Ready to start saving money? These 10 simple tips for beginners will help you build better financial habits, cut expenses, and reach your savings goals. Perfect for anyone just starting their money-saving journey.
Saving money can be hard, but it doesn’t have to be – and often isn’t – impossible. The simple truth is that it’s all about acting wisely, starting small and making a few changes that lead to big results in the long run. I am a big fan of “the long run” because expecting instant results leads to failure more often than not whereas being patient and building slowly can help you show successes far beyond what you ever imagined.
No matter what you’re saving for; unexpected expenses, a special purchase, a big ticket need or simply more wiggle room in your budget, learning how to save money is a skill anyone can become a pro at. All it takes is a little patience and a good starting plan.
How Should a Beginner Start Saving Money?
If you’re just getting started, the key is to focus on frugal living tips and money saving trick’s that are easy to put into place without making you feel overwhelmed. The reasoning is simple; if you’re feeling overwhelmed, you’re more likely to give up. And if you give up, you’ll never reach your goals.
If you’re very new to learning how to save money, breaking the process down into steps can help you get off to a great start. The first step is to make sure you have a savings account where you can keep money that you save. I personally use a savings account – yes, an actual savings account – through both CashApp and Varo.
Why?
Because both are high-yield savings accounts that give me a very good interest rate when I have a set amount of money direct deposited into them each month, neither have balance minimums and both are insured by the FDIC.
Once you’ve done that, do a budget update and try to set aside a small amount of savings from each paycheck. You don’t need to start big—saving even $5 or $10 a week can make a difference over time. The key is to build the habit of saving regularly, no matter how small the amount.
Another simple way to start is by collecting any extra cash, like loose change or small windfalls, and putting it into a dedicated savings jar or account. Keep it separate from your spending money so it’s not easily accessible. Remember, when it comes to saving money, small actions add up and it is absolutely worth the time spent to reach your financial goals.
Focus on being patient and consistent. Remember, the long term reward is seeing those small amounts grow into something significant.
1. Start with a Clear Goal
Whether you’ve been saving money for decades or you’re just beginning, staying motivated is a must. Whether it’s for an emergency fund, a family vacation, or paying off debt, you must have a clear goal for what the money you’re saving is meant for. Take a few minutes to write down your goal and figure out how much you’ll need to reach it. For example, if you’re saving $1,200 for a trip in six months, you’ll need to set aside $200 a month, or about $50 a week.
I highly recommend you use a savings tracker to track how much you’ve saved to date. I like using a printable savings tracker such as THIS one, but feel free to use whatever works best for you and yours. The visual reminder of how much you’ve saved will help motivate you to keep going.
2. Track Every Dollar You Spend
Before you can save money, it’s important to understand where your money is going. Tracking your spending can often seem like a waste of time, but it’s a very important and simple way to identify areas where you can cut back or are wasting money.
For a week or two, write down everything you spend, from your morning coffee to your grocery bill. You can use a plain notebook, an account ledger book like I use, a spreadsheet like what Tiller Money helps you create, or a budgeting app —whatever works best for you.
Once you have a clear picture of your spending habits, look for patterns. Are you eating out more than you realized? Spending too much on subscriptions like your phone, cable and streaming services? Do you have too many impulse buys? By tracking your expenses, you’ll find opportunities to save that you might not have noticed before.
3. Create a Realistic Budget
A budget is one of the most powerful tools for saving money. Think of it as a plan for how you want to spend and save each month and luckily, creating a basic family budget isn’t hard to do. Start by listing your income and all your expenses, including bills, groceries, and even fun money. Be honest about your spending so your budget is realistic.
Once you’ve accounted for everything, set limits for non-essential spending, like eating out or entertainment. Make saving a priority by including it in your budget as if it’s another bill you have to pay. Even if you can only save a small amount each month, it’s a step in the right direction.
What is the 50/30/20 Budget Rule?
The 50/30/20 budget rule is a simple and effective way to manage your money by dividing your income into three main categories.
First, 50% of your income goes toward “needs,” like rent, utilities, groceries, and other essential expenses.
Next, 30% is allocated to “wants,” such as dining out, entertainment, or hobbies—things that make life enjoyable but aren’t necessary for survival.
