The Secret to Saving Money

Dave Ramsey Advice

We all have good intentions when it comes to saving money, right? We tell ourselves we’ll start saving once we reach a certain milestone, like when we hit a specific age, get a raise, or the kids move out.

But in reality, you’ll only start saving money when you develop healthy money habits and your future needs become more important than your current wants.

Don’t worry, it’s not as overwhelming as it sounds. With a few tweaks to your spending priorities, you’ll be on the fast track to saving money in no time.

Why Americans Aren’t Saving Money
We all know we need to save, but most people don’t save like they know they should. In fact, a report by the Federal Reserve found that about 40% of Americans surveyed would have difficulty covering a $400 emergency.(1) Why? Because they have competing goals.

A lot of times, the goal to save money isn’t a big enough priority to delay the purchase of that new smartphone, kitchen table, or TV. So, we spend our dollars away or—worse yet—go into debt to buy the latest want. That debt then becomes monthly payments that control our paychecks and our lives.

So, What Is the Secret to Saving Money?
You can stop the cycle of living paycheck to paycheck with a simple secret: make a zero-based budget before the month begins. A budget is all about being intentional. It helps you create a plan to see where your money is going and how much you can save each month. It’s never too late to take control of your money!

Saving Money With a Zero-Based Budget
A zero-based budget is simply when your income minus your outgo equals zero. You’re giving every dollar a name—or assigning it a job to do—before you save or spend it. And do it down to the last penny!

Start with your most important categories first. We call these the Four Walls:

Food
Shelter and Utilities
Basic Clothing
Transportation

Saving (and giving!) need to be a line item in your budget along with the Four Walls. After you’ve set aside funds for your savings and basic needs, fill in the rest of your budget with what’s left. When you plan this way, it prevents you from running out of money before you even start saving!

Saving Money Doesn’t Have to Be Hard
Making a budget is easy with our free budgeting app EveryDollar. It only takes about 10 minutes to set up your money plan! And you can even track your transactions on the go.

One of the hardest parts of budgeting is finding a few minutes each month to actually sit down and figure out your budget. Life gets busy, after all! But EveryDollar saves you time by copying your budget from the previous month. That way, all you have to do is make some minor adjustments (for that birthday gift or those travel plans) and you’re good to go!

15 Practical Ways to Save Money
Imagine how your life would change if you suddenly had money left in your monthly budget. What would you do with that cash over time? Beef up your emergency fund? Pay off your car? Finally take the vacation you’ve always dreamed of?

It can happen! Just take stock of your spending and identify areas where you can save. When you make a few tweaks to your expenses, you could be surprised at how much money you have left in your budget.

1. Get rid of your debt.
Monthly debt payments are the biggest obstacle to saving money. It robs you of your income! So, get rid of that debt. The fastest way to pay off debt is with the debt snowball method. This is where you pay off your debts in order from smallest to largest. It sounds intense, but it’s more about behavior change than numbers. Once your income isn’t tied up in monthly debt payments, you can finally use it to make progress toward your savings goals.

2. Cut down on groceries.
Most budgeters are shocked to find out how much they’re actually spending at the grocery store each month. Save money on groceries by planning out your meals each week and taking inventory of your pantry before you head to the store. This will help prevent you from overspending and wasting food. And think about cutting back on snacks and junk food that can send you over your budget!

3. Cancel subscriptions and memberships.
Chances are, you’re paying for multiple subscriptions like Netflix, Spotify, gym memberships, trendy subscription boxes, or Amazon Prime. Cancel any subscriptions you don’t use regularly. If you really miss one, subscribe again—but only if it fits into your new budget.

4. Buy generic.
In most cases, the only thing that’s better about brand-name products is the marketing. Generic medication, staple food items, cleaning supplies, and paper products cost far less than their brand-name, marked-up competitors.

5. Cut ties with cable.
It’s no secret that cable prices are continuing to rise.(2) The average monthly price for cable TV is about $106 a month—which adds up to over $1,200 a year!(3) Here’s the good news: cable isn’t the only way to watch your favorite shows these days. Cut the cord and find out how to save big with alternatives to cable like network apps and streaming services.

