How to Save Money Every Month – 9 Simple Steps to Start Saving

1. How to Save Money Every Month – 9 Simple Steps to Start Saving Saving money is easily the most fundamental aspect of anyone's finances. But when people decide to start saving, they get stuck trying to figure out how to start. Follow these 9 simple steps to save money every month. How easy is it to start saving money? There are two answers to this based on my experience. First of all, if you’re not used to saving or haven’t fully developed a habit of saving, then saving would seem like some elaborate, hard-to-understand activity.

2. However, with access to useful and relevant information, saving can be the easiest thing you do for your finances. And it can be fun too! Americans aren’t saving as much as they should, and 21% of Americans aren’t even saving at all. The reason for this ranges from huge student loan debt, the lack of wage growth, and the increased cost of essentials. 21% of Americans aren’t saving at all I would also like to think that many just don’t know how to. So… 1. Create a Budget It’s not surprising that this is the first step on the list to help you save money every month. If you’ve been following my blog from the beginning, I always emphasize the importance of sticking to a budget. It doesn’t have to be excessively detailed or time-consuming. Your budget just needs to map out a plan for your money. Your budget should show your total monthly income, your monthly expenses, both fixed and variable, and what’s leftover.

3. 2. Track and Record Your Expenses I know this is kind of implied under the create a budget section, but it deserves its own bullet. There’s something about consciously seeing how much you’re spending on different items that just makes you want to be conscious about your spending. Let’s use my favorite example –coffee, one of America’s favorite breakfast beverages. It’s easy to buy a $4 cup of coffee here and there, and if you’re the Cappuccino/Frappuccino type, you’re spending almost $6 on a cup of coffee. Moreso because it’s a prevalent habit to grab one on your way to work without even thinking much of it. However, a poll by Amerisleep found that millennials (age group of 25-34) spend a shocking $2,008 on coffee per year, and the age group of 35-44 spend $1,420 on coffee per year. Surprised? Well, small costs also add up. By recording and tracking your expenses regularly, you can quickly catch areas where you might be overspending every month and start saving money on such costs.

4. Don’t just look at the individual prices; look at the amount you spend on an everyday item over a more extended period, say 6-12 months. That way, you can identify things that are eating into your budget unnecessarily. 3. Cut Spending It’s much easier to reduce your spending when you’re tracking your expenses. You’re able to see areas in which you can save money monthly easily. You can also incorporate some money habits and challenges that can help you cut your spendings, such as waiting for 30 days before making a purchase, having a no-spend day, and setting a daily or weekly spending limit. You can also save a lot on groceries by creating a list before every grocery run or shopping activity, limiting your grocery runs to one day in a week, and using cashback apps to get the best deals on prices.

5. 4. Budget for Savings Make it a conscious thing to always include a budget for savings every month. The 50-30-20 rule suggests that you save 20% of your income. However, depending on your financial situation or personal preference, you can make that percentage higher or lower than 20%. The main idea is to develop the habit of saving deliberately with a plan. Personally, I calculate all my necessary expenses for the month, allocate a small amount to discretionary and fun spending, and then save the rest. Sometimes, depending on my expenses that month, I’m able to save and invest more than 45% of my take-home income. This is a sure way to keep you from living paycheck to paycheck because you always have money saved for emergencies and your future.

6. 5. Create Savings Goals My mum always says that she likes to give every money a name. That means she likes to say ‘this money is for a new paint job’, or ‘that’s the carpet money‘. Doing this takes away the vagueness out of handling money. In the same vein, classifying your savings by goals would help you save better. Make everything you want to do with your money a saving goal and put money towards it every month. It could be for a goal as small as “Christmas gifts for the kids” or as large as “downpayment for a house.” Whether it’s for short-term goals to be achieved with the next few months or years or long-term goals like retirement, always have it written down. Qapital is a great app to help with this. With Qapital, you can create goals for the short term, which would be kept in a secured FDIC savings account, and

7. also create goals for the long-term, which will be invested in a portfolio that matches your risk and goals, 6. Automate your Savings Out of sight, out of mind doesn’t have to be true when it comes to your savings. Your savings can be out of sight but also very well taken care of. Put your savings on autopilot by setting recurring deposits to a savings account. Automatically saving money without your knowledge can significantly boost how much you save every month because you don’t have to worry about forgetting. You can automatically deposit large chunks of money or spare change using apps like Qapital, Digit, and Acorns. 7. Start Investing your Savings

8. Once you’ve taken care of your emergency fund and saved money for up to 3-6 months of monthly expenses in a high-yield savings account, the next thing is to save in higher-return entities by investing in securities and assets. While investing always takes on some level of risk, you can stack up a fair amount of savings over time with compound interest. Let’s look at how compound interest works and how a small amount of money can make a huge difference: Amount $100/ Month $100/Month $150/Month Annual interest rate 0% 7% 7% Length of time Ten years 10 years 10 years Total Amount Saved$12,000 $16,776 $25,165 $100/mo at 0% vs. $100/mo at 7% vs. $150/mo at 7% Saving $100 in a 0% interest savings account for 10 years can make you leave almost $7,000 on the table than if you had invested that same amount in assets

9. that yield a combined 7% return (Average rate of return on the stock market is 10%, not including inflation) Additionally, adding just $50 more monthly would multiply your savings even more, with an $8400 higher return than a $100 monthly deposit @ 7% interest. Now, I know how difficult it is to get into investing when you’re a beginner, especially because you don’t know where to start. That’s why I created this guide to help you figure it out. 8. Choose the Right Tools We’ve covered a lot so far, and I know you’re probably wondering; “is there a way to make all these processes easier”?or you’re thinking; “I don’t think I can keep up with all these because it seems like a lot of work.”Well, you’re going to learn all about that in this section. 9. Keep Learning

10. Develop a habit of always wanting to improve your financial knowledge. Yes, financial literacy wasn’t on the standard school curriculum, but it’s on the agenda of real life. Be willing to seek out the knowledge for yourself to help transform your finances and set you on a path to financial freedom. Keep reading online materials and resources like The Finance Boost for more tips and hacks on handling your money.