How to save money: 9 ways to start today

We've all been there. You set a goal — a vacation, emergency fund, down payment on your dream home — and start saving, but then you realize it will take longer to reach than you thought. According to the Citizens' Next Gen: Future of Success Survey*, only 9% of young adults feel fully in control of their spending. Our survey also found that 54% cited impulse shopping as a challenge, and 47% admitted they don't budget. The research also found that more than half (57%) say stress about money affects their mental health, and 44% succumb to social pressures that influence their overspending.

Determining how to save money fast requires careful assessment of your income and expenses — and a strategy to reach your goal. Growing your savings is possible, but it takes focus and discipline to make it happen. You can develop an effective game plan by following a few simple steps.

1. Identify and set your savings goals

Saving money fast does require sacrifices, which may be difficult at times, but remembering your savings goals can help you stay focused. It's easier to stay motivated when you set goals such as:

• Buying a new car
• Saving for a house or renovations
• Paying off credit card debt
• Enrolling in college
• Planning for an upcoming vacation
• Developing an emergency fund

After you've identified a goal, you need to determine how much you need to save and how long you need to reach it. For example, if you want to save for new kitchen appliances, you might set a budget of $5,000 with a timeline of one year. This would mean you need to save about $417 per month.

2. Build and review your budget

You'll need to have a clear picture of your monthly income and essential monthly expenses (mortgage or rent, utilities, car payment, insurance, etc.). This will help you understand how much disposable income you have to work with when mapping out your savings plan.

If you already have a budget, you will need to adjust it with your new savings goals in mind. If you don't have a budget, you will need to create one to know where your money is going.

Here are some budgeting strategies to consider:

• 50/30/20 budget: Your after-tax income is divided into three categories: 50% for your essential needs, 30% for your wants and 20% for your savings.
• Zero-based budget: Assign every dollar a purpose so income minus expenses, savings, and debt equals zero.
• Pay-yourself-first budget: Part of your income is set aside for your savings before you pay your bills each month.
• Envelope budgeting method: Each month, you place the cash for each budget category in a digital or real envelope (groceries, entertainment, etc.). Once an envelope is empty, you can't spend more in that category until the next month.

3. Keep debt in check

Debt can make saving difficult. Using credit cards or "buy now, pay later" may seem convenient, but interest charges can quickly increase costs and reduce your ability to save.

To grow savings faster, avoid new debt unless absolutely necessary and consider a debt consolidation loan to combine multiple debts into one payment with possibly lower interest rates. For long-term loans (student, auto, mortgage), keep making regular, on-time payments or explore refinancing options to reduce costs.

4. Cut everyday expenses

One of the simplest ways to save money is to avoid overspending. Cutting back doesn't mean you have to give up everything you enjoy. It's about finding creative ways to spend less without feeling deprived.

Here are some practical ways you can keep more money in your pocket:

• Bring your lunch to work instead of eating out
• Skip the coffee run
• Look for affordable entertainment like free events
• Buy used items when possible
• Create a meal plan and shop with a list at the grocery store
• Cancel unused subscriptions, streaming services and memberships

5. Automate your savings

Automating your savings helps reduce the temptation to spend money you intend to set aside. Here are two easy ways to do it:

• Direct Deposit: Allocate a portion of each paycheck directly into a savings account.
• Automatic Transfers: Schedule monthly transfers from your checking account to your savings account.

6. Use apps to simplify saving

Apps can make saving even easier. For example, the Citizens Savings Tracker® lets you:

• Set and track savings goals.
• Enroll in automatic recurring transfers.
• Use the Round Up feature, which rounds debit card purchases to the nearest dollar (with an optional extra amount) and transfers the difference to your savings.

7. Ways to earn extra income

Use free time and side hustles to earn extra income; small amounts can significantly boost your savings over time.

Here are some opportunities to consider:

• Get a side job during your free time
• Resell items you no longer need online
• Freelance your skills or specialties
• Rent out a room or storage space you aren't using
• Tutor students at local schools or independently
• Sell handmade items or custom designs
• Offer pet sitting, grooming or dog walking services

If your credit card or debit card offers cash back rewards, you can also take advantage of it to earn extra money on essential purchases. This strategy only makes sense if you can pay off the credit card balance each month to avoid interest charges.

8. Explore CDs or high yield savings accounts

The use of savings accounts is common because they are easy to set up and have low minimum deposit requirements, but other investments may offer higher returns. It depends on your timeline and financial goals. Two options to consider are high-yield savings accounts and certificates of deposit (CDs).

High-yield savings accounts typically offer much higher interest rates than traditional accounts and are often provided by online banks. Federal regulations allow up to six withdrawals per month. Certificates of Deposit (CDs) guarantee returns if you keep your money locked in for a set term, ranging from a few months to several years.

9. Try a no-spend challenge

Saving money does not have to be intimidating; in fact, it can be a fun challenge for yourself! Consider trying a no-spend challenge where you commit to only spending money on essentials and avoid non-essential purchases.

This challenge can be for a set period of time and can be for a day, a week, or whatever makes sense for your goals. This is also a great option to boost savings, resent spending habits, and build awareness of spending habits.

Start saving now to achieve your goals

You can learn how to save money with the right strategy and discipline. By assessing your spending, looking for ways to earn more, using financial tools and maximizing the interest you earn, you can make significant progress toward your goals in less time.

Ready to take your savings to the next level? Citizens offers a range of savings accounts to help you save smarter and achieve your goals. Explore our savings accounts today to find the perfect fit for your needs.