How to Save Extra Money
- 1). Track your monthly income and expenses for two months to create a monthly budget. If you notice overspending in one or more areas of your budget, set a spending goal and stick to it. Based on your budget, determine how much you can save each month without neglecting household bills and depriving yourself of necessities. Everyone's budget will be different.
- 2). Set a savings goal. You can save money to create an emergency fund, to go on vacation, purchase an expensive item, pay for educational expenses or for any other reason. If your primary goal is to create an emergency fund, aim to save enough money to pay your monthly bills and living expenses for three to six months.
- 3). Open an savings account or money market account insured by the FDIC. To earn increase your savings, open a high-yield account that will pay you interest based on the amount of money you have in your account.
- 4). Set up automatic monthly deposits to your savings account. Schedule automatic transfers from your checking account immediately after each pay day. This helps make saving money a habit and prevents the temptation to skip saving money each month.
- 5). Add money to your savings account whenever you get tax refunds or other extra or unexpected income.
- 6). Review your budget every six months and whenever your income decreases or increases, and adjust your savings plan accordingly.
