top of page

Save More, Stress Less: A Step-by-Step Guide to Building Your Savings

Do you ever find yourself struggling to make ends meet? Saving money can help you avoid struggle and stress and prepare for unexpected expenses. When you save, you set aside some of your hard-earned money for later use instead of spending it all immediately (Burnette, 2023).

Saving can alleviate financial stress by creating a financial safety net, paying for big-ticket items without going into unnecessary debt, and even preparing for retirement. In this article, we’ll talk about why saving is important, easy ways to save, what you should save for, and the different options you can choose from to save money.

How to Save Money:

A great place to start when trying to save money is creating a budget. A budget helps you see where your money is going and identifies areas where you can reduce spending (Neidel, 2023). To make a budget, simply write down all your income and expenses. Be sure to include everything – even small purchases like your morning coffee. Doing this will allow you to review your expenses then and determine where you can make changes. For example, you might decide to bring your lunch to work instead of eating out every day.

Another way to save money is to track your spending (Neidel, 2023). This step is like creating a budget, but instead, you only focus on expenses. You can do this by writing down what you spend money on in a notebook or by using an app. Tracking your spending helps you stay accountable and can make you more aware of your habits (Camargo, 2023).

Savings apps and other digital tools are a great way to help you save money (Camargo, 2023). Many apps help you save automatically or round up your purchases and put the extra money into your savings. Similarly, you could set up an automatic transfer from your checking account to a savings account to make the process even easier.

By completing one of these first two suggestions, you can cut unnecessary expenses. You can look at your budget and see if there are any expenses you could live without. For example, you might cancel your gym membership if you haven't been going regularly. Or you could switch to a cheaper phone plan if you're not using all your data.

Saving money is all about making the process a habit. It’s best to start by saving a small amount each week or month and then gradually increasing the amount over time (Neidel, 2023). You'll be surprised how quickly your savings can add up.

What to Save For:

When saving money, having a clear idea of what you’re saving for is important because these goals will make it easier to stay motivated and track your progress (Honeycutt, 2023).

One goal you could save for is an emergency fund. An emergency fund is a savings account you can tap into when unexpected expenses arise, such as a car repair or medical bill (Burnette, 2023). A general rule of thumb is to build your emergency fund to have enough money to cover three to six months' worth of living expenses.

Another reason to be saving is for short-term or midterm goals. These are savings goals that you’d like to obtain within the next year to five years. (Honeycutt, 2023). Often, short-term savings goals include things like a new piece of furniture or laptop. Meanwhile, midterm goals include vacations or a down payment on a car. These goals require specific savings targets and plans to save a set amount each week or month until you reach the savings target.

Long-term goals, like buying a house or saving for your child’s education, are also important to save for. The timeline for long-term goals is typically five or more years (Honeycutt, 2023). These goals often require more planning and discipline, but the payoff can be significant. To save for long-term goals, it's important to start early and be consistent with your saving.

Savings Vehicles:

Now that we’ve covered how and what to save for, we can discuss the different types of accounts you can save your money in. Choosing the right savings vehicle can make a big difference in how much interest you earn and how quickly your savings grow. Here are some options to consider:

  1. Savings accounts: A savings account is a basic and easy way to save money. These accounts are usually offered by banks and credit unions and typically pay some interest on your savings. However, the interest rates on savings accounts are generally quite low, which means your savings may grow slowly (Folger, 2023).

  2. Certificates of deposit (CDs): CDs are another type of savings account that generally offer a higher interest rate than a traditional savings account. With a CD, you agree to keep your money in the account for a set period of time, such as six months or a year. If you withdraw your money before the CD matures, you may have to pay a penalty (Folger, 2023).

  3. Money market accounts: Money market accounts also typically offer higher interest rates than traditional savings accounts. However, these accounts often require a higher minimum balance to open and maintain (Folger, 2023). Money market accounts also make it harder to access your money – you can’t withdraw from a money market account at an ATM, for example.

  4. High-yield savings accounts: High-yield savings accounts are similar to traditional savings accounts, but they typically offer much higher interest rates. These accounts are often offered by online banks and credit unions and can be a great option for short-term savings goals or emergency funds (Folger, 2023).

The accounts listed above are great for saving for short or long-term goals, but when it comes to saving for retirement, you’ll likely want to use your employer’s 401(k) program or an Independent Retirement Account (IRA). These accounts are more complicated than the accounts listed above and require more detail to explain fully in this article. Basically, with a 401(k) or an IRA, your money is invested in the stock market, allowing you to earn a higher rate of return (Hayes, 2023). However, they are riskier than the previously mentioned accounts and have penalties for withdrawing your cash before a certain age.

Saving vs. Investing:

So far, throughout this article, we’ve been discussing the concept of saving. Often, people get saving confused with investing. While saving and investing are both critical for building wealth, they are not the same thing. Saving is the act of putting money aside for future use while investing is the act of using your money to buy assets that have the potential to increase in value over time (Hayes, 2023).

Saving is generally considered low-risk, as you are typically putting your money into a savings account or another low-risk account, most of which are guaranteed by the U.S. Government. With these accounts, you won’t lose money unless the U.S. Government collapses – highly unlikely. Investing, on the other hand, involves more risk, as there is no guarantee that your investments will increase in value.

It's essential to have a balance of both saving and investing in your financial plan. Saving can help you build an emergency fund and achieve short-term financial goals while investing can help you grow your wealth over the long term. Understanding the difference between saving and investing can help you make informed decisions about managing your money.


Saving money is one of the most important aspects of personal finance that everyone should prioritize. By understanding the importance of saving, how to save effectively, what to save for, and the different savings vehicles available, you can take control of your finances and work towards achieving your financial goals.

Remember, saving doesn't have to be overwhelming or complicated. With a few simple steps and a commitment to building good financial habits, you can start saving today and work towards a more secure financial future.

Works Cited:

Burnette, M. (2023, February 17). Emergency Fund: What It Is and Why It Matters. NerdWallet.

Camargo, M. (2023, May 3). How to save money (And spend less): 50+ tips for 2023. CreditKarma.

Folger, J. (2022, April 7). The 7 Best Places to Put Your Savings. Investopedia.

Honeycutt, B. (2023, April 11). Savings Goals: How To Set And Achieve Them. Forbes Advisor.

Neidel, C. (2023, May 1). How to Save Money Now (Before You Really Need It). NerdWallet.



bottom of page