6. Automate your savings.
Save money without thinking about it. Set up your bank account to automatically transfer funds from your checking account into a savings account every month. Or, set up your direct deposit to automatically transfer 10% of each paycheck into your savings account.

7. Spend extra or unexpected income wisely.
When you get a work bonus, inheritance or tax refund, put it to good use. You’ll be better off using those funds to pay off your student loans or credit card balance than stashing it away. If you’re debt-free, use those extras to build up your emergency fund.

Bonus tip: If you regularly receive large tax refunds, adjust your paycheck withholding so that you bring home more money in your paycheck each month.

8. Reduce energy costs.
If you’re serious about saving money, be more mindful of your energy consumption. Simple things like taking shorter showers, fixing leaky pipes, washing your clothes in cold water, and installing dimmer switches or LED lightbulbs are easy wins. There might be an initial investment for new, more energy-efficient appliances; but if you work it into your budget, you should be able to pay cash for those improvements.

9. Unsubscribe from emails.
Email marketers are really good at what they do. They know the irresistible temptation of a flash sale or exclusive coupon! If you just can’t resist shopping when you see a special offer, click the unsubscribe link at the bottom of the email. You’ll be less tempted to spend and your inbox will be a lot less cluttered. It’s a win-win!

10. Borrow, don’t buy.
Need a tree trimmer for some weekend yard work or a handheld blender to make a batch of soup? Borrow it from a friend or neighbor instead of taking a trip to the store.

11. Pack lunch.
According to the Bureau of Labor Statistics, the average household spends approximately $3,154 on food outside of the home each year.(4) Buying lunch a few times a week may seem harmless in the moment, but it’s a pretty indulgent (not to mention preventable) expense!

12. Ask about discounts.
You’ll never know unless you ask. Next time you’re getting tickets at a movie theater, museum or sporting event, ask if they have any special discounts for seniors, students, military, or AAA members.

13. Take advantage of your retirement savings plan.
If your employer offers a 401(k) match and you aren’t taking full advantage of it, you’re missing out big-time! Talk to your HR department to set up an account. Remember, wait until you’re debt-free (except your mortgage) and have an emergency fund of three to six months of expenses saved before you start saving for retirement.

14. Lower your cell phone bill.
If your monthly cell phone bill rivals your monthly grocery budget, it’s time to find ways to cut back. Save money on your cell service by getting rid of extras like costly data plans, phone insurance, and unnecessary warranties. And don’t be afraid to haggle with or completely switch your provider! It might require a little persistence and research, but the savings are worth it.

15. Try a spending freeze.
Don’t buy any nonessential items for a week—or even a month! Make it work by prepping meals with the food you already have, avoiding stores where you tend to impulse buy, and saying no to anything that isn’t a basic necessity.

Why Budgeting Is Our #1 Tip to Save Money
Remember, saving money has to be at the top of your priorities (and the top of your budget) before you’ll gain any real traction with your goals. When you make a zero-based budget, you’re effectively saying, “I choose to put my future needs before my present wants.” It really doesn’t matter how much money you make—it matters how you spend and save the money you make.

Now that the secret is out, it’s time to start saving and reaching your money goals. Get our free budgeting app EveryDollar so you can keep track of all your budgeting and saving in one place. Saving money has never been easier!

I did that saving most income and invest it before Dave had a show... in 1987.
My father was doing that in the 1950s.

It should be taught in school.

#10 is not for me..

#11 is a biggie. I can think of very few people who pack their lunch. It's common to see folks dropping $7-10 at gas stations for their lunch.

Instead of talking yourself into a new purchase, talk yourself out of it or buy a lower cost alternative. Here's an example--I really wanted a high end pair of binoculars for hiking and to reward myself for reaching "semi-retirement" age. I wanted something compact so I'd be sure to always have them on me when I needed them. I originally looked at the Swarovski CL Companion series. I went to a few birder websites and many people said that they weren't much better than the Zeiss Terra ED series but cost 3+ times as much. Guess which ones I bought and am perfectly happy with?

