Haven’t you wished that you could save more of your hard earned money?   Money in the bank increases your options and takes away some of those end-of-the-month headaches.  Sometimes, it just seems that you just don’t know where to start.  But by taking small steps, financial victory is reachable; more of your money will be available to use for your financial goals.  Some of the suggestions in this article will fit your life and your situation, some will not.  Try to adapt the ideas you think you can fit into your life and you will find that slowly but surely, you will get big results.


“A penny saved is a penny earned”

“A stitch in time saves nine.”

– Benjamin Franklin

These two famous sayings describe the various ways in which savings contribute to your financial wellbeing.  Saving money allows you to set money aside to meet future needs or goals. You save money by avoiding unnecessary spending and reducing the amount spent on necessary items.  And you save when you conserve and take care of your possessions so you don’t have to spend money repairing or replacing them.

First look at what you are spending your money on.  Is it a “need,” something you cannot do without, or something you want?   Many things are a mixture of need and want.  Even with needs—shelter, food, transportation to work, medical care—there are still probably ways that you can spend less by shopping wisely.  If it is something you want—a new television, new clothes, a new car—look honestly at whether or not the purchase will fit into your spending plan: Can you pay cash for the item and still cover all your needs?  Do you have insurance and an emergency fund in place?  If not, you must take care of these needs before satisfying your wants.  Don’t pay attention to what others do, they may not be on the path to financial victory.

If you determine that something you want is not a true need, you can’t pay cash for it and are going to use credit, STOP and ask yourself:

  1. Will buying this thing on credit help me to achieve MY long-term financial goals?
  2. Will the thing I am buying on credit still have plenty of value when I am done paying for it?
  3. Does the credit payment fit comfortably into my spending plan?

If you can’t answer all of these questions with an absolute “yes,” consider whether you can wait until you have more money to buy it with cash instead of credit or at least have a more substantial down payment.  The pleasure you might get from possessing the item will be far outweighed by your worry and stress during the time you will be paying the credit bill.


One way to save money on things you need is to “comparison shop.”  The verb “to shop” is defined as “seeking and examining goods offered for sale.” Often we say we’re going shopping when more accurately we’re going “buying.”  To shop is to really examine and compare values.


Except for certain things such as electricity, there is competition among companies for your business.  Make them earn it.  You can comparison shop for goods as well as most services such as insurance, cell phone service, telephone service, cable or satellite television, home repairs, and Internet services.  When shopping for services, research prices, quality and restrictions.  Do not sign up with the first company you talk to, get quotes from several different companies and then decide what fits your budget and lifestyle best.


Compare ads in the paper or on line from the different supermarkets to see which one has the lowest prices for the food you like to buy or which appliance shop or superstore has the television you want for less.  From groceries to appliances you can compare and save on the products you buy.  Of course, you’ll want to figure in the cost of gasoline or public transportation to get you to the various stores when comparing possible savings from shopping at one place rather than another.  It would not save money to go to Store A to buy meat at $1.00 off if you have to spend over $4.00 worth of gas to get there.    Considering the price of gas, it may even pay to buy some things online if you do not need to examine the items before purchase.  Just remember to add all additional tax, handling, and shipping costs when you compare the online price.


Pre-shopping is researching or shopping for an item before you are ready to make your decision and before you go to a store to buy.  There are many sources of information to help you pre-shop such as consumer product magazines, newsletters and websites that rate and compare services.  Many companies have their own web sites so you can look at the product information and pricing on your computer in the privacy of your home or at the county library, without a salesperson trying to pressure you.  As you do your comparison-shopping, think seriously about what features you truly need, instead of features that are nice or flashy but you probably won’t use too often.  Don’t get romanced by all the “bells and whistles” that can be bought with an appliance or a service.  Think hard about what would be adequate for you.   If you do this pre-shopping before you ever set foot in the store, you will be less likely to be pressured into buying more than you wanted by an enthusiastic salesperson.

Pre-shopping will also save precious commodities—your time and transportation costs.  By figuring out in advance what you want to buy and where you want to buy it, you will spend far less time going from store to store in the actual buying process.  Whether you are buying a toaster, a washing machine, shoes, or a car, pre-shopping and comparing prices will save you money, time, and stress.


Everyone loves a bargain.  You can make your own bargains for both products and services if you use timing to your advantage.   Most stores have tremendous after holiday sales and after season sales.  If you see something you want for yourself as you Christmas shop, wait until the day after Christmas to get it when it will probably be significantly discounted.  If you can wait until June to buy your new spring outfit, most stores will have their spring line on sale.  Wait until the “white sales” are on to buy your towels and bedding.

