How to Save Money: Simple Steps to Overcoming Debt


In today’s age, finding out how to save money can be overwhelming.

“Money doesn’t buy happiness” is a famous saying, but another one is “Money makes the world spin.” The conclusion is that although your checking account balance is not the most important thing, it could make your life pleasant and comfortable or stressful.

Saving money is a rather important skill, but it’s one very few people possess. In today’s economy, more and more Americans complain that they cannot keep their spending habits under control. Many find it challenging to develop a reasonable way to manage their money spending. They blame the fact that they do not have a good enough job, and their income is insufficient. Luxuries such as retirement savings, long-term financial planning, or minimizing expenses are out of the question.

Simple Truths About How to Save Money

Even though the job market can impact how to save money and your budget, it is not the only factor. Unless your circumstances are truly dire, you can still put some effort into saving money. We are here to help you do that. The ways to save money are numerous. First, you need to ask yourself several fundamental questions.

The longer the time frame you set your eyes on, the better. Since we presume that you are a novice in the art of money saving, a plan for a year sounds like a good start. Your saving goals should be achievable in the time you’ve set aside for them, and they depend on several important factors, including, but not limited to:

  • The pay you get at work
  • What monthly expenses you have
  • Which ones you can cut down on
  • Your credit card debt and other personal debt you’ve accumulated
  • Other income opportunities, including a part-time job

Achieving Your Financial Goals

Once you have set your future financial goals straight, it’s time for you to get down to business and figure out a plan to achieve them. It might sound scary or even impossible. You may fail a few times before you find yourself on the path of success and expertise in personal finance. What you need to remember is that you must stay focused on the goal and stick to the plan.

The rewards you will reap are much better than continuing to struggle. You’ll be able to stop worrying about how you are going to pay the next credit card bill or buy the kids new clothes for school or keep your car insurance premium up to date next month. Even though some goals can be too high at first, no goal is too low.

If you feel like you need to start small, by all means, do it. With time and persistence, you will be able to start saving more and more each month. By the end of the year, you will be pleasantly surprised by what you see when you put your debit card in the ATM to check your balance.  

How to Save Money: Start By Answering Key Questions

If you are not yet ready to achieve those goals, keep finding answers to important questions about your short-term goals and ways to save money which will work for you. For example:

Does my credit score even matter?

Of course, it does. The score shows how far in debt you are and what for. It also suggests whether you will manage to pay it off, including your credit card debt. It will determine whether or not you will be able to take out a new loan, refinance an old one, or get a new credit card if you need one. It is essential to keep your credit score as high as possible. To do so, you should become a master at sticking to a budget, managing expenses, paying bills on time, and achieving your financial goals.

Estimate how much you must be saving each month so that you can cover your debt. Depending on the amount of debt and your income, you might want to wait until you no longer owe money before you start saving money for something else. You are entitled to one free-of-charge credit score check from each of the three credit bureaus every year. Don’t let this opportunity go to waste; check your score to make sure there are no inaccuracies and figure out a way to improve it.

What are you saving for?

Are you saving for retirement? Do you want to have an emergency fund to rely on when things go wrong? Are you hoping to buy yourself something you have always wished for or go on a long trip abroad? Or maybe you want to live a more comfortable life. If you manage your income-to-spending ratio well, you do not have to worry about grocery shopping or spending too much at the grocery store at the end of the month.

Determining your goals will inform the money-saving tips which are most suitable for you. Your strategy should be different if you are trying to save $50 a month than if you are trying to have a five-figure sum in your checking account by the end of the year. 

All is clear, but where do I start saving money?

If you have asked yourself this question, you’ve already asked the first important question. You realized that you need to start saving, and you need to do it now. We can’t promise it will be a straight path from here out, but once you’ve committed yourself to the cause, your financial well-being should get better.

