6 Money-saving Tips

As you work toward your financial goals, optimize your savings with these tips!

1. Record your expenses

Before you start saving, you need to know how much you’re spending. Tracking your monthly cash flow will make it easier to understand your financial standing and move toward your savings goal. Your monthly cash flow is your income minus your expenditures (the money you spend). To keep up with your expenses, try a budget app or go old school with a spreadsheet.

2. Cut spending

Once you’ve seen firsthand how much you’re spending each month, let’s look for saving opportunities. This could include getting creative with gifts, minimizing the number of times you dine out, and canceling unnecessary subscriptions. Setting a budget of what you can spend every month on groceries, gas, etc. will help keep your spending in check. Also, reconsider your “daily” expenses. Do you really need a premium coffee every day, or could that be a sweet treat on Mondays and Fridays? Then you can make your own coffee on Tuesdays, Wednesdays, and Thursdays. Every small change can add up.

3. Determine financial goals

The intent is to set up healthy, attainable financial goals that hold your future in mind while maintaining a comfortable lifestyle. Ask yourself the following questions.

  • What’s important to you?
  • Where do you see yourself in 5, 10, or 15 years?
  • Have you thought of retirement? When do you want to retire?
  • Do you have debt you’re trying to pay off?
  • Do you need a new vehicle soon?
  • Do you have a goal to own your first home or move into a bigger house?

Every answer to these questions determines how much money you should be saving every month for your future or whether to set up a plan to become debt free. Whether you’re saving for a specific item or just trying to build a savings cushion, a good rule of thumb is to put away around 20% of your paycheck into a savings account.

4. Pick the right tools

There are many saving options to serve your short-term goals, like a new vehicle, and long-term goals, like retirement. Make sure to choose the one best suited for your needs.

  • A regular savings account
  • A certificate of deposit – A savings account that locks in your money for a fixed period of time at a higher rate than a regular savings account. These are perfect for building your savings in a short amount of time.
  • Vacation savings account – This savings account is ready for you to go on vacation, worry free.
  • Christmas savings account – Are you the Christmas gift guru? Then choose a savings account meant to save the money you need to give the perfect presents.
  • HSAs – Health Savings Accounts are tax-advantaged savings accounts designed to save future medical expenses before they arise.
  • IRAs – Individual Retirement Accounts are a secure and flexible retirement savings option.

There’s a savings account for you and your goals.

5. Making saving automatic

A financial service perfect for saving money: automatic transfers between your checking and savings account. Most financial institutions allow you to choose when, how much, and where to transfer money into your accounts. So during payday, a portion of your paycheck can automatically go directly into the savings account. This takes away the temptation to spend everything that is in your checking account.

6. Be diligent

Saving money can be difficult, so a financial measure to consider to stay diligent is the 50/30/20 rule. This is a great money-managing tool that breaks down your budget to:

  • 50% of your money goes towards the necessities, such as food and bills
  • 30% goes toward your wants, like a daily Starbucks coffee or checking out the new restaurant downtown
  • 20% goes toward paying off debt and your savings. Debt includes ticket items like auto loans or student loans. Whatever money you have left after paying your debt goes into savings! We suggest rent or mortgage be a part of the necessities column.

Take the steps to manage and save money for your financial well-being.