Timing can give you savings on services as well as goods!  Cellular and cable services are discounted in advertised promotion.  Even your Dentist may offer a discount for work done during slow periods such as the holiday season.  So if you need non-emergency medical treatments, ask the health care professional if there are any discounts for scheduling the procedure at a certain time.  After all, it never hurts to ask, and it might result in a discount.



After you have done your pre-shopping comparisons and are ready to buy, try to avoid using a credit, if at all possible, to pay for the item or service.  Credit card balances are the easiest, most common way to get into debt trouble, so plan to use cash, or a check.  If you have the cash to pay your credit card balance in full, then using a credit card for the purchase is fine, and may even give you some benefits in case of faulty merchandise.  The point is not to carry a balance on a credit card.

Be aware that it is human nature for us to buy more and spend more when using “plastic” because it doesn’t feel like you’re spending real money.  Wait staff in restaurants know that they can expect bigger tips when credit is used rather than cash.   Even where you think you are getting a bargain, remember, if you cannot pay your credit card balance in full, the interest charged on the balance will make the price of your purchase much more expensive than if you had used cash, so it may not be a bargain after all.

Some stores and gas stations give a discount if you use cash.  In fact, many of the discount grocery stores require you use cash.  The savings in such stores usually are so significant from shopping at a regular grocery store that putting that plastic away and using cash will really help your pocketbook.  Using cash or checks will help you spend less so try to develop that cash/check only habit.  Save your use of credit for important things like a mortgage or an education– things that will retain their value long after you finish paying the credit bill.



We all need savings to survive.  Everyone should have an emergency fund of a minimum of 3-6 months’ worth of expenses set aside in a savings account that can be accessed without any penalties.  In any given 10-year period, 75% of our population will experience an “emergency” expense, but if you are prepared, it will be less of an emergency!  In addition, most people want to save for homeownership, education, and retirement or old-age.  Social security and medicare will not be enough to maintain the standard of living most people want.  This section will look at specific strategies to help you save or save more.  But first, some saving strategies that are not recommended!


Eliminate Debt Before You Build Long-Term Savings

Many people carry balances on credit cards but have more money saved than what it would cost to pay off their debt.  This does not make good financial sense since credit card interest costs more than the return you can get on investments.  Of course, it is wise to keep at least some cash “cushion” for emergencies, but in general, you should pay off any credit cards or store accounts before building your long-term savings.  To get detailed help on paying off your debt, go to the University of Utah’s free Power Pay tool at  This free tool will show you how to pay off your debt the fastest and most cost-efficient way.

NOTE: “Eliminating debt” before you build savings means that you not only pay off your credit cards, but keep them paid off! This in turn means that you have a balanced spending plan so you won’t have to run up more credit.  Butterfly has a Spending Plan tool to help you with this.


Don’t Use Tax Refunds As Savings

Many people consider tax refunds to be Christmas in April—a kind of forced savings account where you pay in all year but then in April/May you get a nice check from Uncle Sam.  However, that is NOT a good savings strategy.  If you usually get a large refund from the government, it means too much is being taken out of your check each pay period.  Money that the government is holding for you is money you earn no interest on.  More importantly, this money that’s not in your paycheck is money that could prevent you from going into debt.  Since the IRS doesn’t pay you interest on the extra money it’s holding in your name, why let them hold more of your money than is necessary to pay your tax?  Talk to your employer’s personnel office or your tax preparer to figure out the number of exemptions you need to put down on your W-2 to make the amount taken out each month more accurately reflect the amount of tax you’ll owe the government.  You’ll get a smaller refund at tax time but you’ll have more money each pay period to help you balance your budget or earn you interest in a savings account.   That’s smarter than letting the government earn the interest on your money all year.


Pay Yourself First

You probably have heard the phrase, “pay yourself first.”   This does not mean indulging your “I wants” before paying your bills.  Paying yourself first means that the first thing you do each pay period is put a little bit aside in a savings account.  If you put away a do-able amount for savings before you spend anything or pay your bills, you will have the beginning of an investment fund or emergency fund.  The idea is that if the amount is reasonable for your budget, you will simply have less to spend and, having less for non-essential, you will make the amount left after the savings deduction cover your expenses.  By putting this amount in a savings or money market account, you will earn interest so the amount of money saved will grow.  The hard part is deciding how much to put aside and then having the discipline to do it.  There are several ways to make this saving easier.