Say you have determined your goal; now what should you do to achieve it? Decide what you can do to save the amount you are aiming for. The money-saving tips we will share with you in a short while will help you with that. It is perfectly fine if you are not in a position to implement all of these strategies at once, but do your best. Then make an initial calculation about the amount of time you will need to achieve the goals you’ve set. It is hard to be 100 percent precise in that estimation, but at least take it down to a year or the number of months you will need.

Finally, it is high time that you roll up your sleeves and get to work saving money and feeling better about your financial independence. 

General Tips on How to Save Money

When you are 100 percent certain that you need to set some cash aside for a rainy day, the best way to approach it is not with drastic changes to your spending habits or lifestyle. Instead, start with some small initial steps that will make your transition go more smoothly.

How to Save Money

Step 1: Set your budget.

Decide how much you can spend each month to pay your bills, buy groceries at the store, and cover other immediate expenses. Thus, making a plan for how to save money will let you limit non-discretionary expenses to a minimum. Wasting money is a big problem for Americans nowadays, which is the reason for our nation’s dire financial management abilities. By getting rid of non-discretionary expenses, you will be doing yourself a favor. 

Step 2: Open an emergency fund.

Another thing to do is to open an emergency fund. It’s only logical that if you can save $500 to be used only in cases of an emergency, you will be better off financially. It will also protect you from unexpected disasters, at least to a certain degree. Whether your family is low-income or not, an emergency fund can make the difference. 

Step 3: Employ smart tactics for improving your personal finance.

Other tactics you can implement to improve your personal finance include: 

  • Budgeting with an envelope system by setting aside the amount of cash you have at your disposal for a particular time frame.
  • Creating a savings account to put money aside for further education (college), retirement or financial emergencies.
  • Asking your employer for automatic saving services. This will limit your take-home pay, but currently, your savings are more important than take-home pay.
  • Prioritizing short-term goals over long-term saving goals.  

Please note that even though all the strategies described above are somewhat effective, you are only at the beginning of building a better financial future. There are a lot more skills to hone, habits to develop, and things to learn.

Maybe the next step you take into the world of saving has to be learning about some new terms and concepts. For example, why don’t you learn about the zero-balance budget?

How to Save Money by Creating a “Zero-Balance Budget”

This is an ancient concept in the world of personal finance. You have a zero-balance budget when every last penny you have at your disposal has a designated purpose. The money that comes into your household at the beginning of each month, minus the expenses you have for the same period of time should equal zero; hence, the name of this budgeting strategy.

To achieve this balance easier, it’s best to divide the money you will be spending into several distinct categories: home, food, transportation, and utilities. Even if you have managed to live on a zero-balance budget so far, the chances are that you can start saving.

You can find places to cut back in every one of these categories if you know how to do it. Let’s take a look at some ways to save money in each of those categories.   

Saving on Home Bills and Utilities

Start by thinking about new ways you can optimize the way your household is spending money on energy, water, gas, and other utilities. Small changes such as washing the dishes in a dishwasher instead of the sink can have a major impact on how much money you pay regularly.

Other small changes, like turning off the tap while shaving and brushing your teeth and installing energy-efficient light bulbs throughout the house can also help. You should also check the temperature at which you set your water heater. A good temperature to cover the needs of your household is 120 degrees. At the same time, every 10-degree reduction cuts the cost of heating water by five percent. 

As for the house itself, you might want to compare deals for home insurance and options to refinance your mortgage. Even a 0.5-point reduction can save you thousands of dollars throughout the loan’s life, and this is something worth thinking about. Making monthly payments toward your loan is likely to be among the most significant financial burdens on your family right now. Thus, negotiating a better deal will not only help you keep up with the bills in a more relaxed fashion but also save a little bit.

What if you are renting?

We know that more and more people are now giving up on the hope of ever owning their home. They choose to rent for life and cite flexibility as the main reason to do so.

Another is the fact that they cannot afford to buy property. This is far from the truth. Unless you live in some ultra-expensive place such as New York City, where even modest apartments might go up to a million dollars, in the long run, it will be more financially viable to buy your own place. You will be paying more or less the same amount of money to the bank as you do now to the landlord.

