ABC’s of Starting to Save

Saving is a key to financial independence and building wealth. You probably like making money and spending money, but how do you feel about saving money? Think of saving as giving a gift, or paying a reward, to yourself. The money you save gives you so many benefits, like cash in an emergency, and the ability to buy big things, like a car. The thing to remember is that building up huge amounts won’t happen overnight. But it can happen if you make it a habit, make it automatic, and stick with it over time.

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It is hard to start saving money if you do not have a clear understanding of where your money is going.  For one or two months, track all the money you spend. A simple way to track your spending is to keep a log or diary of everything you spend. Make it easy – create your own log or use the spending log below:


At the end of the month look over your log and ask yourself a few questions:

  1. What categories did you spend the most money on?
  2. Are there expenses or items you can cut out of your budget or spend less on?
  3. What changes should you make given your goals and spending habits?

Once you have answered these questions, find one or two things you can do differently that will help to trim your spending. Consider picking one small action that can help you reduce your spending in a certain category. For example, eating out for lunch is something that you could possibly cut back on in order to save a little money. Using the money you have started to save, set a weekly or monthly savings target. Even $5 or $10 a month can help you get into the habit of saving! If you can set aside $25 per month, you will have $300 saved up by the end of the year. Seeing your savings grow helps to motivate you to save more. We will use this target in our next step, budgeting.

Budgeting (or spending plan):  

Now that you have mastered tracking your money, the next step is to pay yourself first. Paying yourself first means to prioritize savings. Creating a budget – or spending plan – may seem overwhelming or complicated, but you can do it! After tracking your expenses, you have a good idea of what you are spending your money on, how much you are spending, and when you are spending it. You can simplify your budget by considering your needs and wants and aligning them with your financial goals. Look at the example budget below to see one way to develop a budget by prioritizing savings first. 

Monthly Income:$3,600
Savings: $180
Eating out: $150
Auto Insurance: $100

Get started by creating your own spending plan or use the resource we have created. It’s important to regularly review your spending plan. As you develop your spending plan, or budget, here are some guidelines to consider for various expenses:

Budget Breakdown:

  1. Housing (rent or mortgage) 20 to 35%.
  2. Utilities (gas, electric, water, trash, telephone) 4 to 7 %.
  3. Food (at home and away) 15 to 30%.
  4. Family necessities (laundry, toiletries, hair care) 2 to 4%.
  5. Medical (insurance, prescriptions, bills) 2 to 8%.
  6. Clothing 3 to 10%.
  7. Transportation (car payment, gas, insurance, repairs, or bus fare) 6 to 30%.
  8. Entertainment 2 to 6%.
  9. Savings 10 to 15%.

A spending plan is an evolving tool. As priorities and goals change, update your spending plan. This practice will help you to gain control of your finances and regulate your spending, which takes you to our last step. 


You can take control of your personal finances. Keeping track of your spending and prioritizing savings are two ways to reach your financial goals. In order to gain control of your finances try to remember EARN:

  • Embrace reminders. Use reminders to keep you motivated. For example, consider setting a reminder the day before your payday to remind you to review your spending plan.
  • Automate your savings. Consider setting up automatic transfers to make consistent deposits. If you set up automatic transfers, you can “set it and forget it”. Removing barriers and using automatic efforts has been shown to help increase your savings. 
  • Reduce your exposure. Leave extra money and credit cards at home to limit spending. If you, your friends and family like to shop, explore other activities with them that don’t involve spending money.
  • Network. Do you have friends or family that also have savings goals? Challenge one another and check in on your goals. This may help you stay on track and meet your goals faster.

Tips for saving more

Use these tips to become a better saver.

Do you want it or need it?

Are you buying products or services you don’t really need? You can save money by cutting back on impulse buys or buying the latest fads and fashions. Also, give some thought to items on which you could spend less.

Make savings an automatic habit

Put a portion of every paycheck you or your spouse receives into your savings account by using direct deposit or automatic transfer. You’ll be much less likely to spend the money that way.

Pay yourself first!

Set aside money for savings at the beginning of each month, rather than waiting to see what’s left at the end. Decide on a percentage of your monthly income (for example, 5-10%) to direct deposit or transfer into your savings account.

