Practical Saving Techniques for Beginner Budgeters

Are you struggling to manage your finances? Are you living from paycheck to paycheck with little to no savings? You’re not alone. Starting with budgeting and managing your money can be challenging, especially for beginners. 

Step 1: Identify Your Financial Priorities

The first step in setting a savings goal is to identify your financial priorities. This can vary from person to person depending on their current financial situation and personal aspirations. For example, if you have debts that are accruing high interest rates, your priority should be paying off these debts before setting other savings goals. If you have a stable income and no pressing debts, you can prioritize building your emergency fund or saving up for a down payment for a house. 

Remember, a savings goal gives the purpose and direction of your saving efforts. It will keep you motivated and help you stay on track even when facing obstacles along the way.

Step 2: Determine The Amount Needed

Once you have identified your financial priorities, the next step is to figure out how much money you need to achieve your goals. This involves breaking down the total cost of the goal into smaller, manageable chunks. For example, if you want to pay off a debt of $10,000, you can set a goal of paying $500 per month over 20 months. Similarly, if you want to buy a car for $20,000, you can set a savings goal of $400 per month over 50 months.

Step 3: Create a Savings Plan

Now that you have identified your financial priorities and determined the amount needed, it’s time to create a savings plan. This plan should include the specific actions you will take to achieve your goals. This may include controlling your spending, allocating a portion of your income to savings, and seeking additional sources of income. 

You can reduce your monthly entertainment expenses by cooking at home instead of eating out or changing from your daily Starbucks to a freshly brewed coffee at home. 

Do you need premium cable or a gym membership? How often do you use these? Consider alternatives or downgrade to a more affordable option.

Taking advantage of discounts and coupons is another great savings hack for beginners. There are plenty of opportunities to save money through discounts and coupons, both online and in-store. Websites like Honey and RetailMeNot are helpful resources to find these codes.

You can also consider ways to increase your income, such as a side gig or freelance work. Subscribe so you don’t miss an upcoming blog on identifying the perfect side hustle for you.  

Step 4: Automate Your Savings

One of the easiest ways to ensure you reach your savings goals is to automate your savings. An automatic transfer to a dedicated savings account each month is all you need to get started. By doing this, you won’t even have to think about saving, it’ll be done for you automatically. It’s important to choose an affordable amount, so you don’t overdraft your account or fall behind on other bills.

Step 5: Track Your Progress and Make Adjustments

An essential aspect of setting savings goals is tracking your progress regularly. This helps you stay on track, identify areas where you are falling behind, and make necessary adjustments. You can track your savings progress using various tools, including budgeting apps, spreadsheets, or pen and paper. If you find that you’re not reaching your goals as planned, you can adjust your savings plan by decreasing your spending or increasing your income.

Step 6: Celebrate Your Achievements

Finally, once you achieve your savings goals, you should take time to celebrate your achievements. This helps you stay motivated, appreciate your hard work, and look forward to setting new goals. Celebrating your achievements can be as simple as treating yourself to your favorite meal or taking a relaxing vacation.