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A Saving Plan That Works: Saving Money !

Saving money is hard. Really hard. But the reward is sweet when you put in the effort to make it happen. There is no passive approach to saving, but when you decide to take action, there are several options that will get you on the right track to see your savings grow.



Step 1 - Start by Spending Less

As the saying goes, “A penny saved is a penny earned” so each small amount you can save instead of spending adds money to the right column of your spreadsheet. It helps to change your mindset from, “It’s only $5 or $20 or $100,” to “It’s another $5…”


Skip the Starbucks drive through and make coffee at home instead. Search for promo codes when shopping online. Take advantage of happy hour at restaurants, typically between 3-5 pm or after 9:00 pm. Share meals or cut out the drinks when you eat out.


Go through your bank statement for the past three months to find out exactly where your money has gone. Then perform a line-item critique and shave anywhere you can. Set up carpools for yourself and the kids to save on gas. Call your insurance agent for an annual review of car and home insurance premiums. Cancel cable, Netflix, Amazon Prime, lawn, and cleaning services until your debt is paid off.


Shave $5 here and there and you’ll be amazed at how quickly it adds up. Make it a challenge for yourself and your entire family to see how much you can save in a week. $5, $100, $200? Set short term goals that are achievable so you see your successes along the way. Remember, when you are able to get your savings where you want it, you will likely be able to add back in the purchases and splurges you’re enjoying now. In other words, tightening the reins doesn’t have to last forever, but the more seriously you work towards it, the faster you’ll achieve your goals.



Step 2 - Start Small

Begin by getting one month’s rent or mortgage in savings. This will give you a cushion if something comes up. Also, give yourself time. If you’re like most people, you’re living paycheck to paycheck so a month’s housing payment may seem insurmountable. You will get there though. Just keep your eye on the prize.



Step 3 - Pay off Debt

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It’s no fun, but if you have credit card, automotive loan, or hospital bill, get it paid off. Leave your initial money in savings and put every other extra penny towards debt. Being successful goes back to Step 1 regarding spending and savings. If you return an item to the store and receive a $12 refund, get online and make a $12 payment. If you receive a tax refund or stimulus check, transfer the amount to your debt.


Stay relentlessly focused on paying off debt. It doesn’t do any good to pay interest on loans while having money sitting in the bank (earning a few pennies a month) so you must get past this step in order to truly benefit from savings.


To see your progress, funnel all your extra payments towards one loan. Once you pay it off, do a celebration dance and then roll the payments you were making on that debt towards the next loan on the list. Soon you’ll be making large payments towards your debt while saving substantially on interest payments.



Step 4 - Set up Autosave

Once you’ve paid off all debt except student loans and your mortgage, start shoving extra money into your savings account. This is what you’ve been working towards so make it automatic and long term. Ask your employer if they offer split deposits. Often they will deposit an amount you request into checking for your bills and any extra directly into your savings account.


If your employer doesn’t offer it or you manually deposit your checks, they can take care of it at the teller window. Another option is to set up an automatic transfer with your bank or credit union. Choose a date of the month and an amount to auto transfer from checking into savings. Another hint is to set up your savings account at an online bank or other institution separate from your checking account. When your money is difficult to access, you’re less likely to spend it, improving your chances of growing your savings.


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