I always packed a lunch when I was working, only rarely had fast food for lunch. I buy a lot of my clothing on eBay, I try to find new with tags items and only pay 50% of retail and look for free shipping. My two daughters grew up wearing garage sale clothes their Mom purchased the same way many times paying only pennies on the dollar for brand new name brand items. Every night when preparing for bed I take all the change out of my pocket and put it in a savings bank, I use this money to pay for the dog's vet bills. There are lots of ways to save, many are small and painless but it all adds up. Try it and see.

Good advise.

DON’t GET MARRIED


PERIOD!


Matter of fact, just stay the hell away from wimmens.

#10 is just wrong.

It's for the selfish and the lazy. Cut your hedges and mix your soup by hand. Simple, cheap, hand tools can do both
No excuse not to OWN THEM. Don't sponge off your neighbors.

#10 reminds me of advising people to cut expenses on travel by cheating wait staff out of their tips.

That's also WRONG.

I remember reading a book once where the key to saving money involved filling the space under your bed with canned tuna when it was on sale.

How about keep it simple and just do it? Ain’t rocket science.

Best just to not eat in restaurants.

I bring my lunch, save that money for guns,etc

Yep, it is.

He forgot #16 - stay off the campfire classifieds!!

Marry a smart woman, keep throwing it in a pile, use what you need, and let her take care of that financial/money/numbers chit, I got better things to do ;]

LOL, I spent 25 hunnert here in the last two days.

Wifey packs me a good nutritious lunch from home everyday I go to work, beats the hell out of that trash for sale in stores.

Does this mean I can't buy the new Schnee's Beartooth II boots I need for elk hunting..?

I like to go out for lunch. I do almost every work day. I like to get the hell out of the shop for 45 minutes or an hour, go somewhere nice, have a nice lunch. I drive a pretty new truck that gets 14 mpg because I travel to work and back around 80 mph, because I like to go fast, not to save time. My wife and I go out to nice restaurants frequently. What we want, we buy. We still save a lot of money. Life is too short to spend a lot of time and effort seeing how cheap you can live. If you can't have everything you want, make more money. It's not rocket science.

Our biggest waste is spoiled food . I have a wife that will not finish the food she cooks many times. She cooks too much at once and some goes to waste. I am super frugal. There is little that gets by me. As for saving, I will never buy a new car or truck again and will run them till they are junk. I do simple car work myself. We do go to restaurants about once a month, no more and we go to good ones but only if they have a special 2 for 1. Here is one that has really saved me thousands of dollars. I have decided that the Lord with contentment is great gain. I ask myself before deciding on a trip if I would be happy with a cheaper , closer trip. We almost never go on expensive trips and therefore dont miss much work. An example is we are going to celebrate our 31st anniversary . We decided to go where we went of four honey moon. That is Sault St. Marie Michigan and Canada. We will stay a few nights and go on the Agawa Canyon train ride. I doubt we will spend $ 800. I dont even want to spend that but must come to realize that bread aint a nickel anymore. We will drive through Upper Michigan, look at a 20 ac. parcel in Manistique , Mich . and be on our way. This is once every few yrs we do something like this and almost always a cheaper trip than $500. We stay in clean but cheaper motels. Trina wont camp period. Another thing that Orange Okie will agree with is very important. Investing in the future. It is imperative to invest in low cost investment companies like Fidelity. A full service investment broker will cost you many thousands of dollars . Mom had me look at some of her annuities last week. I was sick to see they were in index funds. NOTHING WRONG with index funds but found they were charging her 5% per year charge for index funds. I can't bear to tell her they took a good $ 50,000 from her in profits just to manage 3 index funds that I could manage for her for about 50 bucks a year. Gets me sick. It takes NOTHING to manage your own portfolio and will surely do better than 75% of the investment managers out there. Dont ever forget, it is NOTHING TO IT!. I have decided that sitting on the back porch cooking 3 bucks worth of hamburger is more peaceful than a 20 dollar bill for 2 burgers at a restaurant. I save darn near every extra penny. Even recalling saving my change and at home loan time I would literally take a good 10 bucks a month in change for extra payments to my home loan. Another thing we do all the time. We shop at Good will and Vincent. I am just a carpenter slug and clothes dont last long so Trina stops in and gets jeans for me when there is a size that fits. Many times I get 40 dollar jeans for 7 to 8 bucks and are better quality than Walmart. Any other suggestions are welcome. I dont believe I have cheated myself in any way by being cheap. I also give 1/10th to my church and I always have enough.

