Have you ever checked your bank account and wondered where all the money went? You’re not alone. Building savings can feel like a struggle, especially when there never seems to be enough to go around.

While it may seem challenging to begin, learning how to save money is easier than you might think. It begins with changing your mindset, setting smart goals, and learning how to manage money. Growing your savings requires dedication and patience, but even small steps can make a big difference. Begin your journey with these simple money-saving tips.

1. Review Your Spending Habits

First, understand how much you earn and where your money goes. Begin by tracking expenses for one to two months, noting every purchase, regardless of size. Recording everything from rent payments to daily coffee runs will provide critical insight into your spending habits. With this information in hand, you’ll have the clarity needed to make savvy financial choices.

The best tool for tracking your spending is the one you commit to using consistently. Budgeting apps and software tools can be helpful, as they automatically categorize expenses and provide an overview of spending at a glance. If you prefer to put pen to paper, consider a printable expense tracker instead.

2. Define Your Savings Goals

Setting both short-term and long-term savings goals helps provide direction and purpose. Visualizing your goals makes the process more meaningful and keeps motivation high. 

Short-term goals are typically what you hope to achieve in the next few years, such as saving for a new laptop, a planned vacation, or a down payment on a vehicle. These goals provide immediate targets to work toward, making saving feel more urgent and attainable.

Long-term goals may include saving for a home, a child’s education, or retirement. These require a more significant commitment and often involve larger sums of money.

Once you clearly define these savings goals, set realistic deadlines and break the target into manageable weekly or monthly savings amounts. These smaller targets can make even large goals feel attainable. Keep track of progress and celebrate when you hit milestones, as this helps fuel motivation. 

3. Create a Realistic Budget

A budget is a plan for how to spend your income. There are many different types of budgeting strategies, ranging from complex to simple, but they all work in generally the same way. Begin by listing mandatory living expenses, such as housing, utilities, and debt payments. Don’t forget to add a line item for your savings goals. Categorizing savings as a mandatory expense is one of the best ways to save money consistently. 

Next, add discretionary spending categories, such as dining, clothing, and entertainment. You may need to adjust amounts in these categories to ensure you have enough take-home income to cover all the expenses on your list.

Whether you use a budget worksheet or a digital tool, it’s critical to make sure you’ve included all relevant categories and allocated a realistic amount to each. If the budget is too strict or isn't a true reflection of your lifestyle, motivation to save can quickly flag. Instead of going to extremes, consider starting with amounts that are close to your current spending habits, then make moderate adjustments over time.

4. Identify Cost-Cutting Opportunities

Now that you’ve identified your expenses and have developed a budget, it’s time to start finding ways to save money. Identifying areas where you can trim expenses is a powerful way to free up more funds for savings.

Keep in mind that regular spending habits, such as unused subscriptions or weekly takeout orders, can often add up. Trimming these costs is a relatively painless way to boost your savings. Consider these cost-cutting opportunities:

  • Cancel unnecessary subscriptions: List all monthly subscriptions and cancel the ones you rarely use. This may include streaming services, automated deliveries, and monthly memberships.
  • Cook meals at home: Eating out frequently can drain your wallet. Preparing meals at home is more economical and often healthier. Plan your meals weekly to save on groceries and avoid impulse eating.
  • Pause before buying: Try waiting 24 hours before making non-essential purchases. The next day, reconsider whether you still need or want the item. 
  • Use a shopping list: Having a list can keep you focused and prevent unnecessary purchases. Whether you're buying groceries or clothing, bring a list and commit to sticking to it. 
  • Price-shop before buying: Take the time to compare prices across different retailers to ensure you’re getting the best possible deal.

5. Prioritize Your Savings

Prioritizing savings requires balancing current wants and needs with your vision for the future. Controlling your spending and learning to make responsible budget trade-offs will help you stay on track.

  • Handle unexpected expenses wisely: When a surprise expense arises, offset it by pausing non-essential spending rather than scaling back savings. This approach ensures commitment to your savings goals, even when times get tough.
  • Adopt a savings mindset: Saving anything is better than not saving at all, no matter how small. There may be months when you can't save as much as you would like. When this happens, don't get discouraged. Consistency over time builds wealth.
  • Set up separate savings for each goal: When each goal has its own savings account, you're less likely to use the funds for anything other than the intended purpose. Watching the balance in each account grow helps keep you focused and motivated. 

