NDSU Extension Service - Ramsey County


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Two Sides of a Coin

Two Sides of a Coin


For most of us, saving money is easier said than done. We have every intention to set aside money each month, but somehow life gets in the way.

While there are many techniques, tips and tactics for saving money, there are really only two ways to increase the amount in your savings account - reduce your spending or increase your income.

          You need to know where you’re spending money before you can reduce expenses. A great many people are unaware of where their money is going. We may have a general idea but are surprised when we discover how much is spent on little things like eating out, groceries and entertainment.”

To learn where your money is going, track your spending. Go back to the prior month and look at receipts and credit card and bank statements. As you go forward, track everything you spend for that month. This will give you a clear and accurate picture of where you’re spending money.

Once you know what you’re spending, you’ll be able to see where you can make changes. Some items are fixed spending such as a mortgage, rent or car payments. Other things like cellphone minutes, entertainment and groceries have more flexibility.  The variable spending is where you can find money for savings. Eating out less and making modest food choices at the grocery store are ways you can cut spending.

The most painless way to pay yourself first is to make it automatic. Your bank or credit union will assist you in setting up automatic transfers and some employers allow direct deposits into multiple accounts. Over time, you can watch your savings grow. Keeping control of your finances means that you can have more fun with your money. A budget provides more freedom to choose how you spend your money. Careful spending plus foresight savings is a strong formula for financial independence.

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