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Use This Trick to Save Money Every Month – Guaranteed!

Figuring out how to save money every month is possibly one of the hardest parts of managing your personal finances. It always seems like there’s not enough left at the end of the month – how can you possibly figure out how to save?

And even if you do manage to save up a little, the car will break down or you’ll get a sky-high heating bill that will totally wipe out your little nest egg.

But saving money each month is crucial to becoming financially successful! If you don’t save money, you’ll never be able to buy a house or a decent car. You won’t be able to help your kids pay for college or have the freedom to do the things that you love to do.

money to be saved every month

Most of all, you’ll never be able stop worrying about money. Living paycheck to paycheck is a very stressful existence!

I’ve struggled a lot to try to find an easy, effective way to make sure that we save money every month. I’ve tried online budgeting tools, using excel, cash, you name it. Every system has failed me.

Until now!

I think I’ve finally landed on a system that seems to work pretty well so far, so I wanted to share it here with you.

Identify Your Financial Goals

Before you start saving money every month, you need to know why you’re saving it!

If you don’t have a clear goal of what the money that you save is for, you’ll wind up blowing it on something that isn’t really a priority. It’s tough to resist that cute new outfit when you know you have the money in the bank to pay for it!

But a new phone isn’t going to lead you to financial success, so take a moment to figure out what you really want your money to do for you.

Do you want to…

  • Have an emergency fund?
  • Create a nest egg so you can have a baby?
  • Save up for a down payment on a house?
  • Save for retirement?
  • Buy a car with cash?
  • Go on a nice vacation?
  • Pay for your kids college?

Once you have a clear vision of where you want your money to go in the long-term, it’ll be so much easier to stay on track and reach your goal!

Make Saving Money Every Month a Priority

If you really want to save money every month, you can’t wait to see what’s left at the end of the month. There will never be anything left!

To make saving a priority, you have to save money first, and then figure out how to survive on whatever is left.

You have to be reasonable about this is relation to your income, of course. If you only make $2000 a month, you probably aren’t going to be able to save $1000 a month for a house down payment unless you’re single and you sleep on a friend’s couch.

quarter to save for a house

But there’s no reason you can’t tuck away $100 a month for emergencies and $50 for a replacement for your car that’s falling apart. You just have to put that money away first before you have a chance to spend it on anything else.

Sure, you might have to get creative with your grocery budget. You might need to find a friend to carpool with to work to save on gas. But there are ways to live on less.

And hopefully you’re working on gaining marketable skills in order to get your income up in the future!

Create a New Savings Account for Each of Your Savings Goals

I’ve found that the key to saving money every month and being intentional with our money is having multiple bank accounts.

Technically you could just transfer everything to one big savings account and keep track of how much money is in each category in a notebook or in a spreadsheet, but I find that that creates too much confusion.

I like the clear division of having separate accounts for different purposes. I can easily see how much we have saved up in our vacation fund and what we have on hand for emergencies. No calculating required!

When I decided to get our finances in order, I opened eight separate accounts and labeled them as follows:

(These are just examples, you can make these categories whatever you want according to what your priorities are!)

1. Checking

Pretty much everybody has this, right? This the account that we use the most and is linked to our debit card. We have our paycheck deposited into this account, and after I separate the money into all of our other accounts, we use what’s left for everyday expenses like groceries and gas.

2. Emergency Fund

An emergency fund is so important. We almost never touch this money. We have about three months worth of expenses saved up, just in case something were to happen like a job loss or illness where my husband or I couldn’t work.

It might seem like a waste to have so much money just sitting there doing nothing, but it provides such peace of mind to know that we’re not screwed right away if we suddenly lose our income for whatever reason.

3. Big purchase savings

This is where we save up for large purchases that we hope to make. It could be for a new car, a remodel, appliances, anything like that. At the moment, most of the money in this account is going towards furnishing our new house.

4. Irregular Expense Savings

This account is such a lifesaver. We have so many expenses that only happen at irregular intervals, so it’s hard to figure out how to fit them into a monthly budget.

Things like:

  • Car repairs
  • Christmas and birthday gifts
  • Clothing
  • Vet bills

I looked back at how much we spent in each of these categories in the previous year, added all of them up and divided by 12, and that’s how much money goes into that account each month. When those expenses pop up, I just use the money in that account to pay for them, and it almost feels free!

5. Health/Doctor Bills

We actually have an HSA for doctor and hospital bills, but if you don’t have an HSA, you should definitely open up a bank account to save specifically for healthcare related expenses. You’ll be able to avoid most medical debt if you do this!

6. Vacation

What a fun category! Also self-explanatory. We decided how much money we would like to have to spend on vacations each year, and divided by 12 for the monthly amount to put into savings.

7. Kid’s College

Instead of a regular savings account, you may want to consider something like an Education Savings Account or a 529 Savings Plan. Just make sure you get an account that allows for as much flexibility as possible.

money to save each month

8. His and Hers Allowance

We created this category out of a desire for marital peace and harmony. We both have things that we like to spend money on that the other doesn’t necessarily approve of.

I used to constantly get irritated at my husband for the little things he would spend money on that I felt like was a waste. I didn’t know where to put those things in the budget!

That spending would throw off my calculations and we’d wind up over budget.

And of course, I enjoy saving up to spend money on blogging tools. But it always felt like too much to spend our family’s money on.

So we decided to give ourselves each a little account that we can spend from freely on whatever we want without having to consult the other.

I can rest assured that he’ll stay within those limits and not spend any more than that, and I don’t spend more than what I’m allowed either.

Sometimes we buy each other stuff from our own allowance account, and it makes it a little bit sweeter than just spending money from the family budget on each other.

Decide How Much You Want to Save Every Month

Take a good look at your budget and decide how much is reasonable for you to save each month in each category. It’s OK if you don’t get it right the first time. If it winds up being too much or too little, you can always adjust it next month.

Even if you think you don’t have anything to spare, just try setting aside $50 in your emergency fund and see what happens. If you need that money at the end of the month, it’ll still be there. But you might surprise yourself by figuring out how to survive without it!

Set up Automatic Drafts to Your Savings Accounts

Once you have your accounts created and you know how much money you want to save every month, you need to set up automatic transfers out of your checking account.

It’s so much simpler to just have the money automatically go to where it should be going than remembering to do it each time you get paid. This is true for me at least, because I’m lazy and I would never get around to manually doing the transfers every payday.

This is the real secret to saving money every month.

If you let the money that you want to save sit around in your checking account, you’ll wind up spending it on dumb stuff. It’s way too easy to accidentally spend your emergency fund on a new couch if it’s sitting in your checking account easily accessible by debit card.

But if the money automatically goes into savings on the day you get paid? It’s suddenly a whole lot harder to justify buying that couch when you have to transfer money out of your emergency fund to do it.

That’s How to Save Money Every Month!

So that’s how to save money every month!

No matter what your income is, you don’t have to resign yourself to never being able to save. Living paycheck to paycheck does not have to be your destiny!

You’ve got this.



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