Today you’re going to learn how to save money each month.
When money’s tight and costs keep climbing, putting anything aside for savings can feel impossible. For many people, covering monthly bills already feels like a stretch, let alone building an emergency fund.
Yet life has a way of throwing curveballs—unexpected medical bills, sudden job loss, or urgent home repairs. That’s why financial experts often recommend having at least three to six months’ worth of essential expenses saved up.
Unfortunately, most Americans aren’t there. A recent survey revealed that nearly 30% don’t have any emergency savings at all—the worst numbers in half a decade.
Still, saving money isn’t just for the wealthy or the ultra-disciplined. With some smart adjustments, anyone can start living a little leaner and putting something away for a rainy day. Here are a few practical steps to get started:
How To Save Money Each Month:
1. Know Where Your Money Goes
Before you can make changes, you need a clear picture of your current habits. For one full month, track everything you spend. Keep receipts, check your bank and card statements, or use a budgeting app that categorizes your expenses automatically.
Next, break your expenses down into fixed and flexible categories. Then divide each into needs and wants:
- Fixed Needs: These are non-negotiable monthly costs like rent, utilities, health insurance, or a car loan.
- Fixed Wants: Subscription services like Netflix, Spotify, or premium phone plans—nice to have, but not essential.
- Flexible Needs: Things like groceries or clothing. These vary each month but are necessary.
- Flexible Wants: Dining out, online shopping, concert tickets, or a hobby splurge—these are where small changes can make a big difference.
For example, if you realize you’re spending \$60 a week on takeout, that’s over \$3,000 a year. Cooking at home just a few more nights a week could cut that in half.
2. Build a Budget That Reflects Your Priorities
Start with your net income—what actually hits your bank account after taxes. Subtract all your fixed expenses. From what’s left, aim to save at least 10%, and if you can manage 20%, that’s even better. What remains is your spending budget for the rest of the month.
Now comes the reality check: does your current lifestyle fit within that limit? If not, it’s time to trim. The first place to look is your flexible wants—things you enjoy but don’t need. Could you cut back on streaming services? Brew coffee at home? Shop second-hand instead of buying new?
If your income is unpredictable—say you’re a freelancer or work hourly—take a six- or twelve-month average to create your baseline budget. Budget as if you’re earning on the low end, and save any “bonus” income for slow months or emergencies.
3. Practice the 24-Hour Rule for Big Purchases
Impulse buying is the enemy of a good budget. Before you spend a large amount, give yourself at least 24 hours to think it over. If it’s not a true necessity and you’re still thinking about it the next day, consider how it fits into your budget.
What counts as a “big” purchase depends on your financial situation. For some, that might be a \$500 phone or a new couch. For others, it might be a \$50 video game. One way to decide: if the purchase would force you to dip into savings or put off paying a bill, it’s probably worth reconsidering.
Instead of buying on a whim, try creating a “want list.” If you still want the item after a few weeks—and you’ve saved for it—then go for it. You might be surprised how many things lose their appeal with time.
4. Cut Down on Energy Costs
You don’t need to make massive changes to start saving on utilities. Small shifts in how you use electricity and heat can lead to real savings:
- Seal leaks around doors and windows to keep indoor temperatures stable. It can reduce your heating and cooling bills by a noticeable margin.
- Adjust your thermostat: Try setting it a few degrees higher in the summer and lower in the winter. Each degree can shave money off your bill.
- Unplug electronics when they’re not in use, especially chargers, microwaves, or gaming consoles that pull power even when off.
- Switch to LED bulbs, set your computer to energy-saving mode, and turn off lights when leaving a room.
- Invest in energy-efficient appliances when it’s time to replace old ones. While the upfront cost might be higher, the long-term savings on your energy bill will make up for it.
Even minor adjustments, like air-drying clothes or washing laundry in cold water, can reduce your electricity use over time.
5. Rethink Your Service Plans
It’s easy to stick with the same phone, internet, or insurance provider for years simply out of habit. But loyalty doesn’t always pay when it comes to monthly services. Providers regularly change their pricing structures, add promotions, or launch cheaper plans—and unless you ask, you probably won’t benefit.
Set aside an hour to review your current plans. Do you really need unlimited data on your phone? Could you downgrade to a basic cable package, or drop it altogether in favor of a cheaper streaming service? Have your driving habits changed since you signed up for auto insurance? You might be overpaying for coverage you no longer need.
Call your provider and ask about promotions, loyalty discounts, or plan adjustments. Let them know you’re shopping around—they may offer to match or beat a competitor’s deal just to keep your business. One woman saved \$240 a year by switching to a smaller cell phone company that used the same network. Another reduced her car insurance by 18% just by increasing her deductible and removing optional coverage she didn’t need anymore.
