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How to Save Money Fast in 5 Steps

May 2, 2022

8 min

How to Save Money Fast in 5 Steps

If you’ve never looked after your finances, it can be difficult to get started overnight. Below we’ve collected the most common practices to manage a small budget, so you can get a head start on approaching personal finance.

1. Take control

The first step is to be aware of your finances. Keep track of your monthly expenses and income to see how much you can normally save, or how much you owe. Use your bank’s app to get an accurate list – every little bit counts.

Then distinguish between fixed and variable expenses. Fixed expenses are usually the most difficult (but not impossible) to correct, such as rent and bills.

You can act on variable expenses such as groceries and entertainment right away.

2. Pay off debt

It may seem counter-intuitive, but paying off debts before starting to save is important in order not to accumulate further debts and to avoid rising interest rates.

A method for paying off debts is provided by Elizabeth Warren, who we know today as a US senator, but who during her academic career at Harvard was specialised in bankruptcy.

It is the 50/30/20 budget method:

50% of income should be allocated to necessities, i.e. fixed costs such as rent, bills and food.

30% of the income is allocated to wants, i.e. variable costs such as meals out and subscription services.

Finally, 20% of the income goes into your savings. So, if you earn 1500€ per month after taxes, this means that you can save 300€ per month. In just one year, you will have paid off 3600€ of debt.

3. Set your goals

After paying off your debts, decide on a savings target that will allow you to maintain good habits and achieve your goals.

Remember that saving does not have to be about holding onto your money for years on end, as inflation erodes the purchasing power of money. In this article, we have explored the difference between investing and saving, and how these two activities can be optimally combined.

Start by thinking about what you would like to save for. Here are some examples of short- and long-term goals:

Short-term (1-3 years)

  • Emergency fund (3-9 months
  • of living expenses, just in case)
  • Holidays
  • Down payment for a car

Long-term (4+ years)

  • Down payment for a house
  • Children’s education
  • Retirement

You can start by setting a small, achievable goal in the very short term for something enjoyable, but big enough that you don’t have the money to pay for it right away, such as a new smartphone or Christmas presents. Achieving smaller goals can give a psychological boost that reinforces the habit and motivates you to continue.

After you have listed your goals for the different periods, also decide on their priority and the percentage to be allocated to them each month.

4. Set a budget and start saving

Following the tables below, identify your monthly expenses and income. The difference between your income and expenses is your profit, i.e. your budget.

track your expenses

What monthly budget do you need to reach your goals?

Once you have figured out the monthly amount you need to reach, start saving!

Here are some ideas for reducing your daily expenses.

Entertainment and extra

  • Find free or low-cost events to reduce your entertainment expenses while maintaining a high quality of life.
  • Thin out your subscriptions and keep track of those that renew automatically to avoid unnecessary spending. You can use your smartphone calendar to help you with reminders.
  • Reduce meals out to once a month and only try cheap places.
  • Think before you buy: when tempted by a non-essential purchase, wait a few days. You will be pleased to discover that you were right to give it up.
  • Sell what you no longer use
  • Try repairing damaged items yourself. Youtube is a goldmine for tutorials!

Need to boost your income? Consider looking for a part-time or freelance job and devote all your new income to your savings account. But be careful with your mental and physical health – the sacrifice could cost you more than you bargained for!

Another trick you can try is to choose a day when you do not spend even 1€. You will magically find plenty of alternatives and solutions to avoid expenses that have become mere habits.

Once this day doesn’t seem so difficult, try increasing it to 2 per month, and so on.

Fixed expenses


If you live in a city with a farmers’ market, you will often find very affordable prices and local, unpackaged and sustainable products.

A balanced diet should not be sacrificed for the sake of saving money; on the contrary, the repercussions of an unhealthy diet could mean extra costs in the future.

You can also plan your meals in advance, so you know how much they will cost and buy only the essentials. This also encourages you to eat a healthy diet and saves on waste because you avoid letting products expire.

Another smart money-saving option is to reduce meat consumption, which is not only expensive but often unsustainable. Replace it with legumes, vegetables and eggs.

Rent and bills

If you live alone, you might consider looking for a roommate even temporarily. This is a saving that can make a lot of difference, and you might even make friends.

If you already have roommates who pay less for a smaller room, ask them if they would be interested in switching.

For bills, there are more solutions than you think:

  1. Look for cheaper electricity suppliers.
  2. Replace old light bulbs with LEDs, which are much more energy efficient.
  3. Investing in a smart thermostat can help you regulate your heating remotely and avoid more waste.
  4. Consider other phone companies with active promotions.
  5. Automate payments to avoid penalty charges due to delays.

5. Choose the best management tools

Dedicating a separate account to your savings is the most common practice. This not only makes it harder to use for monthly expenses, but also avoids calculation errors and cognitive bias.

Even better if you automate the transfer of money to the savings account. If you have a highly digitised bank, it could offer all these functionalities.

By the way, if you find the experience with your bank difficult or non-transparent, if it also has high fees in proportion to the service, consider changing it.

Nowadays you don’t even need to go to a branch and it only takes a few minutes to open an account. Having a fully digital and smart bank usually also helps you to keep track of your spending more easily.

Controlling your spending is not just something you have to do at the beginning of your savings plan, but you have to do it every month so that you can adjust your strategy if you make a mistake.

Some smart banks also allow you to put a spending limit on your payment cards, which is very useful for these purposes.