How to Aggressively Save Money Each Month

*This post has been reviewed by an Illinois Registered CPA. However, when making important financial decisions, it's best to speak with your financial advisor.

Last Updated on June 6, 2022

Saving Money Aggressively

When you’re young, saving money is not a priority, but it doesn’t take much time to realize priorities change. You’ll soon want a house, travel the world, or find yourself waiting for your first baby. That changes things.

For example, moving to a bigger place or sending your child to college may suddenly appear on your to-do list. You now need to save money for these considerable expenses. Putting some cash aside wasn’t part of your routine? Then, you’ve got some serious work ahead. With this article, assess your financial situation, create a realistic budgeting plan and adjust your lifestyle to save money each month aggressively.

How to Aggressively Save Money – 3 Essential Factors

Do you ask yourself, why can’t I save money? Then, brace yourself for a considerable effort. Going from not saving anything to aggressively saving money each month is possible but might not be easy. It usually takes a combination of three significant factors to manage it:

Enough income for both your necessities and savings.
A strict and realistic budgeting plan.
Ambition and commitment to stick to a fixed budget.

Let’s take them one by one to see which one of these three areas you might need improvement to save money.

Income

Saving money mainly depends on one thing – your monthly income. There is no rule on how much you can or should save based on your income. Some people may earn $10,000 per month and put zero dollars into their savings account.

How much you save usually has to do with lifestyle habits. The more you make, the more you may spend, negatively affecting your savings if you don’t manage your money well. Others may earn $3,000-4,000 dollars per month and still work to set something aside. Again, it all depends on each person’s lifestyle.

The type of earner and spender you are will affect your ability to save money. There is yet another category, people who can’t afford to put money aside. It might be the case for those who have a lot of debt. Do you hardly manage to pay your mortgage, credit card debt, and utility bills? Do you live frugally with what remains of your paycheck? The first step to saving money might be to increase your income. Here are a few solutions for this:

Change jobs or ask for a promotion.
Work extra hours.
Get a part-time job.
Start working freelance in your spare time. If you’ve got specific skills, leverage them. Such skills include teaching courses online, selling or marketing products, etc.

Increasing your income can also mean cutting down on your expenses, but there is little you can do if your budget is already limited. For example, you could volunteer for an association in exchange for free meals or other perks. One meal per day can amount to hundreds of dollars at the end of the month.

Budget Plan

It’s important to understand that budgeting is key to being able to save money. You might not know where your money’s going because you never track your spending. Then, you can’t figure out how much you could put aside. Budgeting means allocating fixed amounts to your monthly expenses. All the while, it means leaving something aside for your savings account. It takes a few basic steps to start budgeting:

Calculate your average income.
Calculate your monthly expenses.
Deduct your expenses from your income.
Divide what’s left into two categories:
1. Money you can spend
2. Money you put aside

It’s helpful to leave room for a buffer in category 1. You can dip into this emergency fund for unpredicted expenses, such as medical bills or car repairs. If these expenses are not necessary, add the buffer to your savings account.

Commitment

This idea speaks for itself. Without commitment and ambition, tips on how to aggressively save money won’t suffice. It would be best if you had the mental strength to stick to a strict budgeting plan once you have it. Saving money should become a habit, a way of life that can substitute the toxic habit of spending out of impulse.

The good news is that there are various digital tools to help you out. For example, internet banking features can help you put money into a savings account through automation. You also gain interest on funds you transfer there. In addition, you can choose to withdraw the money after a certain period.

There are also plenty of budgeting apps. Use them to create a customized budgeting plan and follow it. These apps have numerous features. For example, they can notify you once you approach your spending threshold. Likewise, they can warn you when your balance is low. These apps connect to your bank account. That is how they track your spending in real-time. They offer at-a-glance reports.

You can also set different personalized goals from the app. For example, create a goal to save a minimum monthly amount. You can learn more about these apps in some of our reviews. This Mint App Review or this article about Wally are good starting points. You can use these apps both for their budget tracking features and as a tool to save money.

How to Save Money after Each Paycheck

After each paycheck, send money to savings as soon as it hits your account. That is when your entire regular check is available. It is the best moment to transfer cash into your savings account. Doing it later when you’ve already spent half of your wage may mean less money available for savings. Instead, move the amount you can afford to save. Then, budget with care to live off of the remaining amount until your next payday.

Pay Your Debts to Save More Money

Debt and savings are often incompatible. If you have too many of the first, you can’t afford the latter. Are you currently overwhelmed by debt? Before you consider saving money, you should first tackle debt. There are different solutions. For example, use the debt snowball method. This strategy allows you to repay your debts, starting from small to large. Begin by focusing on the smallest debt. After you pay it, move on to the next smallest one, and so on.