6. Choose a Car That Saves You Money, Not Just Looks Good
Buying a car is one of the biggest purchases most people make—but it’s also one of the most common ways people accidentally overspend. A shiny new SUV may feel great to drive, but if it guzzles gas and costs a fortune to insure, you’ll pay for that thrill every month.
Instead, focus on long-term value. Look for cars with strong reliability ratings, low maintenance costs, and good fuel economy. A used Toyota Corolla or Honda Civic, for example, can often last well past 200,000 miles with minimal upkeep. If you commute daily, a fuel-efficient hybrid or compact car can save you hundreds each year at the pump.
Don’t forget to research total ownership costs—insurance, registration, fuel, and repairs—not just the sticker price. You might find that a slightly more expensive car saves you more in the long run.
7. Revisit Your Mortgage Terms
Your mortgage is likely your biggest monthly expense—so even a small reduction in interest rate can make a big difference over time. If your credit score has improved since you bought your home, or if interest rates have dropped, refinancing your mortgage might be a smart move.
Let’s say you took out a \$250,000 mortgage at 6%, and a few years later you qualify for 4.5%. That could shave hundreds off your monthly payment or allow you to pay your home off years sooner—saving tens of thousands in interest.
Before refinancing, factor in closing costs and fees. Sometimes the break-even point (when the savings outweigh the upfront costs) takes a few years. Talk to your lender and run the numbers—or speak to a trusted financial advisor to be sure it’s worth it for your situation.
8. Eat Smarter, Not Just Cheaper
Food is one of those necessities that can quietly drain your bank account if you’re not paying attention. Grabbing lunch out every day, ordering delivery three nights a week, or buying a cart full of processed snacks can rack up hundreds in extra spending each month.
A simple habit shift—like meal prepping for the week—can save you a significant amount while improving your diet. For example, cooking a big batch of chili or stir-fry on Sunday can give you healthy lunches all week for under \$3 a serving. Compare that to \$12 takeout meals, and the difference adds up fast.
Buy whole foods when possible—beans, rice, frozen vegetables, and eggs are often cheaper and more filling than processed alternatives. If you’re worried about time, choose recipes with five ingredients or less, or invest in a slow cooker to make meals while you’re busy.
Even small steps help. Swapping one restaurant meal per week with a home-cooked dish can save over \$1,000 a year.
9. Master the Art of Smart Shopping
Shopping sales isn’t just for extreme couponers. With a bit of planning, you can save money without changing what you buy—just how and when you buy it.
Check grocery store flyers or apps before you shop. If chicken breast or pasta sauce is on sale, plan your week’s meals around it. Over time, you’ll learn the price cycles for your favorite items and stock up when they’re at their lowest.
When buying in bulk, only grab what you’ll use before it expires or spoils. Buying five loaves of bread that go moldy isn’t saving—it’s wasting. And always look at the unit price—the cost per ounce, pound, or liter. A smaller size is sometimes the better deal, especially if it goes on sale more often.
Brand loyalty can also cost you. Switching from a name-brand cereal to the store’s generic version could save you \$1–2 per box, with no noticeable difference in taste.
Put simply: a few minutes of strategy before you shop can lead to big savings over time.
10. Cut Back on Entertainment—Without Killing the Fun
Entertainment is one of the easiest areas to overspend, often without realizing it. From streaming services and concert tickets to weekly bar tabs and pricey outings, these costs can quietly drain your budget. The good news? They’re also the easiest to adjust without sacrificing your social life.
Start by rethinking how you hang out with friends. Instead of another \$80 night at a loud restaurant, suggest a backyard barbecue where everyone brings a dish. Swap the movie theater for a living room movie night—complete with homemade popcorn. Join a local board game group or trivia night at a café instead of shelling out for club cover charges.
Even solo activities can be cheaper. Instead of spending \$50 on a new video game, check out free titles or use a game subscription to access dozens of games for less. If you love concerts, look for free music festivals or open mic nights in your city. The idea isn’t to remove joy—it’s to choose the fun that doesn’t wreck your finances.
11. Audit Your Subscriptions
We’ve entered the era of “subscription creep.” That \$4.99 a month might not seem like much—until you realize you’re paying for five streaming platforms, a meditation app you never use, and a monthly sock delivery you forgot you signed up for.
Take 20 minutes to list every subscription you pay for. Then ask yourself: “Do I actually use this?” If not, cancel it. You can always re-subscribe later if you truly miss it.
Even services you use can be trimmed. Streaming only one or two shows? Downgrade to a cheaper tier. Rarely read those three digital news subscriptions? Pick your favorite and cut the rest.
It’s easy to let these expenses slide because they’re small, but if you trim \$30–\$50 a month, that’s \$600 or more a year right back in your pocket.
