The Best Ways to Save Money Every Month

Whether you're 12, 22, or 72, you probably know that saving can lead to more freedom. Savings help prepare you for unexpected expenses, from doctor bills to dream vacation opportunities. It’s also the key to longer-term things like retirement. 

Consistency is often the biggest challenge, but you have an advantage as a family: You can help each other stay on track. Follow these tips for how to save money every month and reach your goals before you can say, "Should I buy that?"

Making a budget

The first thing your savings plan needs is a goal. Maybe you want to save $5,000 by New Year's or have a nest egg of $10,000 by next summer. Creating and achieving a realistic financial goal requires a budget.

Setting up a monthly budget is simple, even if it's your first time. Open a blank spreadsheet. Enter your after-tax income, list your monthly expenses, and compare the two.

The remainder helps you decide how much money to save every month. If your family takes in $10,000 a month and spends $8,000, you have $2,000 left to save, assuming you budget wisely and don't buy anything extra.

Tracking spending

Make family finances fun!

Make family finances fun!

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Learning to budget money and save every month highlights that living expenses are only part of your outgoing cash. To get control of your finances, you need to understand your spending habits.

Challenge yourself and your family to document every dollar spent. Do this for a week or two, then look at the results together. You'll know where and how you spend, even if you forget to record a latte or two.

Paying off debt

Being debt-free can significantly boost your family finances, and it feels great, too. Money that used to go to paying off interest or loans stays in your bank account, so you can build wealth instead of subtracting from it. Keep that money in an account that earns compound interest so it can generate more every year.

Start by allocating extra money in your budget to pay off balances. Some people focus on paying off their smallest debt first. Others prefer to target their highest-interest debt, often their credit cards. Either method works if you're consistent.

Every time you pay off a debt, take those savings and put it toward the next one. Once you're debt-free, you can start shuffling those funds into savings. An emergency fund is a good starting point. If you already have one, start building your nest egg or investing.

Setting up automatic savings deposits

Learning how to save a little money every month is simple, but making it happen takes some work. Thankfully, your bank can handle that part.

Automation lets you allocate money from your paycheck toward specific accounts or goals. Log into your account or call the bank directly and ask to set up automatic transfers. Specify how much you want to transfer and how often. Make sure you have enough funds in the account you’re transferring from so you don’t rack up overdraft fees. 

No more forgetting to make the transfer or asking yourself, "Do I need this money for anything else?" It goes straight to savings. If you've done the math right, you'll never miss it.

Adjusting tax withholdings

If you work a wage or salary job, you fill out tax form W-4, which tells your employer how much to withhold from your paycheck for taxes. The more your employer withholds, the more likely you may get a refund. 

On the other hand, if you withhold too much, the government holds onto money that could have gone into a high-interest savings account. The Internal Revenue Service (IRS) Tax Withholding Estimator can help you determine your withholding if you work as an employee.

Checking insurance rates

Shopping around for insurance can lead to big savings. One survey showed that people who recently switched car insurance saved hundreds, with a midpoint savings of $461. 

You can shop around for other kinds of insurance, too. If your homeowners' insurance has gone up, look into other options, especially if your rate has increased by more than 15%.

Finally, remember health insurance. Watch for notices that open enrollment is coming up, and review your options. You might be able to get similar coverage for a lower premium or take advantage of a health savings account (HSA) or flexible spending account (FSA), depending on your eligibility.

Saving in a high-yield savings account

If you want to build your emergency fund faster, put your money in a high-yield savings account (HYSA). Traditional savings accounts typically earn less than 1% on the balance, but some HYSAs may yield 4.5% or more, depending on federal rates.

Those small percentages can make a big difference. If you put $5,000 into a 0.5% traditional savings account and add $500 monthly, you'd reach $60,000 in nine years. With an HYSA account earning 4% interest, you'd get there in fewer than eight years assuming interest rates stayed the same. You’d have more than $70,000 if you left it in for the nine years at 4%.

With Greenlight Infinity, your kids can earn up to 5% on savings*. You can even contribute to their savings goals.

Other ways to reduce your monthly expenses

There are few absolutes in finance, but one thing is always true: The less you spend, the more you can save. Spending less on going out is one option, but learning to save money at home can make an even bigger difference.

These six tips show how to save more money every month:

• Cancel subscriptions and memberships: Shed the monthly payments and find free or lower-cost alternatives.

• Reduce energy costs: Turn lights and electronics off when you're not using them. Buy energy-efficient bulbs. Turn the heat down and raise the temperature of your air conditioning.

• Plan meals: Create a menu for the week, including packable lunches. Whenever possible, buy generic versions of the ingredients.

• Use cash-back apps, coupons, and rewards: Get discounts and money back for things you already buy.

• Choose free and DIY options: Do home projects yourself. Get a library card for free books, movies, and more.

• Try a no-spend challenge: Only buy what you need. Put the money you'd otherwise spend into savings.

Turn budgeting and saving into a fun family game or challenge for extra inspiration. Whoever reaches their savings goals fastest gets a prize. Make sure the prizes are free!

Build money smarts as a family with Greenlight Infinity

Saving is one of the most important financial goals for money-savvy families like yours. With Greenlight Infinity, the money and safety app for families, you can get support every step of the way. Try Greenlight today. 

* Greenlight Core families can earn 2% per annum, Greenlight Max families can earn 3% per annum, and Greenlight Infinity families can earn 5% per annum on an average daily savings balance of up to $5,000 per family. To qualify, the Primary Account must be in Good Standing and have a verified ACH funding account. See Greenlight Terms of Service for details. Subject to change at any time.