However, the difference is that at the end of the loan’s life, you will be the owner of the place. Property is likely to become more expensive over the years, so at the end of the day, you will profit from your investment. It’s a risk — and too big of a gamble for some — but the potential for reward outweighs the risk. 

Saving on Food: Is it Possible?

You can spend less on food without compromising the quality of life for your family or jeopardizing anyone’s health. This does not require much sacrifice, either. You can save a significant amount of money by preparing and packing lunch to bring from home to work or eating out one time fewer each month. While you are at a restaurant, you can skip alcoholic and non-alcoholic beverages altogether.

Saving money that way is effective because dining establishments tend to mark up the price of alcohol and soft drinks by three to five times. Stick to water. It is cheaper and healthier. It would be helpful if you can plan your meals and stick to your list while at the grocery store. When you get back home and start cooking meals, doubling the recipe is a fool-proof way to save not only time but also money off grocery products for the week and from there, the month. These are all simple things to do, but they are also quite effective. There is no reason not to try them out, even as a test.

Here’s what to do if you want to take saving on food up a notch.

Freezing your expenses, especially about those pertaining to food, is also a good idea. Buy the food you will need for home and to prepare your meals for work once a week, and then establish a ban on spending money on food for the rest of the week. It may be too hard for you, or you might not be able to keep yourself from buying meals from your favorite restaurant every once in a while.

You can also try an easier strategy. Freeze your purchases for your entire household for one day a month. No one is to buy anything from anywhere for 24 hours. You should avoid being in the vicinity of stores where you tend to impulse-buy throughout the day to avoid failure. After all, it is you who should lead the entire family by example in this rather strenuous adventure. 

Piggy Bank

Saving on Your Car

Transportation, and more precisely, driving, is part of the American cultural experience. It is no wonder that expenses related to vehicle maintenance and use make up a considerable portion of almost every household. If you want to save money off your car, try:

Taking better care of your vehicle will prolong its life and make it more fuel-efficient. Follow the tips described above if you are not ready to make more radical sacrifices like giving up the car on weekends, taking up cycling to and from work, or using public transportation. 

Another transport-related matter is when you are going on vacation. Sometimes the price for plane tickets amounts to up to a third (or more) of the full price of the trip. There is no reason for not saving that money by shopping for tickets several months in advance or opting for more budget-oriented airlines, for example. If your destination is reachable by a car, then you might consider spending a day driving and saving on the airplane cost.

Other Ways to Save

All of that is fine and dandy, but if you are willing to really save money and be financially comfortable in the future, you still need to do more. Want further details? Here they are:

What to do in regards to banking, credit cards, and debt?

We’ve already said that improving your credit score is crucial if you want efficient financial management on a personal level. Let’s say that things are still relatively good for you on this front. How do you keep them that way? It’s simple: by navigating wisely through the treacherous world of banking and credit cards.

Let’s start with your credit card debt. The moment you decide you need to be more financially responsible, you may find it impossible to eliminate it. Thus, set a short-term goal to make it at least $1,000 in the next few months and keep it that way. You should be able to save up to a couple of hundred dollars a year if you can maintain your credit card debt at a reasonable rate.

Then work toward eliminating the debt. It’s time for drastic measures if you find yourself in a situation in which you cannot control your spending. What’s worse is if you buy things on credit even when you do not need them. Take a pair of scissors and cut your credit cards in half. Be sure to set aside your library card as you do this. You will need it later (read below). 

Don’t forget about small expenses that add up to a big difference.

When dealing with bank cards, there is one more type that you need to be careful about, and that’s the debit card. If you use it to withdraw cash for your daily needs, at least be sure that you are using an ATM from your own bank. It might not sound like a big deal to be charged $3 per transaction once a week, but when you do the math, you will realize that we are talking about $150 a year gone to waste.

Wouldn’t it be better to have this money put away for a rainy day? You may even be able to buy something nice for yourself. Why should you burn $3 every week just because you can’t be bothered to walk a few blocks to get cash?

