My Top 5 Secrets to Save More Money

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Saving money can be a very slow and frustrating process. Just when you get ahead a little, something happens to set you back again. Today, Dawn is sharing with us her top 5 secrets to save more money, even when it’s hard!

Dawn is a personal finance blogger at FI & Wine, which is all about enjoying life while on the journey to Financial Independence.

She covers topics on saving money, wealth building, goal setting, and single mom finance.

A few years ago I was living paycheck to paycheck and just one disaster away from diving back into debt. I set a financial goal to break this cycle and save $20,000. This seemed impossible given that I could barely manage to stay financially afloat.

I realized that something needed to change. I took a really close look at my finances and searched for areas I could cut spending and increase my savings.

In the process of doing this, I discovered a few techniques that, when employed, allowed me to save quickly and effectively.

I managed to reach my financial goal in just two years.

In this post, I’ll outline the 5 techniques that have been essential to helping me save money and reach my financial goals.

This post is part of the Saving More, Spending Less Series. You can read the other posts here:

Here are my 5 top secrets to save more money

#1. Track Your Spending

There is a quote from Alice in Wonderland that I think of often:

“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to.”

“I don’t much care where –”

“Then it doesn’t matter which way you go.”

― Lewis Carroll, Alice in Wonderland

If you don’t know where you are now, or where you are going, you won’t make any progress. This is especially true for our finances.

Tracking your monthly income and expenses is vital to understanding where your money goes every month.

{Here are 5 great reasons you need a monthly budget. Hint: knowing exactly where you stand is one of them! – Isabel}

I was plodding along, living paycheck to paycheck, simply because I didn’t understand my spending. As soon as I tracked my finances, I began to uncover spending habits that needed to change.

#2. Correct areas of overspending

Over the course of tracking my finances for three months, I learned so much about where my money was actually going.

I discovered that I was spending over $1200 every month on food! I’m a family of two, it’s just me and my son. How was I managing to spend this much money?!?

{Wondering how you can spend less on food? Here are some awesome ways you can save money on food without compromising your family’s health!}

This wasn’t the only area of overspending that I discovered. I realized that I was spending an insane amount of my income on transportation expenses, entertainment on the weekends, personal care and clothing for both me and my son.

Once I flushed out where I was hemorrhaging money, I was finally able to make adjustments and start saving money rather than spend it.

#3. Create a budget

Through the process of tracking my finances, I learned to break my spending down into multiple different spending categories. By grouping similar expenses together, I was able to understand how I was spending my money.

The next step was to set spending limits for each of my defined categories. By doing this, my budget was born!

I treat my budget like a map that I have to closely follow in order to get where I need to go. If I miss a turn or I am led astray, my finances will be off target and a little lost.

I follow my budget throughout the month, checking in a few times to make sure I’m still on the right path.

Additionally, I’m able to clearly outline how much money I can save every month. This helps me stay motivated to achieve that savings goal and be aware of my overall spending.

[Grab your FREE BUDGET PLANNER right here to start making your budget right now!]

#4. Automate savings

It’s so easy to think of excess money in the checking account as money that is ready to be spent. This doesn’t help to save money though!

I recently discovered that my bank offered a really great savings tool that would monitor my spending over the month and automatically transfer unused funds over to my savings account.

I have the option of adjusting how aggressive I want it to save for me.

This has made a huge difference in the amount of money that I tuck away every month. When I check my bank account and I see that I don’t have very much money, I’m much better at not spending that money.

On top of this, I used my budget to determine exactly how much I could afford to save every month. Initially, I determined that $400 was a conservative amount that I could save.

This is how much was left over after accounting for all my set spending limits across categories.

I treat this amount as a bill I have to pay. As such, I established an automatic transfer of funds for $400 every month.

And just like that, I was finally paying myself!

Over the last two years, I have become better and better at budgeting. I’m now automatically transferring $800 every month and my saving tool is shuffling over an additional $100 – $150 dollars every month, without me even noticing.

#5. Have a financial goal

I really believe it is human nature to wander around aimlessly until given a goal.

A goal is what gives us drive and motivation. A purpose to make meaningful decisions and take action to move forward and make progress.

Without a financial goal, it’s simply too easy to overlook our budget and go back to our old habits of overspending.Click To Tweet

When establishing a financial goal there are three main steps that I follow:

Review where I am right now.
Decide where I want to go.
Then, map out a plan to get there.

Then in order to stay on track, I do these 5 things:

Define exactly why my goal is important to me and revisit my why
Clearly define my goal and the steps that it will take to get there.
Track my progress.
Create a vision board that represents my why and what my life will be like once I achieve my goal.
Hold myself accountable by telling my close friends and family what I am working to accomplish.

Action steps: Learn more about setting and achieving your financial goals at Achieve Your Financial Goals in Three Easy Steps and How To: Stay on Track to Achieve Your Financial Goals.

Start saving more money now!

Just two years ago I was overwhelmed by the thought of saving money and just one bill away from slipping into debt.

But with just a few simple techniques, I was able to break that paycheck-to-paycheck cycle and save more than $20,000.

Saving money doesn’t have to be so challenging and complicated. By following the techniques outlined in this post, you can take control of your finances and finally reach your financial goals.