Set a saving target

• Use resources such as community event listings to find free or low-cost events to reduce entertainment spending.
• Cancel subscriptions and memberships you don’t use—especially if they renew automatically.
• Commit to eating out only once a month and trying places that fall into ...

• Emergency fund (3–9 months
• of living expenses, just in case)
• Vacation
• Down payment for a car

The first step to start saving money is to figure out how much you spend. Keep track of all your expenses—that means every coffee, household item and cash tip.

Review your budget and check your progress every month. Not only will this help you stick to your personal savings plan, but it also helps you identify and fix problems quickly. Understanding how to save money may even inspire you to find more ways to save and hit your goals faster.

Almost all banks offer automated transfers between your checking and savings accounts. You can choose when, how much and where to transfer money or even split your direct deposit so a portion of every paycheck goes directly into your savings account.

After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. Be sure to remember long-term goals—it’s important that planning for retirement doesn’t take a back seat to shorter-term needs.