Saving on Healthcare

Grocery shopping, utilities, and even credit cards might sound like perfectly legitimate ways to achieve your monthly saving goals, but healthcare definitely is not something to be cutting corners on. Well, hear us out. When it comes to saving on medical attention, it all boils down to one very essential concept: taking better care of yourself.

There is a term called preventive healthcare, which has a rather self-explanatory name. For example, go to the dentist regularly so you can catch problems early. This will enable you to prevent fillings, root canals, and other complex procedures. Such procedures are not only not fun, but they are also quite a financial burden.

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Don’t be afraid of generic drugs.

Another option is to ask your doctor about generic drugs. If it turns out that they are suitable for you, you can save several hundred dollars or more each year if you opt for them instead of brand-name drugs, which tend to be much more expensive just because of the label. The same goes for over-the-counter medications; opt for the store brand because they tend to be 30 to 40 percent cheaper than nationally advertised brands. At the same time, they use exactly the same formula. They do the same thing as their pricier counterparts we hear about during commercial breaks.

As you can see, it is entirely possible to be saving money on essential aspects of your life, such as healthcare, without compromising your well-being. When you know this is possible, it becomes easier to adjust to the idea that you can be financially more efficient in other areas of your existence. Entertainment and leisure-time activities are not as vital to your survival as healthcare.

Ways to Save on Entertainment

We’ve already said it: you can save on entertainment. And you would be a fool not to try to make it work.

Go to the library.

When was the last time you visited your local library? Did you know that nowadays libraries offer a wide range of services, including e-books, so that you will not be required to even go in person? In addition to books, libraries also have DVDs and music to borrow.

The majority of libraries in the U.S. are part of an intra-library exchange program too. Even if they do not have certain items that you want or need, they will be able to transfer them from another location for you. It’s much cheaper than purchasing the books you want to read from online retailers or the bookstore. 

Get cheaper ticket options for movies.

As for going to the movies, are you sure you know all about the discount programs offered by your local theater? Many cinemas offer senior and student discounts, cheaper tickets on certain days, and group discounts of various sorts.

Naturally, they are not too eager to advertise those options, especially when it comes to big blockbusters that tend to attract large crowds. At the same time, however, they will offer the information when you ask for it. If there is a concert or art venue nearby that you’d love to attend, but you are discouraged by the ticket prices, you might inquire about their volunteer program. You will have to do some work and get no pay for it, but you will be able to attend the event free of charge, which is kind of nice. 

Find a decent gym membership.

Last but not least, if going to the gym is your thing, then finding the best gym membership possible should be a top priority. Weigh in factors such as location too. Even if the price for the gym membership sounds great, if you have to drive a long distance to get to the place, you will be wasting not only time but also money. It all boils down to finding the optimal option for your specific situation.

Saving Money Gym

Of course, saving money can prove to be a rather tedious and troublesome affair. That’s why it’s always best to have the support of like-minded people to help you in the endeavor. You are more than likely to find such support in the faces of your family and friends. If you can get your entire family involved in the effort, you will achieve greater success in saving money in a much shorter time. 

How to Get Your Whole Family Into Saving Money

It all boils down to having a conversation with members of your household. Explain to them why you consider saving money a top priority for your family and the benefits all of you will reap if you are successful. Expect some backlash.

Resistance to some of your ideas is normal, especially from the kids. They might not be too happy about the prospect of canceling your cable TV subscription. Canceling your cable will save you up to a hundred dollars a month! They might also not like having to get lunch for school from home instead of buying it at school.

That’s why communication and compromise are key. Create a solid plan and make concessions when necessary. You should also figure out what you are going to do with the money saved. It should be something the whole crew is happy about.

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If you are wondering about ways you can be saving money from your relations with family and friends, here are some ideas that might prove to be helpful:

Limit gift-giving.

Especially during the holiday season, expenses related to purchasing gifts can become overwhelming. This is particularly true for family members who are not as financially flexible as you hope to be.

