It’s Budget Time: How to Save Up Money Fast

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Wondering how to save up money fast? 

Having a budget and being serious about sticking to it is a quick way to saving big money.

Automating savings and cutting your expenses can also help you reach your savings goals faster.

Check out these tips for saving money fast.

Track Your Income and Spending

It’s impossible to make smart money decisions if you don’t know your financial situation. 

Start with the total coming into your household. If you have a regular job where your employer takes out taxes and gives you a pay stub, it’s easy to total your income.

If you’re an independent contractor or run your own business, tracking income can be a little more challenging. Create pay stubs online to help keep track of the money coming in from your business.

Then, total up what you’re spending on a regular basis. Your bills and recurring expenses are easy to track down.

Looking at your discretionary spending can be more challenging. Start saving your receipts and tracking where that money goes.

Check for excessive spending in certain areas. The average food spending per person varies from $165 to $345 each month. If you notice you’re on the higher end or beyond the average, focus on tackling that spending issue.

Set Savings Goals

Knowing why you want to save money fast can help motivate you to make smarter spending and saving decisions.

Write down the reasons you want to save money. Common goals include paying off debt, building an emergency fund, growing retirement savings, or paying for something specific, such as a vacation or home improvement project. You can have more than one goal at the same time.

Calculate the dollar amount that you want to reach for each goal. Create a tracking sheet where you enter the amount you save to help you see your progress and know when you reach your goal.

Prioritize Your Goals

With the financial goals set, decide how you want to prioritize them. You can put a little money toward each goal, or you might focus on one goal first, then move to the next.

A good place to start is building an emergency fund and paying off debt. Having an emergency fund gives you a backup so you don’t have to rely on credit when unexpected expenses happen. Paying off debt saves you on the interest you pay each month.

If you’re allocating money toward multiple goals, decide how much to put toward each goal per month. 

Schedule Automatic Savings Transfers

The longer your money stays in your bank account, the easier it is to spend it instead of saving it. Eliminate the temptation by setting up your account to transfer money into savings automatically. Time it so the money goes into savings the same day you get paid.

An easy way to keep your savings straight is to start multiple savings accounts, one for each goal. You can schedule specific amounts to go into each savings account for an automatic savings plan.

Reduce Your Living Expenses

Your current living situation dictates a large portion of your budget. You have to pay your rent or mortgage, utility bills, and other basic expenses. If you have a car loan, student loan, or other types of loans, you have to make those monthly payments.

Consider changing some aspects of your living situation or find ways to reduce those expenses to have more money to go to savings.

A big money-saver for many people is moving to a more affordable home. If you’re not able to move, look into refinancing your mortgage.

If your car is too expensive, consider trading it in for a more affordable model. You can not only cut your car payment, but the switch might also lower your car insurance.

Shopping around for services is another way to cut your expenses. A different insurance company might offer lower rates. If you have multiple options for internet providers, cable, trash service, or other providers, compare pricing.

If you don’t want to switch those services, try calling your current provider to ask if they can give you a better deal. Companies are often willing to cut you a deal to keep your business.

Cut Excess Spending

One of the biggest money wasters for many people is discretionary spending. You go to the store for toilet paper and end up with a cart full of home decor, clothes, and other extras. Or you get the things on your grocery list plus another $50 worth of splurges.

Dining out and entertainment expenses can also throw your budget off quickly.

When creating your budget, set a hard limit on each of those spending categories. Track what you spend to make sure you don’t go over the limits.

Challenge yourself to spend as little as possible. If you give yourself $600 per month for groceries, see if you can eat on $400 for the month. Making it a game can help you stay on track.

Minimize Spending Temptations

If you have trouble avoiding excess spending, reduce the temptations.

Ordering your groceries online for delivery or pickup keeps you out of the store, so you’re less likely to add extra items to your cart.

Unsubscribe from store email lists. The deals they send you make it sound like you need to go shopping. But even if you save money on the purchase, you’re still spending cash you wouldn’t have spent otherwise.

Use mental tricks to discourage spending. An easy one is forcing yourself to wait at least 24 hours before you make any unplanned purchases. Many times, you’ll decide you don’t really need it.

Calculate how much you earn per hour at your job. When you want to make a splurge purchase calculate how many hours you’d have to work to pay for it by dividing the price by your hourly wage. Decide if the item is worth that much of your time.

Allocate Large Unexpected Sums Wisely

You should have your regular income budgeted each month, but sometimes you’ll get a large sum at once. That could be in the form of a tax return, birthday money, or bonuses at work.

Plan ahead for how you’ll allocate that money. If you don’t plan for it, you’ll be tempted to blow it on fun things.

Putting that money directly into savings helps you reach your goals faster. Since it’s extra money beyond your regular income that covers your expenses, you won’t miss it if you put it all toward savings.

Read More to Learn How to Save Up Money Fast

Learning how to save up money fast often takes multiple approaches. The more ways you tackle your money-saving goals, the faster you’ll reach them.

Scope out our money archives for more advice on how to manage your finances.