You don't need a list of 15 things you must do to save money. It is much simpler than that.

Think of it this way, most people will give a waitress 15-20% just for doing her job. So here is a foolproof way to become wealthy:
No matter where it comes from, as soon as you receive any money at all (earnings, winnings, gifts, selling your stuff, etc) take out 10%, never to be spent (that's the important part). You will learn that you can easily live on 90% of what you take in. You may eventually decide to borrow against your savings, but never spend it--invest it.

He who dies with the most money in the bank loses. Live life, have fun, eat good food and travel. Too many cheapskates live miserly lives of boredom, always afraid that they spent $2.00 too much on something they didn’t need anyway.

I have no idea how much time I have left on this mortal coil and I’ll be damned if I have to ask my neighbor to borrow a blender, mower, weed eater or di.ldo.

We do fine and I know we could save more money but I don’t GAF. I prefer to make memories with friends and family, love deeply, laugh often and not worry about saving money by stiffing a waitress on a meal.

Nailed it.

I do so wish I could bring up the Red Green show. Daulton Humphreys, saves 90%. No socks, underwear, toothpaste, ect.

That is the real secret. It's pretty difficult to save your way to prosperity. It's a lot easier to increase your income. Being poor does not equate to being virtuous.

What's wrong with doing both? My wife and I have plenty saved, yet we took a 2 1/2 week vacation/cruise to Australia and New Zealand earlier this year. The key is not to spend money on stupid stuff you don't need. I always hear people talk about how many "safe queens" they have. That's just another way of saying "stupid guns that I bought on the spur of the moment and have no use for". How about selling them or, even better, sitting on wants for a month to see if you still want them after that time. The answer is usually "no".

.....and being rich is no indication of virtue either.

Some of the most miserable cock suckers I’ve known had more money than they could ever spend. I wouldn’t trade places with them for anything.

God is great, beer is good and people are crazy....

I’d add to that, being wealthy is no indication of being rich..JMO

My dad was not a book smart guy, but he was over-run with common sense. Two things he told me when I was young I didn't forget:

1. Spend less than you bring home.
2. Learn how to give. The more I've given away, the more I've made. Funny how that deal works.

Nor is being poor.

Look, you need more coming in, than going out.

It's not how much you make, it's how much you spend.
Learn to live BELOW your means.

I’d tend to agree with both of you. All one needs to do is look at high income areas and look at the misery in the lives of the wealthly. Extramarital affairs, domestic violence, multiple bankruptcies, kids that hate their parents except when they get their monthly drug allowance, road rage and a complete lack of empathy is endemic to those with fat bank accounts. Having worked in law enforcement and the fire department in some of the highest income areas in this state has shown me that there’s little difference between the ghettos and the rich suburbs. The only difference is that the scum in the ghetto know they’re scum but don’t care while the scum in the richer areas not only don’t think they’re scum but believe they’re more important and better than anyone else. Turn signals and common decency rarely exist in both extremes. I’d not piss on either one if they were on fire.

Passbook loans? It's more economical to just use your savings and make putting it back in your top priority as you're able. No interest that way.

In my opinion, the whole thing turns on being intentional in working towards your goals. Mine are to work at something that is meaningful and I enjoy, make enough money to not have to worry about money, be kind and generous to those close to me, and try my best to treat everyone with respect.

I really don't have material goals anymore. A newer truck, nicer recliner, better scope or fancy gun does nothing to make me happier. Neither does eating at the latest "in" restaurant, or traveling to exotic destinations. Being in the field or woods does. Going to see my daughter graduate with her masters degree is important enough to endure a 10 hr plane ride -- no small sacrifice at 6'5", but they sell extra leg room, fortunately.

It all starts with being intentional, in control -- with work, money, and expenditures -- and people.

Then all you've done is saved up enough to spend on something and you're broke again. Very foolish.

You skipped part two of my sentence above. Here, I'll highlight it for you.

80% return on 20% effort.

Me either.

Buy it or make do without it. I hate to lend stuff and have it come back messed up or having to go chase it down when I need it.