It is a good idea to have an open discussion with family and friends about setting a limit on the amount of money each of you will spend on gifts. The “secret Santa” concept is a very good one too. Have each member of your family buy a present for just one other person. In this way, you will cut costs back considerably. 

In the same vein, you might want to plan the gifts you are going to make in advance. You might have already noticed that the most expensive gifts are not always the most precious ones. If you have in mind what you are going to give someone a couple of months earlier, you will be able to look for sales, and you will be saving money while still generating great responses. That’s where the 30-day rule comes in handy. 

Follow the “30-day rule.”

Let’s say you want to make someone close to you happy, or you just would like to buy an expensive item for yourself. The 30-day rule ensures that you are not too impulsive about it. If you can hold your horses for an entire month before you purchase the item that caught your attention for the first time, you will able to assess whether that initial idea was a good one.

However, if you still feel the same desire for the object, then you probably will have to buy it. On the other hand, if your enthusiasm has waned, then it was good that you waited!

Remember, cheap is not always better.

When it comes to gifts, great ones are not always those with the highest price tag. There are other instances in which prioritizing price over quality will also make sense. In other situations, however, it is just the opposite.

When it comes to buying appliances that your entire family is going to use over the years or clothes for the kids, it is much wiser to go for more expensive options. Expensive clothes are likely to be of higher quality. It is better to buy a $1,000 fridge instead of a $450 one secondhand if it will last without major repairs for the next decade, right?

The same goes for shoes you and your family members can wear several years rather than cheaper alternatives that only last a season. You catch our drift. That’s just a quick reminder that the best ways to save are not always the most obvious ones. If it sounds too complex to follow, don’t fear. You will hone your skills as you go.

The more accomplishments you achieve as you improve your spending habits, the easier it will get for you to figure out new strategies. These strategies will improve your financial management. From short-term goals, you will swiftly move to long-term goals until finally, you will be able to achieve them, even very long-term ones.

Start saving for the important things early on.

One example is when you start a family. Naturally, you would want only the best for your kid in life. To help them find a good job, you must help them go to college.

As you know, education is notoriously expensive these days, and it is unlikely that things are going to change any time in the foreseeable future. That’s why it might be a good idea to set up a college fund for your baby the moment they are born. Set aside a small sum each month and at least a portion of additional pay you get from a part-time job every once in a while.

Tips for College Saving

If you manage to do that, when your kids are grown enough to go to college, you will be able to surprise them with a hefty reward toward their degree. Even if it is not enough, you will be able to help them a lot. You can also research tips and tricks for saving money for college and federal programs that provide tax-free money for kids from low-income families. Financial aid can be used to pay tuition, buy books, and pay for lodging at college. Think about such options early on; they are a real money-saver.

Saving Money College

One thing you should not forget about in the long run is that luck is the last thing you should be counting on to achieve your savings goals. Tantalized by initial success, some people tend to make mistakes that set them even further back than they were before.

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Saving Money Mistakes to Look Out For

There are many ways you can suddenly find yourself with a little bit more cash in your savings account than you expected:

  • A small inheritance or lottery winnings 
  • Unexpected end-of-the-year bonus from work
  • Sale of car/boat/appliance you no longer need
  • Tax deduction or unforeseen return
  • You’ve been more successful at money-saving than you thought 

You might be tempted to go out and buy something to reward yourself for your recent luck. Don’t! Once that hole is open, you might be fooled into thinking you will manage somehow, even if you go over-budget a little, or that your luck will follow you no matter what. That is hardly ever the case. 

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Focus on a long-term goal.

At least wait until you accomplish one of your long-term goals before you go on a shopping spree. Even then, don’t go crazy. That’s the place where having a strong support group of like-minded people around you becomes important. It’s always best to have the advice of someone you can trust to fall back on. 