Finally, 20% is dedicated to savings and paying off debt, helping you build financial security and work toward your goals. This rule provides a clear framework to balance spending and saving, making it easier to take control of your finances without feeling too restricted.
Is the 50/30/20 Rule a Good Idea?
The 50/30/20 rule can be a great starting point for budgeting because it’s straightforward and easy to follow. It helps you create balance by prioritizing essentials, allowing room for enjoyment, and ensuring you’re saving for the future. However, it might not work perfectly for everyone. If you have a lower income or live in an area with a high cost of living, you may need to dedicate more than 50% to your needs.
On the other hand, if you’re focused on aggressive savings goals or paying off debt quickly, you might want to adjust the percentages. The beauty of the rule is that it’s flexible—you can tweak it to fit your financial situation while still using it as a guide to make smarter spending and saving decisions.
4. Cut Back on Unnecessary Expenses
Take a close look at your spending to identify areas where you can cut back. Do you have subscriptions or memberships you’re not using? Cancel them. Are you eating out a little too often? Try cooking more meals at home. Small changes like these can free up extra money in your budget without feeling like a huge sacrifice.
Another simple way to save is to shop smarter. Look for sales, use coupons, and compare prices before making a purchase. Even switching to store-brand products instead of name brands can add up to significant savings over time.
5. Build an Emergency Fund
An emergency fund is your financial safety net for unexpected expenses, like car repairs or medical bills. Start small if you need to—saving even $500 can make a big difference in a pinch. Set up a separate savings account for your emergency fund so you’re not tempted to dip into it for non-emergencies.
One way to build your fund is to automate your savings. Set up a small amount to transfer automatically from your checking account to your savings account each month. You won’t even miss the money, and over time, your fund will grow.
6. Avoid Impulse Purchases
Impulse buying can quickly drain your budget, but there are ways to resist the temptation. Before making a purchase, ask yourself if it’s something you really need or if it can wait. A good rule of thumb is to give yourself 24 to 48 hours to think it over. If you still want it after that time, you’ll know it’s a priority rather than an impulse.
Another trick is to shop with a grocery list and stick to it. Whether you’re grocery shopping or browsing online, having a list helps you stay focused and avoid unnecessary spending.
7. Cook at Home
Eating out can be a huge expense, but cooking at home is a simple way to save money. Plan your meals for the week, make a shopping list, and stick to it when you’re at the store. Choose budget-friendly ingredients like rice, beans, and seasonal produce to build your frugal pantry and to keep costs low.
If you’re short on time, try meal prepping. Spend a few hours on the weekend preparing meals you can quickly reheat during the week. Not only does this save money, but it also saves time and keeps you from reaching for expensive takeout.
8. Use Cash for Everyday Spending
If you have trouble sticking to your budget, try using cash for things like groceries, entertainment, or dining out. Once the cash is gone, you’re done spending in that category for the month. This method, often called the envelope system, makes it easier to control your spending and avoid overspending on your debit or credit card.
It also helps you become more aware of how much you’re spending. Handing over cash feels more real than swiping a card, which can help you make smarter choices.
9. Shop Secondhand
Buying secondhand is a fantastic way to save money on clothes, furniture, and other household items. Check out thrift stores, consignment shops, and online marketplaces like Facebook Marketplace or Craigslist. You can often find high-quality items for a fraction of the price you’d pay new.
Shopping secondhand isn’t just good for your wallet—it’s also good for the environment. By reusing items, you’re helping reduce waste and giving things a second life.
10. Celebrate Small Wins
Saving money takes time and effort, so it’s important to celebrate your progress along the way. Did you stick to your budget this month? Skip an impulse buy? Add a little more to your savings account? Take a moment to acknowledge your success, no matter how small it may seem.
Celebrating small wins keeps you motivated and reminds you that every step you take is bringing you closer to your goal. Over time, these small habits add up to big results, and you’ll feel more confident in your ability to save and manage your money.
Saving money doesn’t have to mean giving up everything you enjoy. By starting with small, practical steps, you can build better financial habits and create a budget that works for you.
What other tips do you have for those who are just beginning to save?
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