How to Save Money Consistently and Effectively

Making sure you set money aside for your goals and your family’s future.

Learn how to save money

If you’re like many Americans, saving money on a consistent basis may be a struggle. You may save sometimes, but it can be difficult to maintain a consistent strategy. You may also find that you’re one of those people who can save, but you end up spending it on things like big-ticket items and vacations, instead of really squirrelling it away for a rainy day.

The information below can help you develop an effective and consistent saving strategy that works for your budget. Keep in mind that a high debt load may prevent you from implementing or maintaining your saving strategy effectively. If you’re struggling with debt, give us a call at or complete a request for a Free Debt & Budget Analysis and a certified credit counselor will be in touch to discuss your options for debt relief.

Step 1: See what you should be saving

If you want to really be financially successful, most financial experts recommend that you should save about 10% of your income. That way, the amount you’re saving is proportional to your earnings. This is important because in general, people who make more have a higher cost of living, so they need a bigger financial safety net in case of emergencies and will require more money during retirement to live in the style they’re accustomed to living

With that in mind, if you only bring in $2,000 per month, then you should be saving about $200. But if you bring in $3,300 per month as a household, then $200 isn’t really enough; you should be setting aside about $330 every month.

So your first step to develop the most effective saving strategy is to determine what 10% of your income really is so you can set an accurate savings goal. First add up all of your income sources. This includes:

Once you have your total monthly income, multiply it by 10% (0.1) to determine your target savings. As you’ll see below, this may not be what you end up saving initially when you first get started, but it should be the goal that you aim to achieve.

Step 2: Determine what you can actually save

Plan savings into your budget

In many cases when you first start out with a saving strategy, hitting the full target 10% of your income can be tough, but that doesn’t mean you should just give up on saving entirely. Instead, you have to start with what you can afford and then work your way up to the target as you bring your budget into balance and get comfortable setting money aside.

Start by reviewing your budget closely to see how much extra money you typically have left in your budget any given month once all of your bills and other necessary expenses are paid. This is known as “free cash flow” and it’s generally where your savings are going to come from. Ideally, your free cash flow will be more than 10% of your income, so you can set the full 10% you want to target aside and still have some cash available in case of emergencies.

Still, you may find that your free cash flow either doesn’t amount to 10% of your budget or exactly matches it. In either of these cases, setting aside the full amount you determined in your target may cause problems. After all, if you have no free cash flow, then you’ll end up dipping into your savings if you have an emergency.

So determine what you can comfortably afford to save and set this as your starting savings amount. Saving at least something is definitely better than nothing and also better that just leaving it to chance. You can always build to the full 10% target later.

Step 3: Ensuring you save

Now you know what you should save, but the next step is making sure it actually happens every month. You want to treat savings like you would any other financial obligation. Just like you owe money to your mobile provider, the utility company and your creditors, savings is the money you owe yourself. If you can get in the mindset that savings is a monthly obligation you pay yourself, it can help you get in the right frame of mind to save consistently.

The worst thing you can do is leave savings for whatever you have leftover on the last day of the month. This is a sure way to ensure you don’t end up saving anything or only save once in a blue moon. Instead, you need to look at your income flow (when you receive paychecks) what when things get paid to determine your best time to save. Then set a date that you will move money into savings and make sure that happens every month.

Having a separate savings account is important, because it ensure that the money doesn’t get spent. Keeping everything in one bank account can be problematic for maintaining your savings. In addition, you don’t get the benefit of the modest interest your money will earn in a savings account.

The other advantage of a separate account is that your bank may have a system that allows you to set up automatic transfers every month. This moves the money automatically so you don’t have to remember to set it aside. The more automated you can make the saving process the more likely you are to save consistently.

Step 4: Dividing your savings up for specific goals

Allocate savings to achieve specific goals

The three steps above will help you start a consistent strategy for setting money aside, but you still need to determine where the money that you save will go. Your savings needs to be divided up between short, medium and long-term financial goals. Then you need to funnel the money in your savings into different accounts and assets that will help you achieve those goals.

Keep in mind that a traditional bank savings account will not earn money with interest added quickly. In fact, most savings accounts have an interest rate of less than 1%. As a result, your money doesn’t grow fast enough for everything your savings needs to support if you just leave it in your traditional savings account.

Instead, you need to find other types of accounts, securities and assets that you can invest your savings in to help you reach your goals. These may include:

All of these after-tax saving engines can help you meet and achieve specific goals. They’ll also help you build wealth and giving you something to fall back on if you get into trouble.

So let’s say that you’re saving $300 per month and have one child that you need to send to college. Here’s one way you might divide your savings:

o   You maintain a $1,000 balance in your traditional account for emergencies like a car repair or trip to the ER

o   You move the rest of the money into an MMA where it may not be as easily accessible or flexible (for instance, you have to maintain a high minimum balance), but where the money earns slightly more interest.

o   At regular intervals once you generate a healthy sum of money, you take chunks of your MMA savings and move it into higher-interest-earning CDs, stocks and bonds.

Additional tips to help you save

The four steps above can help you develop an effective saving strategy, but there are plenty of ways you can sabotage your own success if you’re not careful. The tips below can help you ensure that your strategy works to get you where you want to be.

Often, people dip into long-term savings accounts because they start to have problems with their debt or budget, but there are other (better) ways to deal with a debt problem so your savings don’t suffer. As soon as you realize that you’re starting to struggle, take action. The faster you identify a debt problem and determine the best way to deal with it, the less likely you are face the penalties and growth loss of early retirement withdrawals.

We’re here to help

If you have questions or would like a certified credit counselor to evaluate your debt and budget to help you bring balance to your financial life, give us a call at or take the first step online now by submitting a request for a Free Debt & Budget Analysis. We can help you overcome the challenges you face with debt so you can achieve stability and start saving the way you need to save to reach your goals.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

All Consolidated Credit counselors are certified personal financial counselors (CFC) We've helped 5 million people get out of debt! Call us today and see what we can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

The National Industry Standards for Homeownership Education and Counseling are a set of guidelines for quality homeownership and counseling services. Industry professionals who adopt these standards can be trusted to provide consistent, high quality advice.
Click here to learn more.

Consolidated Credit Consulting Services, Inc. has been verified as the owner or operator of the Web site located at www.consolidatedcredit.org. Official records confirm Consolidated Credit Consulting Services, Inc. as a valid business. Call us today and see what we can do for you.

Consolidated Credit is a Certified ISO 9001 company, as verified through Bureau Veritas Certification.

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Consolidated Credit is proud to be an ANAB accredited member. Accreditation by a recognized and respected body such as ANAB ensures the impartiality and competence of our company. To see what we can do for you, give us a call.

U.S. Department of Housing and Urban Development - HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. Consolidated Credit is proud to be a member of HUD and also part of the Hope Now Alliance.

You can save!

With this amount of debt, you'd pay around $xx.xx on a DMP.

FREE Debt Consultation
VE Interactive