12. Sell What You Don’t Use
Chances are, you’ve got stuff sitting around that could be worth cash: an old guitar collecting dust, a barely used blender, or clothes you haven’t worn in two years. Turn your clutter into cash by selling items you no longer need.
Use apps like Facebook Marketplace or OfferUp for furniture, appliances, and other bulky items you’d rather not ship. For smaller, shippable items like vintage clothing or electronics, try eBay, Poshmark, or Mercari. Don’t forget local consignment shops, either.
Got a rare item? Take time to research its value—some collectibles sell for far more than you’d expect. Just keep in mind that not everything is worth the effort to list, package, and ship. If it only sells for \$2, consider donating instead.
One smart tip: treat this as a windfall. Don’t count it toward your regular income. Instead, funnel it straight into savings to help build that emergency cushion faster.
13. Start a Simple Side Hustle
If you have free time and even one marketable skill, there’s probably a way to turn it into extra income. Babysitting, pet sitting, house cleaning, or tutoring can all earn decent money without requiring huge startup costs.
Have a knack for crafting or design? Sell handmade jewelry, digital downloads, art prints, or customized mugs through platforms like Etsy or Redbubble. Enjoy writing or photography? Offer your services as a freelancer. Even walking dogs or assembling IKEA furniture for neighbors could become a steady source of cash.
The key is to keep it low-cost and low-risk. Use tools and materials you already have. Build slowly. Avoid investing thousands in a side business before you know it works. Many people find they start saving money automatically—if you’re tutoring on Saturday mornings, that’s time you’re not spending at brunch or shopping online.
14. Monetize Your Space
If you’ve got more room than you need, it might be time to turn that extra space into cash. Renting out a spare bedroom—even a small one—can bring in several hundred dollars per month in many cities. If you’re not up for a long-term arrangement, you can explore short-term options like Airbnb.
Before you list anything, check your lease, local regulations, and homeowner association rules. Some cities require permits or limit short-term rentals, and most landlords require written approval before you sublet.
If you’re going out of town for a week or traveling for work, consider renting your place temporarily. During major events—music festivals, conferences, or sports championships—your home could be in high demand. One Austin resident made over \$1,000 in five days during South by Southwest by temporarily relocating to a friend’s place and renting her apartment.
Just be careful about whom you rent to. Vet guests or tenants properly, consider a security deposit, and protect yourself with written agreements. Your safety and peace of mind are just as valuable as the rent check.
Summary:
Saving money each month might feel overwhelming—especially if you’re already stretched thin by bills, rent, and daily expenses. But building financial stability doesn’t require drastic changes overnight.
Instead, it’s about making smart, consistent choices that gradually reduce spending and increase savings. Here are practical, everyday strategies to help you take control of your finances and grow your savings one month at a time:
1. Track Your Spending
- Categorize expenses into fixed vs. flexible, and needs vs. wants.
- Use apps or bank tools to monitor where your money goes.
2. Create a Realistic Budget
- Base it on your net monthly income.
- Aim to save at least 10–20% of that amount.
- Adjust your spending by reducing wants before cutting needs.
3. Avoid Impulse Buys
- Pause before big purchases—sleep on it.
- Define what “big” means based on your income.
4. Cut Energy Costs
- Insulate your home, adjust the thermostat, unplug unused electronics.
- Buy energy-efficient appliances.
5. Lower Service Costs
- Shop around for better deals on insurance, phone, and internet.
- Negotiate with your current providers.
6. Buy a Fuel-Efficient, Reliable Car
- Choose models with good mileage and low maintenance costs.
7. Refinance Your Mortgage
- If your credit has improved, consider refinancing for lower rates.
8. Be Smart About Food
- Cook meals at home instead of dining out.
- Plan meals, avoid waste, and choose budget-friendly nutritious options.
9. Shop Sales Strategically
- Buy non-perishables in bulk only when storage and usage make sense.
- Focus on lowest cost per unit, not package size.
10. Cut Entertainment Costs
- Host low-cost gatherings like potlucks or movie nights.
- Choose free or cheap local activities.
11. Review Subscription Services
- Cancel what you rarely use.
- Downgrade plans to match actual usage.
12. Sell Unused Items
- Declutter and turn old belongings into extra cash.
- Sell locally or online depending on the item size and value.
13. Start a Low-Cost Side Hustle
- Babysitting, pet-sitting, freelancing, or selling crafts are good options.
- Use your existing skills and materials to avoid upfront costs.
14. Rent Out Extra Space
- Sublet a room or rent your home short-term when traveling.
- Follow local laws and vet tenants carefully.
Each strategy contributes to freeing up cash—either by cutting costs, earning more, or avoiding unnecessary spending—so you can build a safety net and reduce financial stress over time.
