Money Saving Tips: 9 Essential Strategies

Saving money is a key part of a healthy financial life. It can be intimidating to start but rest assured that it doesn’t have to be difficult or require a complete lifestyle overhaul. Small, consistent changes can lead to meaningful savings over time.

Whether you’re looking to build an emergency fund, save for a vacation or plan for retirement, there are intentional, manageable steps you can take to make progress toward your financial goals.

Let’s explore 9 tips to help you start saving money.

1. Set clear savings goals

The first step to saving money is knowing what you’re saving for. Understanding your goals can help you stay on track. For example, you might ask yourself:

• What do you want to save money for?
• Why are those goals important to you?
• How long do you have to save for those goals?
• Which goals do you want to prioritize?
  

Once you’ve set your goals and organized them by importance and timeline, you can create a concrete plan. This could be in a physical notebook, a spreadsheet, a mobile app that helps with budgeting or any other method that works for you. Writing down your goals makes them more tangible and allows you to track your progress.

2. Create a realistic budget 

Budgeting can be an effective way to determine where your money is going and how much you can start saving. A budget helps you prioritize your needs, control unplanned spending and set aside money for savings.

There are several approaches to budgeting, but a popular method is the 50/30/20 rule, which divides your income as follows:

• 50% to necessities (like housing, utilities or groceries)
• 30% to discretionary spending (like dining out and entertainment)
• 20% to savings and debt repayment

Various digital tools, like budgeting apps, can make it easier to track spending and set savings goals based on your current finances and habits. That can help you ensure that your savings goals are realistic and sustainable.

Regardless of how you choose to create a budget, it’s vital to consistently track spending and stick to your plan.

3. Apply for a savings account 

If you don’t already have a savings account, you might consider opening one (or more) to grow your savings. Savings account interest rates are typically variable, which means they can change over time. That said, they are a safe way to store your money while earning interest. (Checking accounts, for example, typically don’t earn interest.)

When researching savings accounts, you may consider factors like interest rates, fees, minimum balance requirements and withdrawal limits.

4. Automate your savings

With many banks, you can set up automatic transfers from your checking account to your savings account each month. Your employer may also allow you to send a portion of your paycheck to one or more savings accounts via direct deposit. Automatic transfers create a “set it and forget it” approach to saving, removing the temptation to skip a deposit. Your budget can help inform the amount you choose to transfer.

5. Cut unnecessary expenses

Cutting unnecessary expenses from your budget can help make saving money easier. This doesn’t mean eliminating everything you enjoy. Rather, you can start by identifying areas where you can cut back without feeling deprived.

Some strategies you might try include:

• Evaluating subscriptions: Unused streaming services, magazine subscriptions or gym memberships, for instance, can be canceled without impacting your lifestyle. You can also consider downgrading these services or switching to more affordable alternatives to save.
• Limiting dining out: Eating out can quickly drain your budget, especially if it’s a regular habit. You might consider prepping more meals at home and saving dining out for special occasions.
• Waiting before you buy: If you’re considering making a non-essential purchase, try waiting a few days (or at least 24 hours) before doing so. You may realize you don’t want or need the item anymore.
• Buying used: Many items may be available used or refurbished. This can help you save money without missing out on something you want.
• Taking advantage of free activities: Use resources such as social media or your community event listings to find free or low-cost entertainment in your area. 

6. Use coupons

Couponing can be an easy way to save money on everyday purchases. While it can be a bit time-consuming, it may also provide significant savings over time.

Before making a purchase, check for coupons or promotional codes from different retailers and brands. By planning ahead and prioritizing coupon-friendly items, you can save money.

7. Plan your meals and grocery shopping

Food is a major part of any household budget, and reducing grocery expenses can have a big impact. A weekly meal plan can help you accomplish this goal, allowing you to be specific with your shopping list and avoid waste or unnecessary purchases.

Another way to save on groceries is by buying non-perishable items in bulk or when they’re on sale. You can compare unit prices to ensure you’re getting the best deal. Check for sales on staples like toilet paper, paper towels, rice, pasta or canned goods.

8. Take advantage of discounts and loyalty programs

Many retailers and service providers offer discounts and loyalty programs that reward repeat customers with savings. These programs may be free to join. Once you’ve signed up, keep an eye out for discounts, sales or limited-time promotions to help you save.

9. Review and adjust your savings plan regularly

Saving and budgeting effectively requires regular check-ins and adjustments. It’s important to routinely evaluate your progress and adjust your strategy as needed to stay on track.

For example, you may set aside time each month to ask yourself questions like:

• Are you meeting your savings targets?
• Are there areas where you can improve your savings habits?
• Are your financial goals still aligned with your current situation?
  

It’s also important to celebrate your wins. Seeing your progress and achieving goals can be a significant motivator.

How to save money: FAQs 

How much should I save each month?

It depends on your goals, deadlines and means. For example, if you want to take a $2,000 trip 12 months from now, you’d need to save about $167 per month to get that goal. In general, your savings goals should cover an emergency fund and make room for retirement contributions before considering other goals.

How much should I save in an emergency fund? 

Your emergency fund goal may vary depending on factors like the type of work you do (full-time versus freelance or part-time), as well as your comfort level with risk. Experts generally suggest an emergency fund that covers 3 to 6 months of necessities like rent, insurance and food.

When should I reevaluate my savings plan?

You can reconsider how much you’re saving at certain intervals, such as every year, or when certain events happen. For example, if you get a raise at work, you may want to adjust how much you’re saving each month. Or if you complete a savings goal, you might readjust your automatic transfers to target a new goal.

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.