Set aside “extra” money into savings

If you receive a tax refund, deposit it directly into your savings account. If you or your spouse gets an increase in pay, put the extra amount into your savings.
If you receive cash as a gift, save at least part of it. If you have paid off a loan, keep making the monthly payments — to yourself, in your own savings account!

Pay your bills on time

When you pay your bills on time, you avoid late fees; extra finance charges; disconnection of (and re-connection fees for) phone, electricity, or other services; the cost of eviction; repossession of cars or other items; bill collectors.

Avoid check-cashing stores

Check cashing stores charge for each check you cash. This can add up to a considerable amount each year. Consider opening a checking account at a bank and cashing your checks there instead. Check cashing is part of the service you receive as an account holder.

Save for retirement

Every federal employee, including military members, may contribute to the traditional Thrift Savings Plan (TSP). This plan offers the same type of savings and tax benefits as 401(k) plans.

If your spouse works for a company that has a retirement savings plan, don’t pass up the opportunity to participate. Many employers will match a portion of your contribution for “free.”

budgeting for the holidays

While the 6-week holiday season comes around every year, many of us aren’t prepared. Before long many feel overburdened with stress and our budgets may not be prepared for the additional expenses. Fear not… there are some things you can do to help avoid the financial holiday hangover.

budget notebook and gift

Explore alternatives to traditional gift giving

Share your talents – We all have special talents, consider sharing those with others. Have you thought about gifting your famous homemade cookies or your world-class banana nut bread? Or might you want to give a gift of service, such as babysitting while a friend enjoys a night out or walking your neighbors’ dog.

Create an experience – Consider a family experience including playing games, attending a play, driving through holiday lights, or volunteering at a local house of worship, shelter, food pantry, etc.

Try a new way to dine – Let the dinner host prepare the main entrée while guests bring side dishes or consider planning a potluck to reduce the responsibility and expense of the entire meal.

Rethink gift giving – Consider an adult gift exchange or give gifts to children only. If you set a reasonable gift limit, picking names and buying only for one adult can help you save money. Some families share gift ideas and try think of practical gifts that will be useful. If you have a gift that you’ve never opened or used but know the perfect person that would appreciate it, consider a meaningful regift.

Create a plan

If you plan to host a gathering, give gifts, visit family, or spend any significant amount of money, it’s best to create a plan as early as possible. Creating a plan is important to help you set realistic limits and stay within the limits. If you know what you are looking for and have created a realistic budget, you will be best prepared when you see a good deal. Depending on when you start shopping, you can take advantage of sales, special pricing, or special coupons. This makes your list and budget even more important

Commit to following your list. Make a list identifying each recipient. Your list will help you anticipate rather than react. Make lists and stick to them – no impulse buying! Before heading out to shop, check your balances and your list. Regularly check your list and mark your progress. You can even text your purchases or keep a running list in your phone. In order to stick to your list and plan, try to shop when you are energized rather than when you are hungry, angry, lonely or tired. Consider a shopping accountability buddy. Think about which stores you are willing to visit and how much time can you commit.

Set a realistic budget – Things add up quickly so this is one of the most important things you can do. Be sure you can afford the planned and budgeted amount. Identify the amount you are going to spend. Create a budgeting strategy that works for you. Tracking your holiday spending can be tricky but consider using a spreadsheet, the envelope method, or use banking apps. Keep your receipts in one place (envelope or coupon keeper). There’s no right answer… do what works for you.

Make a list and follow it – Only go to stores, even the grocery store, with a list. Aimless walking around can be dangerous. Make a list and include the max amount of money you want to spend. For example, “pajamas for sister: $20”. If you find something perfect but it’s over your limit, consider waiting 24 hours before making the purchase. This is one way to deter impulse shopping.

Comparison shop – The Rule of 3 still applies. Take advantage of the technological advances that put almost any store in the palm of your hand. Once you are out shopping, your smartphone camera can be used to recognize products or bar codes and check competitor prices. You may find that online prices are better but be sure to factor in the shipping charges. While some stores offer free shipping, consider searching for promotion codes and coupons for online and in-store purchases. You may also want to check the store’s price match policy.

Think about your credit purchases – Research has consistently shown that individuals spend more money when they use credit cards. If you enjoy shopping, be sure to manage your credit cards (before, during, and after the holidays) or alternatively, consider using cash or your debit card.

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