Sense & Centsibility Blog

Start Your Savings Plan With This Simple Three Step Process

One of the most common goals of people who come to us for financial counseling is to have a savings plan. Of course, being a financial counselor, I advise folks to track their spending, set up envelopes, save coupons, reuse, blah blah blah. All good advice, for sure, but I often find the more tasks I set forward, eyes begin to glaze over and the less motivation I detect.

Most of us can save something. Maybe a simple three step process is the trick:

Step One

Have a goal. Studies show people are more likely to save if they have a goal. Could be:

I, of course, being a financial counselor, would recommend Emergency Savings as a primary goal. Nothing like money in the bank to provide some comfort.

Step TwoCouple with piggy bank

Spend a little time adding up monthly expenses – focus on what you NEED to spend money on:

  • Rent/mortgage
  • Utilities
  • Transportation
  • Loans and credit card payments
  • Enough food to keep your family alive and healthy
  • Other basic necessities like clothing, diapers, medical needs (emphasis on basic and necessity!)

Subtract the total from monthly net income. That's how much you could potentially be saving. Of course, we know there is so much more to living than the basics. That's where you'll have to make some choices and weigh them against your savings goals.

Step Three

Go to payroll (often can be done online in your pajamas) to set up direct deposit to your savings account. Or, have your financial institution set up an automatic transfer each pay period. Keep in mind:

  • Be realistic. Is saving $500/month really feasible? Start with $100 or $50 or even $20.
  • You can change it.
  • You will naturally adjust to less money in your checking account by eating out less, shopping for fun less, or whatever other non-essential spending you like to do.

No cheating by using credit cards to make up the difference! Remind yourself you are doing this for YOU!


Now, I also know that many of us are really struggling just to cover the basics with our income. There are other ways to build up savings, like:

  • Save change in a jar
  • Save your tax refunds and other windfalls of money
  • Sell things, even your blood
  • Pick up some extra work
  • Have older children pay for their own phones and car insurance

Our bloggers have written extensively on the value having a savings plan and how to do it...check out: How to Trick Yourself Into Saving Money and Got Savings? How to go from $0 to $2,000 in one year.

Remember, saving is not a deprivation. Quite the opposite! You are building security and the happiness that comes with it!

Author Mary Ellen Kaluza is a Certified Financial Counselor with LSS Financial Counseling and she specializes in budget, credit, debt counseling and financial education.