, or spending plan, is just a list of monthly goals for your money. It is where you decide what you want to spend for each area of your finances.

As you create your first budget and then work to tweak it, don’t shoot for perfection and don’t be too hard on yourself. It will take a few months for you to get most of the kinks worked out and for you to start really budgeting effectively. But after about three or four months, when you do get the hang of it, chances are that you will feel like you got a raise, even before you start adjusting your budget in order to spend less and save more. Find steps for creating your first budget here.


Check out these related articles:



When you are new to budgeting, you will probably want to estimate a little high for the different budget categories at the beginning, just to give yourself some wiggle room. We’ll talking briefly about ways to find more money in your budget in the next few sections of this article.

Check out these related articles:


7. Work to get out of debt to help you be able to start saving money.

It’s also important for your financial well-being that you get out of debt. Having a big pile of debt is awful. It’s scary. It causes gut-wrenching fear and sleepless night. Having so much debt that you don’t know how or if you can pay it off is a horrible place to be. I’ve been there. But I got out—my husband and I completely changed our financial situation and our financial future. And so can you! If a ton of debt is where you are today, it is definitely not where you have to be down the road. You can get yourself out of the mess you’ve created—and I want to help you do it.

When you pay off your debt, as Dave Ramsey says, you free up your most powerful wealth-building tool: your income. When you don’t have to pay all of your money to everybody else, you can use it to accomplish some really amazing things!

You can use it to purchase a car with cash, save for retirement, save for your children’s college, go on guilt-free vacations and travel, give generously to causes you really care about, and become rich (really—the old-fashioned way!) and achieve financial freedom.

No matter how much debt you have, whether a little or a lot, get rid of it, and free yourself from captivity. Read this article to learn a simple, step-by-step process for how to get (and stay!) out of debt.



8. Automate your savings plan.

One of the best things you can do to help ensure that you consistently work toward and reach your financial goals is to automate your finances in such a way that it helps you succeed. One of my all-time favorite financial books is The Automatic Millionaire, by David Bach. If you want to win at money, you need to take willpower out of the equation as much as possible and replace it with a system that won’t allow you to fail.

So, let’s say, for example, that for now you have four main savings goals that you want to work on: you want to pay off your credit card debt, build up a three-month emergency fund, start saving for retirement, and start saving to purchase a five-year-old car in a couple of years. This is how you could go about doing that:

Set up direct deposit. First, set up direct deposit with your employer if you possibly can and if you don’t already have it set up (for convenience, but more important, so that you won’t spend money right from your paycheck that would have been better off going to something else more important).

Then, set up an automatic transfer from your main checking account into a separate savings account that will be used for your emergency fund. Transfer as much money as you can each paycheck into this EF savings account until you have at least $1,000 but up to one months’ worth of expenses in this account.

A great way to do this, if your bank doesn’t offer the option of having multiple savings accounts linked to your checking account, is to open a savings account (and then more savings accounts, as you are ready to use them) with an online bank like Capital One 360. We currently have over 10 different savings accounts for our various savings goals, and I love knowing that I won’t accidentally spend the savings for one item or category on something else.

In order to build up your initial emergency fund as quickly as possible, see if you can sell anything around the house or in the garage that you don’t need. And look into ways to earn extra income.

Then after you have a small initial emergency fund in place, work toward paying off all of your credit card debt, and get that paid off as quickly as you can, as well. If you haven’t gotten a second job or side hustle before this time, consider getting one now so you can get out of debt sooner. To begin paying off your debt, automatically transfer the money that was going into your emergency fund (once you have at least $1,000 in that account) toward paying off your debts. There are a couple of ways you can do this: attack your highest-interest debts first (avalanche method) or your smallest debts first (snowball method). You can do whichever will help you to best stay motivated, but my recommendation would be to attack your debts smallest to largest because of the quick wins that you get and the extra motivation that gives to stay focused and keep working on getting out of debt. As you work to pay off all of your debts, reexamine your spending, and see if there are places where you can cut your spending in order to get out of debt sooner. Here are more than 20 ideas of how you can reduce your spending in various areas.

Then once you have paid off all of your debts, start transferring more money into your emergency fund, until it has at least three to six months’ worth of expenses in it. To save more money toward your emergency fund, transfer all of the money that you were using to pay off your debt to fully fund your emergency fund. Try to do this a quickly as you can—in three to six months. Consider taking on a side hustle or doing overtime, or find other ways of earning extra income, if you haven’t yet. And then you can begin investing for retirement, saving toward your children’s college, and saving (to pay cash!) for large purchases such as a newer vehicle, awesome family vacation, new furniture, and more.

Once you have a fully funded emergency fund, start saving money in your 401(k) at work (or Roth IRA or other retirement account available to you), or increase your contributions, to at least 10 percent (and up to 15 percent) of your income. Here, again, set up automatic electronic transfers so that the money will leave your paycheck before it has the chance to get spent. Once you have invested enough to receive the full match from your employer in your Roth or traditional 401(k), invest the rest of the money allotted for retirement savings, until you reach 10 or 15 percent of your income, in a Roth IRA (because you likely have a lot more options available to you through a brokerage firm that offers Roth IRAs than you do through your company retirement plan—which means your potential for higher rate of return is likely better). For more information on investing for retirement, read this article.

Finally, at the same time as you are working to increase your retirement account contributions (or sooner, if you can fit it into your budget), start saving for larger purchases and expenses. Begin automatically transferring money each month into a savings account for that used car that you want to buy in a few years to replace the one that you are currently driving. If you can save $200 a month toward the car that you want to purchase in two years, then you would have about $5,000 to go toward that newer car, plus the amount that you can sell your current car for at that time—let’s say that that was also $5,000. So that would give you $10,000 to buy the five-year-old car with—for cash! So you would transfer automatically each month that $200 into a savings account, and allow the money to grow for the next couple of years.

And that is how you automate saving, paying off debt, and investing in order to gain financial stability and build wealth.

For more information on automating your finances, read this article.


9. Shift your mind-set to think long-term.

If you only ever think about the short-term—what you want to do with your money today or this week or this weekend or this month or even this year—you will always be broke.

In order to build wealth so that you can live your financial dreams, you’ve got to think long term. If you don’t always want to have a car payment and if you ever want to pay off your mortgage, you’ve got to think long-term. If you want to get out of credit card debt—for good!—you’ve got to think long-term.

If you want to actually plan how to start saving money toward your children’s college educations instead of just thinking that you know you should, you’ve got to think long-term. If you want to have a nice (or even amazing—it really is possible and probably isn’t nearly as hard as you think) retirement, you’ve got to think long-term.

That probably means giving up some things that you may want now for things that are even more important for a bright financial future. One of my favorite quotes could be applied to personal finance: “Don’t give up the things you want most for the things you want now.” In other words, don’t let eating out, buying a new fancy car, purchasing a too-expensive home, buying too many gadgets, and so on rob you of a secure and awesome future. It’s just not worth it!



Figuring out how to start saving money isn’t always easy. I know that it’s difficult to reverse habits and to make lasting change. It’s a lot easier (at least, in the short term) to buy that new pair of boots or another handbag or a motorcycle than it is to say no. It’s easier to take the kids to Wendy’s for dinner or order pizza than it is to stick to your meal plan. But saving for your worthwhile financial goals is an essential part of your overall financial success because it allows you to get and stay out of debt and build wealth.

I know it is hard, but you can do it! And I will help. 🙂


What are your best tips for how to start saving money? Which of the tips listed above do you think will be most helpful to you to help you start saving money? Leave a comment below and let me know your thoughts!

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!

Join Our Facebook Group!

Join our closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.