Automate to Accumulate

If your paycheck is direct deposited into your bank account, you usually can direct that some of that money  go directly into a separate savings or money market account.  This makes your savings automatic– the amount you save never even shows up in your checking account.  If you make a realistic amount of savings automatic and plan your spending around the amount that you have left, it won’t be long before you don’t even miss the money now going into savings.  The sooner you start, the sooner that nest egg starts growing.  Remember, extra money in the bank gives you options that you wouldn’t have if you did not have that cash reserve.

Example: Ruby started having $100 taken out of her pension check each month and put in her savings account.  With a good interest rate on her account, at the end of three years, she had nearly $3800.00.  When Ruby needed hearing aids, she was able to take advantage of a sizable discount for a cash purchase instead of the installment plan.  Ruby saved on the hearing aids and still had a good nest egg left in her savings account.

If you are not already doing so, take advantage of any deferred compensation or 401(k) program your employer offers.  This can also be “automated” by having some of your paycheck diverted to the program.  These programs are a big help for retirement savings because the money you contribute is “pre-tax” so you don’t have to pay tax on it now.  Even better, many employers actually will match some of your contribution to such a program, so by contributing, you get extra money from your employer.  Be aware that this type of savings is strictly for retirement; in most cases you cannot draw out money until you reach a certain age without incurring significant cash and tax penalties.  So retirement savings through your employer is something to take advantage of after you have the essentials of insurance and an emergency fund of 3 to 6 months’ worth of expenses in an account you can reach with no penalties.


Bank the Change

Do you find that you are carrying around pockets full of change?  Are there pennies and nickels lying around your house?  Dump that change into a can or jar and then once a month, take the change to the bank and deposit it in your savings account.  You will be surprised how much you can build up in a year that way—and your pocketbook or pockets won’t seem nearly so heavy.


The Envelope Method

To reach your financial goals, you may need to change your spending habits.  A great way to get control over your spending is use the “envelope method.”  First, make a realistic spending plan.  Butterfly has a spending plan tool that can be a big help with this.  Once you have developed a thorough, accurate spending plan that balances your spending and accounts for an amount to go into savings each month, try the “envelope method.”  Here’s how it works:

Continue to pay your essential monthly bills such as home utilities, car payments, insurance and rent or house payment.  For all other expenses (food, gasoline, cell phone, etc.) put the cash amount your spending plan has allocated for each area into separate envelopes.  So, based on your spending plan, you’ll have separate cash envelopes for each other expense you have such as “food/groceries”, “entertainment,” “transportation,” “personal grooming,” “clothes”.  When there is no money left in the envelope for that particular category, you cannot spend any more on that category until the envelope gets refilled when you are paid again.

This method works because you actually see what you have left each time you reach into an envelope to get the cash for an item. For example, you look into your transportation envelope and see that the high pump prices have left you with too little to get to work next week.  So you are left with the option of finding another, less expensive way to get to work such as taking the bus or train, or taking money from another envelope and cutting your spending in THAT area.  Many people swear by this method since it shows you what is happening to your money in such a concrete, visual way.  You may wish to put your receipts into the envelope as you pay for things so that at the end of the month you can see exactly where the money was spent within the separate categories of expenses.  This information will help you to change how you are spending your money in the different categories.



Do you often get to the end of a month or a pay period and have no idea where your money went?  We call this a money leak because the money seems to just leak from your pocket.  The best way to stop these money leaks is to track your spending every day for a month.  This means carrying a little notebook or index card and a pencil to record every purchase you make each day.  You must be strict about not spending a single penny without writing it down.  If the entire family does this, you’ll quickly identify areas in which you can save and behaviors that can be changed to result in significant savings.  For instance, tracking your spending will probably leave you surprised at how much your family spends on food and beverages away from home.  Packing lunches to carry to work and school can save substantially and allow you to eat more healthfully.  You can pack those lunches as you are cleaning up after dinner and avoid the morning rush.  Stopping money leaks can become a competitive sport or game in your family.

Here’s a true example:

Jerry had to do all the grocery shopping during his wife’s illness and he couldn’t figure out where all the money went.  Then he got interested in how much he could save and began using coupons and buying generic brands when possible.  He compared his weekly savings with those of his wife’s friends and became so good at his competitive savings game that when his wife got well he continued to do the grocery shopping.  Their children nicknamed him “Generic Jerry” but they followed his example of frugal grocery shopping.


