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How to Start Saving Money (So You Can Afford the Life You Want)

How to Start Saving Money (So You Can Afford the Life You Want)

It is stressful to live paycheck to paycheck. Having a financial buffer and money in the bank is a great feeling – you deserve that! Here is your guide on how to start saving money today. This post will help you ditch all the excuses why you can’t save, and start new money habits. Imagine how good it will feel to start saving money for a car, or start saving money for a house? Let’s get started!

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Start Saving Money

Trying to start saving money can take real effort for some of us, especially if we have never set up any sort of savings plan before.

In some cases, if you earn so little, it is hard to make ends meet from paycheck. You truly might not be able to save money for the future.

If this is your situation, I highly encourage you to focus on making extra money. We can be frugal and thrifty, but there truly is only so much you can do if your income is very low. There are dozens of articles on this site with hundreds of side hustle ideas to find something that fits your skills and your life.

You deserve the peace of having savings in the bank. Here is your guide on how to start saving money today, so you can afford the life you want!

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How to Start Saving Money Today: Analyze the Household Budget

It may be hard to find any wiggle room in your budget to start saving money.

In this case it helps if everyone in the household keeps track of their expenses for the day or even the week. They should write down everything they spend in cash and on their credit cards and add it all up at the end of the day.

Related post: 8 Clever Budget Tips for Families That Will Save You Tons of Money.

If you discover you have a $20 a day eating out and latte habit, there are other options which will free up money to save.

You can pack a lunch at least a few days a week to save money on food. Another option is investing in a nice cappuccino maker and travel mug.

If you have a daily latte habit, making your own at home will more than pay for the cappuccino maker in only a couple of weeks. This could help save calories too if you’re not adding all the toppings and syrups!

Related post: How to Save Money Every Day So You Can Fatten Up Your Bank Account.

Start Saving Money for Your Life Goals

One of the best ways to start saving money is to keep a specific goal in mind.

Maybe you want to start saving money for a house, retirement, a college fund, even a new car or vacation.

With your goal in mind, use income versus expenses to see what you can shave off the budget each month without feeling totally deprived.

By setting a concrete savings goal, it helps your motivation to save money. Then your money isn’t just going off into a void (=the bank), it has a purpose.

Related post: Epic Tips You Need to Pay Off Your Mortgage Faster.

How to Start Saving for an Emergency Fund

Many people put off saving an emergency fund, even when they are saving money towards other things. Thinking about a future emergency where you need to use money isn’t exactly the most fun thing to do.

We might not know what type of emergency will come up where we’ll need extra money (a health crisis, a leak in our roof, the car breaks down, etc.) or when it will happen, but we do know one thing: it will happen at some point.

Unplanned situations where we need to use extra money will happen in all of our lives. It is something you should start saving money for.

Have a separate savings account and don’t touch it. Seeing a cute jacket on a really good sale is not a reason to dip into the emergency fund. Start saving money for your emergency fund each month, and don’t touch it unless you really need to.

Here is how much money you should save for your emergency fund.

How to Start Saving Money for Retirement

The best time to start saving money for retirement is while you are young. Money you save now has many more years to keep on earning interest than it would if you put that money aside when you are over 40 or even 50.

If that ship has sailed, the second best time to start saving money for retirement is now.

Check out the lazy method of investing I use here.

The biggest false belief I see in people who aren’t saving money for retirement, or saving for an emergency fund is they are waiting until they have more money to save.

Stop that stinkin’ thinkin’.

Every bit counts. Save $5, $10, $50, $100, more. It adds up over time. And is MUCH better than saving zero dollars because you are waiting to have $500 to save.

An easy way to automate your savings (in small amounts so you don’t even feel it) is by using the Acorns app. You can set it so it rounds up when you make a purchase. So if I bought a latte for $3.25, it would round up and save the $0.75 for me.

Acorns is a super useful app to help you start saving money, and takes away the excuse of forgetting to save.

Watch this quick video for one of my favorite ways to save money:

Keeping on Track with Saving Money and Financial Goals

If you are saving for a major purchase, be specific about how much it will cost.

Then set up a separate high-interest savings account online (like this one) and arrange for scheduled payments so that the money will go straight into the savings account each month.

If the goal is to save money for retirement, check your portfolio of earnings at least once a month. Make the most of any tax breaks given on 401ks and other forms of investments.

Revisit the saving goals from time to time to check on progress. It will help you determine whether or not there really is a genuine need for such a fancy car, or can the cash be better spent in another way.

Related post: The Best Budgeting Apps for 2022 to Manage your Money.

Pay Off Credit Cards First

Be sure to pay off any outstanding credit card balances before starting to save money in earnest.

The interest rate on the savings account is going to be tiny compared to the whopping rate some cards charge.

If you’re feeling overwhelmed with your credit card debt, read this: Yes You Can Eliminate Credit Card Debt: 5 Important Strategies You Need.

Start Saving Money by Keeping the Change

Keep change in an empty jar. When the jar is filled, go to a coin counting service or roll the coins yourself to avoid any fees. Take all that loose change and put it into a savings account. It all adds up over time.

Everyone in the family can save, even the kids, and this helps create a healthy attitude towards saving money. Each family member over a certain age should also have their own personal savings account for their own personal goals, such as buying presents at the holidays or a new computer.

To start saving money, it doesn’t have to take motivation and sacrifice. If you set up automatic savings, it doesn’t have to feel like sacrifice and you don’t need to be motivated. Once it is set up, you should not even have to notice.

Analyze the household budget, set the savings goal and then commit to it by saving and tracking progress. This is my favorite tool for tracking finances.

Saving money can be fun for the whole family, especially if everyone is saving for a great future together like a nice vacation or a better home.

Next steps:

Pin these ways to start saving money:

How to Start Saving Money (So You Can Afford the Life You Want) (putting money in a piggy bank)

What is your favorite tip for how to start saving money?

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