Yes, we are going too far with tips for saving money and bettering one’s financial situation, but we seem to be missing one of the most obvious questions of all:

Getting a Higher-Paying Job

When it comes to saving money, of course, it would be easier to just get a higher-paying job. We do not deny the fact that earning more can help you a lot when you are struggling to pay the bills. It is only logical. More money is coming in the household; hence, you have less to worry about. There are two problems with that line of thought, however.

1. Are you able to get a better job?

There are all sorts of factors that can hinder higher earning potential:

  • Education
  • Place of residence
  • Current economic conditions
  • Family situation and background

There is no shame in admitting that one or a combination of these factors is causing your current financial distress. Of course, the foundation of the American dream is that everyone can achieve anything if they set their mind on it and are willing to pay their dues.

However, it’s high time to face the harsh reality that there are instances when overcoming obstacles is so hard that the dream is nearly impossible. If you are still optimistic about your employment prospects, however, you simply need a plan on how to get a better job. Maybe you will have to get a part-time job to pay for the school you will attend at night to improve your current qualifications. Or perhaps you will have to relocate to another city.

Still, there remains one more important question:

2. Is that plan going to work?

If you are not able to live within your means now, the chances are that even if you are earning a couple of thousand dollars more each month, you will still be unable to manage your finances. The thing about money management is that when your skills are poor, no matter how much cash comes in every month, you will spend it all.

That is why it is important to get acquainted with everything we’ve taken the time to tell you about here. Earning just enough to stay afloat is not enough. You need security, and security comes through saving. 

OK, I’ve saved all that money. Now what?

Congratulations! You’ve achieved more than most people nowadays are capable of. You should be proud if you are one of the few Americans who has at least $1,000 in an emergency fund and can balance your monthly budget. You should also be proud if you do not spend all the money that comes in on bills and can spare a little for your savings account.

There are two directions you can go right now. You can either continue saving or treat yourself with something that you can afford now. What we can recommend to you, however, is simple:

Follow your dream.

If you have always dreamed about backpacking through Asia or traveling around the world, then maybe it’s the right time to indulge yourself. Perhaps you have thought about working on a cruise line while saving for housing and food or studying a subject some consider impractical, such as singing or painting.

Money is no good if it does not help us achieve what we have always wanted without regrets. Take some time off work, or at least cut back on the overtime. If you have not yet found your passion, devote some time to it. At the end of the day, you will be happy you tried — not that you played it safe when it was no longer necessary to do so. 

Or, invest in a better career.

If work-related success is what drives you, then, by all means, go for it. Work harder, study more and/or open up your own business. The money-saving skills you’ve mastered will be invaluable when you are trying to achieve something on your own in the business world. You will also have some starting capital since you opened up a savings account some time ago.

You will also have some starting capital since you opened up a savings account some time ago. Today you can afford to buy a jet-ski. Who knows, with hard work and some luck, you might be able to buy a yacht tomorrow. Again, there is no guarantee for success, but there is also no reward without the effort. The management skills you’ve learned while saving money to gain financial stability are already a good start. 

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Or take even better care of your family and friends

If you want to help out someone close to your heart who struggles with their financial flexibility, then, by all means, do it. Your ability to help though depends on managing your own personal finances and meeting your long-term goals for saving money.

Give money-saving tips and promise to be there for your loved ones when they are struggling to keep up with potential commitments in money-saving. If you did not have the support of a close friend while you were becoming the master in money-saving you are now, you know it would have been much harder to succeed. Life is most fulfilling when you can give back, and who deserves it more than your family and friends, right?

Some final words of great importance

We’ve gone through nearly most of the ways you will be able to start saving money and be more responsible financially. You will not be able to implement all the strategies we’ve described above at once. However, trying out as many as possible will do you a favor in life. Expect setbacks and relapses, especially in terms of being tempted to use your credit card to buy items you don’t need. The vital thing to remember is that you should not give up. There is no gain without pain! 

Do you have a personal story about money-saving? Is there anything to add related to the money-saving tips we’ve shared? Don’t hesitate to get in touch with us and share your experience in the comment section below. Any tips off the beaten track about how to save money are appreciated.

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