Children Can Help You and Learn at the Same Time

Stopping money leaks is also a wonderful family activity.  When asked to, children are usually eager to help their parents with any project, especially if they understand the possible rewards.  This is also a good way to begin to teach your children about money.  Ask your kids to help you with specific saving strategies, such as packing lunches each night and frugal grocery shopping, their enthusiasm can be a big help.  If you put savings in specific terms that have real meaning to your children, saving can become a competitive game for them to see who can save the most.  When motivated, children generally are more persistent and detail-oriented than adults.  If your kids are motivated by the goal and understand ways to save, they can help you tremendously.  For example, if a child could be told that the family needs to save in order to have a vacation, or simply to continue to make ends meet, and is given information on savings, that child may stop you from spending on unnecessary items or help find bargains for you.  An understanding of the family finances may prevent demands for new video games or expensive shoes.  Advertisements are aimed at children, so having your child part on your savings team will go a long way to reducing the influence of advertising.


Tracking Spending to Stay on Your Plan

Tracking your spending by writing down every single cent as it is spent isn’t just a way to stop money leaks, it’s a way to get a reality check about where you are deviating from your spending plan.  For example, the major increases in energy, transportation or medical costs may be consuming much more of your income than your realize and than your spending plan reflects.  Knowledge is power and you can’t balance your income and expenses until you know exactly where your money is going.



If your spending plan doesn’t balance, you must take action!  If you’ve done all you can to track your spending and eliminate money leaks but your expenses are still more than your income, you’ll have to make bigger changes to reduce your spending, increase your income, or both.  BIG changes may be necessary to get back on track, but the sooner you bite the bullet and make those changes, the sooner you will get yourself out of the stressful debt cycle.  Sometimes drastic change is necessary to get yourself back on your feet financially.

One solution is to get a roommate or housemate to share the cost of utilities and rent or the mortgage payment.  Of course, be certain you learn enough about the person to feel confident that you will get along with them, and that he or she is a trustworthy person who will and can make the agreed payments and will do his or her share in keeping the house or apartment clean.  To be clear on both sides, be sure that both of you sign a written agreement setting out the rights and responsibilities of each person.

If you are self-employed and have an office outside your home, consider moving your office to your home.  This eliminates office rent and utilities and you’ll also save on transportation costs.  Having a home office also allows you to eat at home, in itself a substantial savings.  And usually a portion of your home utilities and rent or mortgage payment will be tax-deductible when you have an office in your home.  Check first to be sure that there are no covenants or rules against a home office where you live.  If there are none, and if your business is something that can be run out of your home, give it a try.  However, if you are self employed and even with expense reductions, you still are not making a profit or breaking even after giving the business a chance to get started, it is probably time for a reality check and for you to go get a job that brings in a steady paycheck.  It’s hard to give up a dream, but you must face reality and perhaps defer your dream until you become stronger financially and have saved more capital to cushion your own business.

Increasing your income is another big change you should consider.  Another job or a part time job for you, your spouse, or your teenage child, even for a short period of time, might bring in the extra cash to eliminate some debt and balance your spending plan.  Be sure to think through the realities of what any extra employment will require in terms of time, and transportation or child-care expenses. When they are given an understanding of why you need the help, most teens are proud to be a part of solving their family’s financial problems.

Sometimes, due to childcare responsibilities, you cannot leave the house.  This does not make you unable to do part time or even full time work.  You can work from home.  While this area is full of scams and fraud, if you take wise precautions, it is possible for you to earn some additional income from home.  Warning: do not take this step without first  researching the company and learning how to avoid the scams.  Do not work for anyone who first wants money from you, even if they claim it’s money they will return.  Additional information on how to avoid scams in this area is available from the Federal Trade Commission, the American Association of Retired Persons or the Better Business Bureau.

Remember that while you cannot borrow your way out of debt, your parents or a sibling might be willing to give you some short term help until you get back on your feet.  Try never to borrow from anyone, but go to your family before you resort to high interest loans or payday lenders

Finally, in a drastic situation, you may need to find affordable housing or move in with someone else until you can balance your spending plan.  If you have a family member or friend who has the room and is willing, consider swallowing your pride and moving in with them for a while.  It may cost you some of your independence, but this can really help you get back on your feet.   This option is one you would only use in a drastic situation, but it is an option if your back is against the wall financially.  No matter how dismal your situation, there are always options and you have the power to change your current circumstances for the better!

written by Victoria Wright J.D.