6. Choose the Right Savings Tools

Selecting the appropriate savings and investment tools can help maximize earning potential while ensuring each account fits your savings goals and timelines. There are many different types of savings accounts available, each with varying levels of liquidity and other unique characteristics. Some of the most common savings tools include:

  • Standard savings accounts: These offer a place to store money with easy access. While standard savings accounts pay low interest rates, they are highly liquid, allowing you to withdraw funds at any time, often without penalty.  
  • High-yield savings accounts: They're similar to standard savings accounts but typically offer higher interest rates. High-yield savings may also have higher required account minimums, higher monthly fees, and monthly withdrawal limits. 
  • Money market accounts: These combine features of savings and checking accounts, offering higher interest rates and access to funds through an ATM card and/or check-writing. 
  • Certificates of deposits (CDs): CDs hold funds for a fixed period, ranging from a few weeks to several years. They typically pay higher interest rates compared to standard savings accounts. Accessing funds before the term ends can result in penalties and/or loss of earned interest.
  • Individual retirement accounts (IRAs): IRAs are tax-advantaged accounts designed for retirement savings. Traditional IRAs offer tax-deferred growth, while Roth IRAs allow for tax-free withdrawals in retirement. Tax penalties may apply for withdrawals prior to retirement age.
  • 529 college savings accounts: 529 plans are tax-advantaged accounts designed specifically for saving for future education costs. The savings grow tax-deferred, and withdrawals are tax-free when used for qualified education expenses.

7. Automate Your Savings

Setting up an automatic savings plan allows you to save money regularly without thinking about it. It’s an effortless way to ensure consistency, allowing savings to grow in the background while you focus on other things.

Many banks allow you to set up auto savings transfers between checking and savings accounts. You can start with a small amount, such as $5 a week or $20 a month, and easily adjust the amount as circumstances change.

Consider setting up automatic payroll contributions if your employer offers a 401(k) retirement plan. You can start with a small amount, such as 1% of your earnings per pay period, and increase the contributions over time as your budget allows.

8. Make Saving Fun

Turning savings into a game can help you stay engaged and motivated. Try one of these popular money-saving challenges to reach your goals in a fun and exciting way:

  • The 100 Envelope Challenge: Label 100 envelopes with numbers 1 through 100. Randomly select one envelope per day and fill it with the amount of money that matches the number. Keep the envelopes in a safe place, and you'll have $5,500 to deposit into your savings account when the challenge ends. 
  • No-Spend Challenge: Plan a set period of time, such as 24 or 48 hours, or certain days each week when you’ll commit to spending money only on essentials. This encourages creativity to get by with what you already have and increases awareness of spending habits. Put the money you would have spent into your savings account and watch it grow. 
  • Keep the Change Challenge: Round up purchases to the nearest dollar and save the difference. It’s a simple yet effective way to save without feeling the pinch. You can also keep a change jar in your home, depositing coins and even small bills at the end of each day. Once the jar is full, deposit the funds into your savings account. 

Each of these challenges can be customized to fit your financial situation, making saving accessible and fun to everyone. 

9. Prepare for The Unexpected

From a vehicle breakdown to a large medical bill, unexpected expenses can derail your plans. Without an available emergency fund, you may be forced to skip planned deposits or tap into savings that were meant for other things.  

Experts recommend keeping a liquid account with a balance equal to 3 to 6 months’ worth of mandatory expenses to cover emergencies. If you don’t already have an emergency fund in place, consider making this a primary savings goal. It’s an excellent way to create a financial safety net and ensure you’re prepared to handle whatever life throws your way.

10. Review and Adjust Your Plan

Regularly reviewing your budget and savings strategy helps keep the plan on target. Ideally, this is once a quarter and after major life changes, such as a new job, relocation, marriage, or anything else that results in a significant change in income and expenses.

Completing reviews on a schedule helps you quickly catch overspending before it becomes a habit and provides consistent opportunities to improve your savings strategy. During the review process, complete the following steps:

  • Analyze your progress: Determine whether the accounts are growing at the expected rate and if you’re staying within the planned budget.
  • Adjust the plan for changes: If you’ve received a raise, paid off debt, or encountered new expenses, update the budget to reflect these changes. Consider whether there’s room to boost your savings rate or a need to re-evaluate how funds are allocated across goals. If you are not meeting the goals, consider cutting back on non-essential spending or seeking additional sources of income.
  • Re-evaluate your goals: Review your savings goals to see if they still align with your current life situation and priorities. You may decide some goals are a higher priority while others need to be pushed back or adjusted in scope. This review process helps ensure you’re saving for the goals that matter most at any given time.
  • Seek feedback: A fresh set of eyes can offer valuable perspective. Sharing your strategy with a financial advisor, family member, or trusted friend can help keep you motivated and accountable.

Simple Strategies for Building Your Savings

Saving money is much easier once you know where to start. Paying attention to where your money goes, creating a realistic budget, and setting short-term and long-term savings goals will help create a solid foundation.

With a plan in place, getting started is as simple as opening an account and making deposits. Keep in mind that saving even small amounts can make a big difference. Consider automating your savings, and don’t forget to regularly review and adjust your plan to keep yourself on track.

PNC Bank offers a range of savings vehicles, from a standard savings account to money markets, CDs, IRAs, and more. Whether you’re just starting your savings journey or looking to design a more complex strategy, we offer the tools to support your goals. Get started now by comparing our most popular savings options.