You find yourself living paycheque to paycheque.

The debt keeps piling up. If an emergency were to happen, you would not have the money to cover the costs.

You know the importance of saving money, but don’t know where to begin. 

Don’t worry, I’ve got you. 

These 5 simple steps will help you jumpstart your saving journey.

How to save money, when you don’t know where to start.  

• Get in the right mindset 

• Track your spending

• Cuts 

• Automate

• Do not give up

 

Saving money can be intimidating, especially when you first start saving money. 

The following steps can help you overcome this hurdle realistically, so you can tackle all those savings goals. 

1. Mindset 

First things first, getting into the right mindset, will make starting to save money much easier.

Yes, we all know we should be saving money. 

Yet when it is so easy to use credit, we have to make a conscious effort to save, and that starts with the way you think. 

Why are you saving money? 

Whatever your why is, you must remember it, write it down somewhere, keep it in your phone or wallet.  Have it at the forefront of your mind. 

 

Do you want to tackle your debt?

Saving for your dream wedding?

New baby coming? Sending your first off to college? 

Wanting to retire early? 

Just want to worry less about bills, and have financial security? 

 

Anytime you fall off your money-saving-wagon, you can stand up, dust yourself off, and get back on, with the help of your why. 

 

Okay, so you have your Why, now what? 

Now we are going to turn that Why, into an achievable goal. That’s right we are setting a goal.

Ew. I know. 

Goal setting.  What is this high school? 

I am not a huge fan of goal setting myself, but it’s worked so far. 

To Start

 

Pick an amount you want to save/payoff, and a date by which you want to reach that number.

Make it realistic, you won’t be saving $5,000 by next weekend  (If you are please, let me in on your secret).

Once you have a number and a date it is time to do some basic math. 

I know. (I have a love hate relationship with math). 

Let’s say my Why is saving up for a car. 

I don’t want to buy new, and I’ve seen some fairly recent models, selling used for around $5,000. 

It’s early December, but I know I will need the car by September when school starts up again.

That gives me 10 months to come up with the $5,000. 

$5,000/10 months= $500 

Now I know that I have to put away $500 a month for ten months to afford the car.

 To make it less intimidating, break it down into weeks. That would only be $125 a week.

 Or to break it down EVEN further it would be around $18 a day. 

With my goal in mind, I can make small changes to my purchases, cut costs, or take a little off each paycheque to put towards my goal.

Make sure to keep reminding yourself of your Why, the more you visualize it, the more likely you will follow through.  

 

 

2. Track 

The second step of how to start saving money is to figure out how much of your hard earned dollars you spend.

 Keep track of your expenses. 

 

ALL of them.

 From your morning coffee, to that notebook you picked up at the dollar store (which was super cute, but you really didn’t need it, because you already have a stack of notebooks at home…Just me?) .

 It all adds up.

I know. You’re probably thinking that sounds like a lot of work.  

Start small, start today. Get a notebook (that one you picked up at the dollar store will do just fine), enter it in your phone notes, calendar or you can even download an app. 

I usually collect all my receipts then add them to my tracker every few days.

Just a warning, once you total up your spending for the month it may come as a shock. 

And maybe even a wakeup call.

It was for me the first time I ever calculated my spending.

I was 18, had my first job, working retail. I had my first ever credit card. 

I used it responsibly, I would only buy what I knew I could afford. I even shopped the clearance sections, and with coupons.

However I still spent money on useless stuff.

I was hoarding all my Visa statements. One day curiosity got the best of me. So I took a good handful of them, and I began to add them up. 

When I saw that they totalled over $1,000, my jaw dropped. 

I still had a box full of statements, yet It already totalled more than I ever could have imagined.

What did I have to show for it?

A room full of craft supplies.

All of which I had bought on clearance, or for $5 and under. 

I was in shock.

I knew I had to make a change.

So from then on, I wrote down every penny I spent. I then would subtract my total amount spent from my paycheque amount. It was nothing fancy, but it did the job. 

 

Start tracking your spending. Make sure to check credit card and bank statements, to make sure you don’t forget anything.

 

Organize by categories, such as home, bills, groceries, eating out and so on. By dividing what you spend into categories, you can see where most of your money goes. 

Besides bills, my highest cost is always food, and I don’t think that will ever change. (I like food, what can I say). 

Now that you know where your money is going, now it’s time to take out your scissors and trim your spending habits.

3. Make some cuts

You knew this was coming right? 

One of the first steps to financial freedom is cutting expenses.

Once you are able to cut back your spending, you’ll have more money to work with.

That extra bit of cash you have after cutting back can be used to pay off your debt, start saving for all those fun things or even to start investing for retirement. 

Now I know cutting expenses may sound like no fun at all. 

You will have to determine what is a need vs. what is a want. 

Housing and food are some must haves, but that new purse can wait (for now).

 I’m not saying you should cut out all non-essential items, or never buy another thing again.

 But I encourage you to make conscious decisions about your purchases. 

When most people talk about reducing costs, they make it seem as though it is best to cut cold turkey, meaning no spending on anything unnecessary.

That is a lot harder than they make it seem. 

Not everybody has that kind of willpower. 

If you are  just starting out, you might not last very long. 

You may end up splurging on those shoes that you really didn’t need.

Or decide to go to ‘All you can eat Sushi’,  three times a week (Been there, done that, no regrets).

 

I find it easiest to make simple swaps to save money here and there.  

 

I’m not going to tell you to skip the Starbucks, or that you can make it at home. 

Obviously you know that it is cheaper and could be done. 

But perhaps try going down a cup size, or skip that extra pump of caramel. 

When going out to eat with the girls, skip the drinks, or apps, or better yet share dessert. (Non covid times of course).

 

These little swaps will add up trust me.

 

4. Automate your savings

 

We are lucky to have the convenience of automation, making step four an easy one. You can set your bills to be paid automatically, meaning you will never miss a payment again. 

You can even set up monthly pre-authorized payments, or transfers between bank accounts, to allow for easy saving. 

 

Depending on what kind of wiggle room you have in your budget, start with $5 or $10 a month to go into your various savings accounts.

Then at the end of the month, throw any extra from bills, groceries, or saving on takeout, into your savings account. 

Eventually you will be able to work your way up to $25, $50, $100 a month that can go into your savings account..

I have money automatically transferred each pay, into my Retirement Account, my Tax-Free Savings account, and my emergency fund savings account. 

This definitely helps with willpower. 

 

 

 

5. Do not give up

 

The last step is to not give up.

Stick with it.

The easiest way to stay committed is to avoid temptations. 

Always swiping that credit or debit card?

Freeze them, hide them, lock them in safe. Try using cash for a bit, and see how far you can stretch $100.

When you go grocery shopping, reduce temptations. If you know you always end up buying a cart full when you wander every aisle, create a shopping list and stick to it, and only shop the areas you need to.

If you know you’ll end up spending money if you go wandering the mall on the weekend, choose to walk somewhere in nature or leave your wallet at home. 

 

Once you start implementing these 5 steps and making small changes, you’ll get better and better at saving.  Don’t give up.

So to recap how to start saving money, keep your goals in mind, track your income and expenditures, cut back where needed, make your life easier with automating your savings, and last and probably most important keep going. 

 It’s addicting.

 Believe me.

 Once you see your bank account grow, you will look for more ways to save money.

 

 

 

What are you saving for? How do you keep track of your finances? 

Let me know in the comments below:

Until next time,

Stay Frugal,

 

Connie