Once you become debt-free or have manageable debt, you can start putting money aside. Even then, it’s essential to avoid making new loans. Having no debt will also help you fix your credit as fast as you can. Steer clear of credit cards and pay your bills on time to avoid penalties. The half-payment method is a budgeting strategy that can help you handle your bills more easily.

Save Money Aggressively by Automating Your Payments

Automated payments help you save money by default. Set automatic payments into your savings or retirement account each time you get a paycheck. Your employer can help you by directing a portion of your wages into your savings account.

You can also set automatic payments for your bills and subscriptions. Automatic payments make it less tempting to use your savings. This money quickly vanishes from your current account, and hopefully, you forget about it.

Try to Save Money by Spending Less

Cutting down on your living costs might be a way to save money if you can’t increase your income. There are many expenses you can adjust to make sure you save more money. Here are a few recommendations:

Start cycling more often to save money on gas.
Give up subscriptions you don’t use.
Use less electricity, energy-efficient light bulbs, a smart thermostat, etc.
Wash your hands, face, and clothes with cold water to avoid spending more on hot water.
Check second-hand shops first. They cost far less and are sometimes as good as new.

Popular Budgeting Methods to Save Money

If you’re wondering how to aggressively save money, you need to rely on a sturdy budgeting strategy. Here are a few options.

The 50-30-20 Budgeting Strategy

The 50-30-20 budgeting method is one of the most effective budgeting. Direct 20% of your monthly income toward savings through this strategy. Here is how you divide the rest. First, half of your budget goes towards necessities, such as rent, gas, etc. Then, the remaining 30% goes towards your wants or things you enjoy buying.

The Envelope System

The envelope system involves dividing your budget according to your expenses. After you’ve done that, you can physically put cash into separate envelopes for each type of expense. You can also create digital envelopes via budgeting apps or banking tools. Don’t use one envelope’s funds to cover another one’s costs. Only stick to what you have in each envelope.

The 60% Budgeting Method

This strategy resembles the 50-30-20 method. It implies using 60% of your budget for necessities. Here, you can include the following:

Utility bills
Housing expenses
Groceries
Transportation
Taxes
Insurance

The remaining 40% goes into your savings account and hobbies. Divide it into four categories:

Short-term savings
Long-term savings
Savings for retirement
Hobbies and entertainment

Use 10% for each of the four categories. Make sure the money dedicated to long-term savings is harder to access. That way, you don’t risk dipping into this account.

Value-Based Budgeting

With this method, you categorize your expenses based on their value. In other words, itemize according to how important each category is for you. Then, you can focus on whichever category you want.

Follow the same general budgeting rule found in the other strategies. Only spend the allocated budget on each expense. If you plan to save money aggressively, savings should be the priority. For example, after paying rent or mortgage and utility bills, your monthly budget is $3,000. You can divide it as follows:

Expenses	Amount
Savings	$900
Food	$1,100
Gas	$500
Hobbies	$350
Others/buffer	$150

Zero-Based Budgeting

Through this strategy, every dollar goes to a specific spending category. All the budget lines, including savings, represent expenses. You will reach zero when you deduct your expenses from your income.

This budgeting method prevents irregular or reckless spending. Each dollar has a role. Also, this is a flexible budgeting method. You can change your expenditure categories and their budget each month. Here is an example.

Monthly budget $5,000
Expenses categories	Budget
Mortgage and bills	$2,000
Food and other necessities	$1,700
Nonessential spending	$800
Savings	$500
Amount left	$0

Frequently Asked Questions (FAQs)

How can I Save Money by Increasing My Income?

There are different solutions to increasing your income. One of them is to get a side hustle. You can also try to change your job for one that pays more or work extra hours to earn more. Once you increase your income, it’s essential to maintain the same lifestyle. The extra money goes into your savings account, not your expenditure.

How can I Aggressively Save Money by Reducing My Expenses?

Establish a strict budget for each type of expense. Generally, spending less on your wants will also help you save more.

How Much Should I Be Saving Each Month?

It depends on how much you earn and your monthly debts. Of course, 20% is ideal, but you’re still on the right track if you manage to save at least 15%.

How to Cut Down on My Groceries Expenses?

You can put aside hundreds of dollars each month by cutting your groceries expenses. To do this, try to buy discount products or bulk items. Then, do your shopping in the stores that offer the lowest prices.