28 Proven Ways to Save Money

Budget money to become a saver

1. Create a budget

One smart way to manage your money — and hopefully hold on to more of it — is to follow a budget, which means comparing your income to your expenses and setting priorities for your spending. See our guide to how to budget, or try a free budget spreadsheet or even a piece of scrap paper to start.

At NerdWallet, we recommend the 50/30/20 budget for money management. This approach means devoting 50% of your after-tax income to necessities, 30% to wants and 20% to savings and any debt payments. If one of your allocations exceeds these percentages, you can make some adjustments elsewhere. Scroll down to use the 50/30/20 budget calculator.

2. Set savings goals

Set a specific but realistic goal. It may be “save $5,000 in an individual retirement account this year” or “pay off my credit card debt faster.”

Use a savings goal calculator to see how much you’d have to save each month or year to reach your goal.

3. Track spending

Keep track of your monthly cash flow — your income minus your expenditures. This step will also make it easier to mark progress toward your savings goal. Try a budget app that tracks your spending. (The free NerdWallet app does just that, so do other options like the YNAB app.) Or you can follow these six steps to help track your monthly expenses.

4. Count your coins and bills

Another option is setting aside your spare change each night. After you have a sizable amount, you can deposit it into your savings and watch your account grow. In fact, when you want to watch your spending, it’s a good idea to use cash instead of credit cards because it can be harder to part with physical money. While this strategy won’t build savings overnight, it's a solid approach for slow-and-steady growth.

5. Keep savings in a high-yield savings account

As you work toward your financial goals, make sure to put your accumulating funds in a high-yield savings account to earn interest on top.

Some of the best online high-yield savings accounts pay higher rates than the ones at large traditional banks.

6. Automate transfers

By setting up automatic transfers from your checking account to your savings account each month (or via a company direct deposit), the money will accumulate over time with little effort. This technique can be especially useful when your savings accounts are dedicated to specific goals, such as establishing an emergency fund, going on a vacation or building a down payment.