From the distance, it seems that is easy to start saving money. But in fact, it’s pretty difficult to stick with your savings especially when you don’t have a stellar income.

Everybody knows the importance to save money for the future. You need to save money for emergencies, retirement, kid’s education and the list can go on.

So if you haven’t started saving for these goals, the first question you will have to get answered is how to start saving money?

First of all, let’s be clear, starting will be the hardest part about your savings.

Here some tips for savings that will help you to start.

1. Track your expenses.

Engineer-turned-advisor and founder of WealthMobius.com Bily Xiao says: “Too many adults do not have an accurate view of their income and expenses. But if you measure it, you can improve it. So start tracking, take stock of how much you’re saving, identify low-hanging fruit of expenses you can cut, and start setting some incremental goals to increase your saving. Make use of great tools like Mint.com (syncs with your financial accounts) or YouNeedABudget.com (more manual and private) for tracking.”

Let’s dive a little deeper into tracking your expenses and learn how that can help you save money.

First, recognize that there are two different types of expenses: one-time and subscription. One-time expenses are those that usually happen once. As one-time expenses, they don’t generally reoccur over time. For example, you might pick up an ice cream cone at the store versus signing up for an ice cream cone subscription. This is considered a one-time expense – even if you end up buying the same type of ice cream cone again at a later date.

One-time expenses can be a big deal when it comes to eating away at your bank account, especially if they occur frequently. However, they can be fairly easy to track since you have to make these purchases manually. Because they are on your radar, it’s easier to identify these expenses and do something about them.

Subscription expenses are those that keep popping up over time, and even monthly. Recurring expenses include bills such as your water bill, cable bill, and rent. You’re signed up, so you expect to receive these bills every so often. The cost of these subscriptions may or may not be fixed.

Now, subscription expenses are a little tricky. For some reason, you might find yourself justifying the recurring, subscription expenses more easily than the one-time expenses.

Imagine this scenario. You’re in a cell phone store shopping for a phone and service. You see a phone that costs $850 that comes with a service plan that will cost you $50 per month. You also see a phone that costs $200 with a service plan that will cost you $80 per month. Let’s say you are going to keep the phone and service for four years.

Which phone should you get if you want the better deal? While you might be tempted to get the phone with the lower price tag, the phone with a higher price tag is the better deal in the long run.

Over the course of four years, you’ll pay a total of $3,250 for the higher-end phone and the service. Over the same four years, on the other hand, you’ll pay a total of $4,040 for the cheaper phone and service. The lesson here is to do the math and figure out which deal is truly the best in the long run.

Not only will you save money when you do the math and pay attention to subscription costs, but you’ll be able to save money to make similar, higher-priced upfront purchases like this again in the future in order to save money on subscription expenses (when applicable).

 

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2. Automate it.

Jamie Pomeroy, Financial Advisor at MerchantsBank says:

“Once you have established a budget and have clear short- and long-term goals, one easy way to get in the habit of saving money toward those goals, is to simply automate it. Set up regular and automatic deposits into your investment and savings accounts, either directly from your paycheck or from your checking account.

This is such a simple practice that will pay tremendous dividends in the future. To help you with this, you may also want to check out technology tools that might just make your savings life a little easier. Tech tools like Digit will determine how much you can afford to save each week or month based on your personal income and spending, then it will actually send those amounts to a savings account for you!”

No matter what, automating will definitely help you stay on track with your savings goals. It truly is one of the quickest and easiest ways to save on a continual basis. However, you do need a way to keep track of what’s automated so you’re still in control.

While automating can help you save on a continual basis, you should also be aware of some of the practical limitations of automating when you’re trying to optimize your savings.

One such limitation comes when your income or expenses change but your automated financial decisions don’t. This, as you can imagine, could be problematic. If, for example, your income significantly drops and you no longer have the funds to transfer money into your savings account, you’re going to need to remember that so you can adjust the amount. Of course, this is assuming that you aren’t using software that can automatically make these adjustments for you.

 

As a final reminder, just because you can automate something doesn’t mean you always should. In the real world, there are times when it doesn’t make sense. With all of that being said, it’s worthwhile to automate as much as you can as long as it helps you reach your goals. Then you can sit back, relax, and watch your savings go up and up!

3. Get out of debt.

Scott Wellens is the founder of FortressPlanningGroup. He says: “People who have a lot of consumer debt and other loans do not have the cash flow to save in the first place. Debt-ridden individuals end up paying interest to the credit companies instead of earning interest on savings. The best way to start saving money is to get out of debt as quickly as possible and have the discipline to stay out of debt. You will be surprised at how much money can be saved on a monthly basis if you kick debt out of your life.”

Debt can linger on and on for years, making it nearly impossible for people to save. Thankfully, there are some great online tools that will help you get out of debt. But remember, the software only works if you work with it, so do so!

When you’re looking to get out of debt, I recommend listing your debts one by one. You may choose to order them from the highest interest rate down to the lowest interest rate, or the lowest balance down to the highest balance. The first method may save you the most money, but the second method is nice because it helps you to feel your progress. Whatever you decide, just make sure you attack one debt at a time.

Also, be sure to check out some ways to save money. The more money you can save, the more money you can use to pay down debt. The more money you can put toward debt, the less interest you’ll have to pay. And, the less interest you have to pay, the more money you’ll have to save! You’ll start to gain a natural momentum as you pay off your debt and will be able to save more than before.

I’m going to let you in on a little secret. In order to pay off debt, you’re going to need to get some financial grit. You’re going to have to be determined – really determined – to pay off debt faster than normal. It’s not easy, especially if you’re used to being in debt.

It’s useful to continue your debt-free ambitions long after you become free of the clutches of debt. Don’t go back into debt! Spend less than you make and you’ll avoid debt for the rest of your life.

You’ll be shocked by just how much you can save when you have no debt. I encourage you to envision that now. What will it be like to be free of any debt whatsoever? What could you save toward? How much further will each and every paycheck go? Grab onto this vision and let it be a motivation for your efforts.

Many types of debt, like credit card debt, can have absurdly high fees that make them very worthwhile to pay off before you invest money. How much will you make in the stock market? 6% per year on average? 7%? While that’s good, you can “make” a whole lot more by paying off your high-interest credit card debt.

Invest in your future by paying off your debt. It’s a guaranteed return on investment. You’ll know what to expect and, as you pay off each debt, you’ll have more money to throw towards your other financial goals.

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