If saving money feels difficult right now, you’re not alone. A new NerdWallet survey found that nearly 2 in 5 employed Americans (39%) save less than 20% of their take-home pay. Ten percent of employed Americans say they don’t save anything regularly in a bank.
To help people save more, financial experts suggest beginning with a budget. Comparing your income to your expenses helps identify priorities. The 50/30/20 budget is one method: 50% of income goes to needs, 30% to wants, and 20% to savings and debt. Alternatives like the 60/30/10 method or the envelope system may work better for different situations.
Setting specific savings goals can make a big difference. Whether it’s $2,000 for retirement or just $5 a week, the goal should be realistic. Tracking spending is another key step—knowing your cash flow helps reveal where to cut back. Even setting aside loose change can lead to progress. Keeping your savings in a high-yield savings account will help it grow faster than traditional options. Automating transfers from checking to savings can make the process easier.
Paying off debt is another way to free up money. Reducing high-interest debt saves money over time. If student loans are part of the budget, income-driven repayment plans, refinancing, or making extra payments can help. For homeowners, refinancing a mortgage may lower monthly payments if interest rates are favorable.
On monthly bills, there are ways to cut costs. Planning grocery trips helps avoid impulse buys. Reviewing cable and internet bills may reveal unnecessary services or packages, and switching to a cheaper phone plan could also help. Using energy-efficient appliances and cancelling unused subscriptions can reduce expenses too.
When shopping, tracking sales and delaying purchases can lead to savings. The 30-day rule encourages people to wait before buying something to avoid impulse spending. Not saving billing information online and deleting shopping apps can also help control online purchases. Buying household goods in bulk during sales, visiting thrift stores, or using free item exchange groups can lower everyday costs.
Gift-giving can be less expensive by being creative or planning ahead. Some websites and communities offer birthday freebies, and tools like browser extensions can help track discounts on major purchases. Transportation costs may drop by refinancing car loans, comparing insurance options, driving less, or using gas-saving apps. Car-sharing services like Turo or Getaround can be more affordable than car ownership or traditional rentals.
Cutting back on restaurant spending, skipping drinks or desserts, or choosing appetizers can stretch a dining budget. Entertainment can be affordable through community events, free museum days, or local concerts. Discounts are often available for students, seniors, and other groups. Free events listed online or in libraries can offer fun without high costs.
If saving is still a struggle despite these efforts, help is available. Government programs offer aid for food, child care, or utility bills for low-income families. The nonprofit service 211 connects people to local resources and emergency support. For people behind on bills, service providers may offer payment plans, discounts, or other relief options.
