How to Get Into the Habit of Saving More Money

Follow These Tips to Save More Money

Here's how to save more money with less effort

Most people want to save more money, but rarely do they succeed.

Life interferes, money slips through the cracks, and before you know it, the end of the month has arrived and you’re no closer to saving than you started. In fact, you might be behind.

So how can you prevent this from happening time and time again? How can you actually end the month with a surplus in money?

You have to get into the habit of saving more money. It’s not enough to declare a goal of “I want to save more!” That’s a good intention, but it won’t get you very far.

Here’s how to go about establishing the habit of saving more money so that it becomes second nature to you.

Focus on Small Wins

When you’re just starting out with saving, it’s easy to discount your efforts: “Wow, I only managed to save $5 this week. Oh joy!”

Sure, $5 may not seem all that exciting, and it might cause you to wonder why you’re bothering with saving in the first place. But that’s not going to encourage you to continue to save.

Instead, focus on the fact that you’re saving something. It doesn’t have to be a big amount. $5 is better than $0, right? Not many people start their financial journey with thousands of dollars in the bank.

Give yourself permission to start slow. If you save $5 each week of the year, you’ll end up with $260. Progress is still progress; as long as you’re moving in the right direction, you’re focused on what really matters: establishing the habit of saving.

Once you gain momentum, you can take a look at your budget and figure out what saving opportunities are there. Or maybe you get a raise at work or take on another job, and you can start saving more.

Remember — you’re just starting out. We often encourage people to ​start by saving one percent of their income each month and increasing that by one percent each month. So if you earn $3,000 per month, save $30 the first month, save $60 the second month, save $90 the third month, and so on.

Set Up Automatic Transfers

Setting up automatic transfers from your checking account to your savings account can be a good idea to get you started with saving money rather effortlessly. Especially if you lead a busy life where you don’t always remember to log into your financial accounts.

Assuming you have a budget in place and know how much you can save, and assuming you know what your major savings goals are, you just need a bank that allows you to have multiple savings accounts. Online banks are usually the easiest to set up, and also offer the best APYs.

If your checking and savings accounts are at the same bank, this will be easier to configure. You simply open the number of savings accounts you need for your different goals, and then set up automatic monthly (or weekly) transfers from your checking to your savings.

For example, if your goal is to save $2,000 for a trip, and you have six months to save for it, you’ll need to transfer $333 each month from your checking to your savings.

If your checking account is at a different bank, then you might need to confirm the account as an external account. You’ll have to wait a day or two for a small amount of money to be deposited from your savings account to your checking account, and then you’ll be required to enter the amounts that were deposited to confirm that you own the account. It’s much simpler than it sounds, and the wait is worth it. The harder it is to access your savings, the less tempted you’ll be to raid it!

Once the transfers are set up, you can let them hum in the background while you continue living your life. The next time you check in with your finances, you’ll notice a healthy amount saved up, and you didn’t have to do a thing.

Question All of Your Purchases

Another great habit to get into to save money is to question all of your purchases. Most people are mindless consumers; they assume they need things like Oreos, manicures, cable TV, and a vacation to Hawaii.

While there’s nothing wrong with valuing any of these, you need to make sure your purchases are in line with what you want in life. Do you want packages of Oreos more than a vacation? No? Then it might be time to cut back on the junk food in favor of saving money on your grocery bill — money that can be transferred toward your vacation fund. Or you can decide Oreos are totally worth it. No judgment here.

The point is to stop buying things without thought. Ask yourself if what you’re spending your money on is bringing you any happiness, and if it’s bringing you closer to your goals. If it’s not a necessity (like food, water, and shelter), and it’s not making you any happier or helping you, cut it.

You can afford anything, but not everything, and it’s up to you to decide what goes in the “anything” category. Choose according to your values.

Want an easier way to think about it? Here are a few hacks:

  • Determine how many hours of work it will take you to afford something. Example: you earn $25 an hour, and you want to buy a $200 purse. Is that purse worth 8 hours of your life? Or essentially, one full day of work?
  • Set a monetary threshold for purchases after which you need 24 hours to think about it. Example: If something costs more than $50, you need a day to think on it. Maybe you want to buy that $200 purse as soon as you see it. It’s a classic impulse purchase. Instead, sleep on it. After 24 hours, you might find you don’t really need that purse as much as you thought.
  • A quick gut-check can help you avoid buyer’s remorse, too. Example: Ask yourself if you want the $200 purse more than your biggest savings goal. If not, walk away.
  • Declutter. This might not help you in the moment, but if you take some time to think about a purchase, it could help to go back to your house and take inventory of what you have. Perhaps you find that you already have a similar purse, or enough purses, that make the purchase frivolous.

Again, the goal is simple: become a mindful consumer instead of a mindless one, and you’ll likely discover saving is much easier than you thought.

Budget for Your Savings

One common reason that so many people make it to the end of the month and wonder where all their money went is because they don’t account for it to begin with.

Don’t make this mistake. Instead, take a look at your expenses and see if you’re spending more or less than your projected amount. You should be keeping track of how much you think you’ll spend during the month, and how much is actually spent. The difference should be getting saved.

So if your budget says you should have money left over, and the problem is just that you’re spending it before it can be saved, this method will help. Estimate your savings, and work that into your automatic transfers.

Another way to do this is to work backward. Start with your salary, and subtract all your expenses from it. Is there anything left? If there is, tell that money where to go so it’s not spent during the month.

Try the Anti-Budget

If the idea of saving money is boring to you, the above strategies might not work very well for you. That’s okay. Not everyone was meant to be a natural saver, and not everyone loves budgets or spreadsheets.

Instead, try the anti-budget, wherein you simply pull your savings from the top and spend the rest.

Yes, it’s that simple. There are no budget categories to keep track of. All you need to know is how much you can afford to save each month. (You shouldn’t try and save so much that your checking account is $0 before you can pay the bills.)

Once you have that number (a good rule-of-thumb is to save 20 percent of your income, but again, feel free to start small), set up an automatic transfer at the beginning of the month so your savings are taken care of. Then live off the rest, guilt-free.

There’s No Secret

There’s really no secret to saving. It’s all about getting into the habit, whether that’s through automatic savings, diligence, or simply caring enough about making your dreams a reality. The biggest obstacle is starting, so just begin today.