So, you’re thinking about getting that car you’ve been eyeing, or you want to take a well-deserved vacation. Maybe you’re going to college and need to set aside money for tuition and school supplies. Saving money will help you accomplish these and other financial goals. It can also help you create a safety net to fall back on in an emergency. You might wonder where to start though. But don’t fret! We’ve got you covered with these helpful tips for saving money.
1. Start by opening a savings account
Opening a savings account is a great first step to start saving money. With a savings account, you can set aside birthday, graduation, or Christmas money, and paychecks from your job to later spend on wants (like a car, the newest iPhone, or clothes) and needs (like food, housing, educational expenses, or childcare).
If you have a job, they likely offer direct deposit – which means your paycheck goes directly into your bank account. You can even ask if your employer can split your check into different accounts. Half of your paycheck, for example, could go into your checking account and the other half into your savings account. This is extremely helpful because there will be less temptation to spend the money in your savings, since the money goes directly into the account before you can touch it! Doing so can help you get into the habit of good saving throughout the rest of your life.
A good rule about how much to save from your paycheck is the 50/30/20 rule. The idea is to divide your income into three categories: 50% on needs, 30% on wants, and 20% on savings.
For example, say your monthly paycheck is $2000. $1000 would go towards your needs, such as rent, food, and gas. $600 would go towards your wants, such as video games, a new pair of dress shoes, or going out with friends. Lastly, $400 would go into your savings account.
To learn more about using the rule, check out this three-minute money coaching session.
2. Track your spending
Keeping a record of your spending can help make saving money easier. By tracking each expense, you can better understand where your money is going and if it aligns with your spending priorities and saving goals. It will also help you identify places you could save money. You can keep track of your spending on a weekly or monthly basis.
There are different budgeting apps you can use, such as Mint, Rocket Money, and YNAB. These apps help you automatically track your expenses, making it super easy to keep a budget. Some apps will link to your bank account, which will help you keep track of and categorize your spending.
If you like writing things down on paper, recording your spending in a journal is a great technique. Be sure to date your entries and list your spending into categories, such as food, transportation, clothing, and beauty. Keeping receipts, if you use cash, and referring to your online bank statements, if you used a debit/credit card, will help you track your spending.
You can also use a spreadsheet if you’re not into the old-school method of writing down your spending. The great thing about tracking your spending through a spreadsheet is that it automatically does the math for you!
Once you see where your money went for that week or month, you might realize how silly of an expense you made. Whether you spent money on food that ended up not tasting good or on a beauty product that wasn’t as good as TikTok made it seem, you’re more likely to become selective and careful with your spending if you see where your money is going.
3. Earn extra money to save
There are different and fun ways to make money. You can ask your parents if you can do more chores around the house. You can sell clothes you no longer wear on sites like Depop or at your local thrift stores. You can mow your neighbors’ lawns or shovel snow for a fee. If you don’t have a job, you can apply for a part-time job that you can work after school or on the weekends. You can even get a summer job to get out of the house and earn some moo-lah! Be creative with ways to earn money.
4. Create a list of trade-offs you’re willing to make
Saving money isn’t always about putting a specific amount into your savings. It’s also about swapping out things for a less expensive or free option. The key is figuring out trade-offs that won’t feel like a big sacrifice. For example, instead of buying coffee every other morning, consider buying it once a week. Pack lunch to eat on specific days instead of buying lunch.
Other trade-offs you can make are:
- Carpooling, using public transportation, or asking your parents to drive you instead of taking an Uber or Lyft
- Staying in and ordering a pizza with friends for a movie night instead of going out
- Buying a mini version of a beauty product you want to try before investing in the full size
5. Use student discounts
Whether you’re a high school or college student, many restaurants and clothing stores offer student discounts. Sometimes these places will ask to see your student ID or student email so you can get the discount, so be sure to have these. Also, some places might not advertise their student discounts, so be sure to ask. Using student discounts will help you save money since you will be spending less. Small amounts add up over time!
6. Set goals for yourself
Think about the things you want and need. Do you want that beautiful black purse you saw at the mall that’s $50, or that keyboard for your gaming set-up that’s around $100? Need to make payments on your new car or buy textbooks for class? Setting specific goals can help you identify how much you should set aside to save for a specific want or need. Consider breaking the cost down into smaller weekly or monthly goals. It will make saving feel more attainable.
Saving money might seem challenging at first, but as you keep saving and working toward your goals, you’ll see just how easy and rewarding it can be in the long run.
To learn more about saving, check out these resources:
- Becoming a Savvy Saver
- How to save money as a teenager (and pay for higher education)
- 13 Ways for Teenagers to Save Money With (or Without) a Job
Author: Stephanie Paz is a Tigua Indian of Ysleta del Sur Pueblo. She has a Bachelor of Science in Psychology from The University of Texas at El Paso and is working towards a Master of Public Health in Health Behavior and Health Promotion from New Mexico State University.
