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How to Save Money Each Month

By Team Tomorrow
Published August 9, 2021

When it comes to budgeting, sometimes even the most minor adjustments can make the greatest difference. Here are a few tips and tricks on how to save money each month to put towards your new home, pay off loans, and enjoy your life:

Live By the 50/30/20 Rule

The 50/30/20 rule is an easy-to-follow budgeting plan made popular by Senator Elizabeth Warren. The basic rule involves dividing up after-tax income and spending it as follows:

  • 50% on Needs – Bills you absolutely must pay and are necessary for survival, like rent and groceries
  • 30% on Wants – Money you spend on nonessentials, like going out to eat or to a concert
  • 20% in Savings – Money you’re saving for retirement or to make a large purchase

In our Home Buying 101 post, we create a budget for Tasha Anderson, a fictitious woman wanting to save $650/mo to put towards a down payment on a house. Let’s take her income and expenditures and split them into needs, wants, and savings:


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Tasha’s ratio is 58.6/28.3/13.1, meaning she should find a way to transfer some money from her “Needs” column to her “Savings” column. She can do this by refinancing her student loans, getting a different health insurance plan, and buying cheaper groceries. If she lives in a city and never uses her car, she could sell it and save $300/mo. Moving to a slightly cheaper place also works.

Tasha has multiple options. It all depends on what works best for her. If balancing a budget isn’t her thing, Tasha can also consider hiring a financial planner.

Set Up a Recurring Transfer From Checking to Savings

Your savings account is meant for just that: savings.

Create a recurring transfer from your checking account to a savings account every month. Make it so you don’t even notice the money entering your checking account. If you notice it, you won’t be tempted to spend it.

Don’t plan on manually transferring the excess balance in your checking to your savings every month. It’s much easier to do it automatically, and you’ll save more that way.

To make the most of your efforts, here are some of the best saving accounts out there.

Quantify Your Spending By Your Hourly Income

Think about your spending habits in a different way. If you make $25/hr after taxes, what’s that time worth for you? Is a $100 pair of jeans worth four hours of your life? Is a $75 dinner worth three hours?

Convert your monthly budget from cash to hours. It’s not nearly as fun to think about, but it may make you rethink some of your purchasing decisions.

Negotiate Your Bills

With so many plans and packages out there, you may be paying for more than you need. Cable, internet, and phone companies want to keep their existing customers, even if that means getting less money from them every month.

It usually costs more to acquire a new customer than to keep an existing one. If one of your companies won’t budge, shop around to find a cheaper deal through one of their competitors.

Meal Prep

Not all of us have time to cook nightly. However, restaurant prices are going up, and sometimes the added fees for delivery can cost more than the food itself.

Save money on food by setting aside a couple hours every week to prep meals that are easy to heat up and serve. You’ll save money otherwise spent at a restaurant, via delivery, and by avoiding going to a grocery store when you’re hungry.

Meal prep can also encourage you to eat healthier so that you’re ready to go for summer.

Host More Events at Home

The food and drinks are (usually) cheaper at home, and you’ll (usually) enjoy some great company. If you still feel like going out after, you’ll spend less because you probably won’t be consuming as much.

Don’t Sacrifice Too Much

Don’t strive to save at the expense of your own happiness. There’s a fine line between cost-cutting and making yourself miserable. The most effective way to save money is to adjust your lifestyle in a way that makes sense for you long term.

Most diets don’t work because they require a lifestyle change. Saving money works the same way.

How To Save Money Each Month: Final Thoughts

By following some or all these seven money-saving strategies, you’ll be well on your way to achieving your goals. To protect that wealth and provide a safety net for your loved ones, visit Tomorrow.

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