I have some in-laws that are notorious for this. Apparently it is a way of life for some people.

donsm70

I think a better approach to #10 is to rent before you buy. I've done it with a lot of power equipment, from gas powered hand equipment (pressure washers, hedge trimmers, etc, to bulldozers and excavator). First it gives me an inkling of whether the job I want to do is capable of being done by a certain piece of equipment. Second, it gives me a good idea of the type of things to look for, or avoid, if I decide to buy a piece of equipment. I never borrow, or loan tools or equipment. I will, however, use my equipment to help someone - but I always operate it.

Where I live, almost everyone is a rich liberal, but only half have grandkids.

There is painful grandkid envy around here.

I think a lot of daughters could get a $2M contract to have a baby.

What kind of stud fee for having to slum a rich liberal.

Uhh....the secret to saving money is to not spend so much money,

Another good idea is to have your customers pay part of your workers' wages.

OrangeOkie: Heres how I became wealthy!
#1: Made good decisions.
#2: Worked more.
#3: Spent less.
#4: Enjoy the out of doors (Hunt/fish/hike/camp) its way less expensive than many other pastimes/hobbies/vacations.
Easy peasy.
Personally I can't stand to listen to dave ramsey on the radio - my decisions and status were made long before dave ramsey came along.
I am happy for him that he became wealthy but again a little of dave ramsey goes a long way in boring me.
Hold into the wind
VarmintGuy

Spot on.

Lmao. Not materialistic? Lmfao..

I know people putting as much money away as they can to help their adult kids. I might by them a dinner or two or couple tires for their car but I didn't bust my ass to give it away. My kids had a great childhood, better than mine and wanted for nothing. I'm getting to where some things are getting harder for me to do physically so I'm glad I blew a bunch of money hunting, camping, dirt bike racing and showing my kids a lot of neat things in this world. My kids know there won't be a lot of money coming their way when I croak but I like to think they got more out of me than money. My wife will be well taken care of so I got no worries or regrets. In a perfect world I would run out of heartbeats and money at the same time.

The best way is, don’t spend any!

Dave Ramsey is not for everyone, for sure. But he sure helped me become debt-free. When the student is ready, the teacher will come.

My depression era raised grandparents got me on the right track before I ever heard of Dave Ramsey. Gram & Pops your advice and example have served me well in this life so thank you.

Got a copy of richest Man in Babylon at around age 21

Also married a very good woman. When we first met (she was my first hire ) I convinced her to save 30% of her paycheck

Told her we were in the salt mine biz, not the gold mine biz. We’d have to salt some away if we were gonna have a decent economic future

So far so good. I’ve been extremely lucky to have the folks I have in my life

I've learned a few things about personal finance through mostly trial and error. The successful people I am acquainted with share several similarities.


1) Good health. (Sometimes you have control of this; sometimes not.)

2) Ethical, honest living. (No extra marital affairs, illegitimate children, lawsuits, drug abuse, etc.)

3) Strong work ethic.

4) A good spouse who shares their values.

5) A giving spirit.

6) They don't give a crap about what others think about what they wear, drive, live in, etc.

It took me awhile to fully embrace being smart with my money. Having a child is what forced the issue. Scraping by with big time credit debts and two car payments isn't sustainable, so I was just treading water then had to find room for day care bills. I sold enough and got on budget to handle that first $700/month bill, now comes number two, but guess what? Paying off my debts has freed up an additional $1300/month now, so there's probably even room in the budget for a third kid. Yes the $6,000 it will cost to have the kid will hurt and it will take time to rebuild those savings but if we hadn't gotten out of debt, I might never have been able to own either of these kids and I certainly wouldn't have been able to pay the hospital bills and monthly day care.
Having a kid forced me to grow up with my money. We don't make a lot in comparison to some, but being smart with it and getting on the same page has allowed us to take control of our finances. It does mean delaying some pleasures like expensive vacations and bigger toys like boats, campers and newer trucks. At the end of each month, we'd ask where our money went before learning to budget and using an app that we were both willing to put our inputs into (EveryDollar). We also had separate bank accounts, and forcing the sharing of our finances also forces us to talk about expenditures, planned or otherwise. It also forced us to talk about saving and investing.
Dave Ramsey's plan works, but only if you are willing to do your part. There is no refinancing or consolidating your way out of debt. Being unintentional with your money is an easy way to rack up debts that will take you forever to pay off. At one point my parents espoused the "use a credit card to build credit" idea. We all know better now. I have not cut up my credit card yet, but it's paid for, which I never thought would be possible through a long stretch of my life. The relief and freedom that smart budgeting and debt freedom has brought to us is hard to put into words, but there was a crushing weight and dread and embarrassment that it contributed to our household. Good riddance!

