How to Start Saving Money
A simple 10-step guide to help you start saving money without making your life complicated.
KNOW WHERE YOUR MONEY GOES
Before trying to save more, first understand where your money is currently going.
Write down everything you spend for the next 3 days — even small expenses.
You cannot change spending that you have not noticed.
FIND YOUR UNNECESSARY EXPENSES
Look at the expenses you recorded and identify the ones you could reduce or remove.
Circle three expenses that you could live without.
Saving becomes easier when you first remove spending that gives you little value.
CHOOSE ONE SAVING GOAL
Do not start with ten financial goals. Start with one.
Choose one clear reason for saving — emergency fund, travel, education, purchase, or another goal.
A specific goal gives your saving a purpose.
SET A REALISTIC AMOUNT
Your first saving target should be achievable, not impressive.
Decide the amount you can realistically save every month.
A smaller target that you consistently achieve is more useful than a large target you abandon.
SAVE BEFORE YOU SPEND
Treat saving as a planned expense rather than whatever money happens to remain.
Decide when your saving amount will be moved away from your spending money.
Money that remains available is easier to spend.
CREATE A SEPARATE SAVING PLACE
Make your savings physically or digitally separate from your everyday spending money.
Choose a separate savings account or another suitable place for your savings.
Separation reduces the temptation to spend your savings casually.
REDUCE ONE REPEATED EXPENSE
Choose one recurring expense that you can reduce without seriously affecting your life.
Pick one expense and decide exactly how you will reduce it this month.
Small recurring changes can become meaningful over time.
MAKE SAVING AUTOMATIC
Reduce the need to remember to save every month.
If your bank or financial service supports it, set up an automatic transfer appropriate for you.
Automatic actions reduce dependence on motivation.
CHECK YOUR PROGRESS
Saving works better when you regularly see whether your plan is actually working.
Choose one day each month to check your savings progress.
Measurement helps you notice progress and correct problems early.
KEEP THE SYSTEM SIMPLE
Your goal is not to create a complicated financial system. Your goal is to create one you can continue.
Write down the one saving action you will continue every month from now on.
A simple system that you continue can become more valuable than a complicated plan you abandon.
You now have a simple saving system.
You have moved from simply wanting to save money to having a basic system for tracking, reducing and regularly saving money.
Start with Step 01 today. Do not try to perfect the entire system at once.