Very good advice. I did all that, except I feel you have to modify #6 if you interact with customers (sales) or when you're applying for a job. As for #1, there are no guarantees you can do this but you can sure bias it in your favor.

There is a difference between looking presentable and buying just for the name brand and latest fashion. I've yet to buy anything from a guy because he wore a Rolex watch for example.

Don't spend it!!

hunt in your socks... quieter..

If your outgo exceeds your income, then your upkeep will be your downfall.

An old saying from my grandfather.^^^^^


All one has to do to save money is to spend less than he makes. It ain't hard.

Just about every broke person I know would still be broke if they saw a sudden 500% increase in their income. They'd just have more garbage and crap scattered about their yard and house.

Good one Gregintenn. Many here are saying dont spend , or save more. True but you need to know how to invest . There is no building of wealth having it in the bank unless you make an awful lot of money.

Jesus saves--Moses invests.

A good way to save money is have your wife stay home and raise the kids.

LOL

Eliminating gambling really helps as well.



Fuuckin' machines will take every penny.

#11 would save most people a fortune.

#16 Don't get married.

#17 Stay out of the gun shop.

(Caveat- unless adhering to #16 above. Then, shoot away.)

One of the best things I ever did to save money was to set up automatic payroll deduction of $100 from every paycheck into a money market account.
I started doing that in my early twenties and was worried that I might be having too much taken out of my paycheck. I decided to start with $100 and if it became a problem, I could always cut back to $75 or $50. I did not miss the $100 from each paycheck at all. I encourage young people to do this.

Get paid twice a month? $100 x 24 = $2400/yr
After 4 years you’ve got $9600. Add some bonus money along the way and you will be at $10,000.

It seems that after a certain age a person has either figured that out, or they never will. I cannot imagine having worked for 30 years and have very little to show for it - to be working 40-50 hours a week and still be broke.

I have worked with some truly financially incompetent people.

I make a very good living in my trade and I’m always amazed at the old timers that don’t have a pot to piss in after working 30+ years. Drinking, gambling and divorce will do that to a fella I guess..


X-VERMINATOR

Bonus #16 - hunt with one rifle...............................reality - the reality of compounding interest is a very powerful tool.

DING!!

ZBoth?

From another thread, it would seem that the key to saving money is not to have credit cards.

It's ok to have credit cards as long as the balance is paid off in full every month.

It may be as simple as makin' up the mind to.

Very wise observation.

Yep. Huge. I've been able to pay off debts just by not buying lunches. I save $50-60 a week, so $200-240/month. That's a huge to me.

I agree. If you can't afford to buy the tools you need, you really can't afford the thing that requires the tools. And don't buy junk tools.


Dave hinted this with the email list advice, but kind of skipped it. Don't do shopping as entertainment. Shopping leads to buying. You should only shop for specific items that you have discovered you need.

Yep, and this is super easy with internet shopping. I've been guilty of just 'browsing' things of interest, finding great deals and pulling the trigger

I retired at age forty, I know the secret.

Are you remembering to subtract the costs of the components of the lunch you're making at home? Sure, much less, but it needs to be subtracted to get a valid figure on your savings.

I find the easiest way and most painless way was to have lots of money so setting a bunch aside is no big thang.

Really, the key to this is what Ramsey talks about a lot....deferred gratification. That simple idea applies to everything from buying new shoes to marriage (or just sex - if you think that comes before). Deferred gratification is THE big money saver and wealth builder. That's what gets people not born with money through the preparation or the hardships that lead to wealth. It's a skill that can be learned, but some never learn.

I agree with the renting. Then I try to rent the one I want to buy so I can get a feel for it.

Yep.

Interesting.

What does it cost you to live per year ?