The 3‑Step Playbook on How to Save Money

Why this Playbook Matters

Most “money saving” advice tells you to ditch lattes, live on rice, or memorize mind‑numbing jargon. Hard pass.

In the next few minutes you’ll learn a practical, latte‑friendly framework to start saving extra money.

Budget → Automate savings → Optimize Spending

By the way, Digital Ledger can help with everything we'll outline below. Sign-up for your free 30 day trial today. No credit card required.

You'll love this article if you...

• are brand-new to saving.
• need a quick refresher on the basics of how to save money.
• keep missing your savings goals but need a hard reset.

What This Article Is Not About

• Saving for short-term goals
• Retirement savings or developing a retirement plan
• Improving your credit score
• Making more money or investments
• Unrealistic savings hacks

Ready? Let’s get your money working for you.

Step 1: Create a Budget (Yeah, really)

Bottom line: a budget is just a plan for where each dollar goes. No guilt, just clarity.

Our favorite budgeting method: 50-30-20 + zero-based budgeting

50-30-20 divides your net income into 3 buckets of spending; needs, wants, and savings/debt. Usually it's a monthly budget.

1. Needs (50 %): housing, utilities, transportation, insurance.
2. Wants (30 %): entertainment, dining, streaming, travel.
3. Savings/Debt (20 %): emergency fund, extra loan payments, investments.

Example of 50-30-20:

Also, you can adjust those percentages to fit your lifestyle which will save you from losing your mind. Try it yourself with our free 50/30/20 calculator.

Zero‑based budgeting is simply ensuring income – expenses = 0 each month. In other words, every dollar gets a job.

Why it works

At the end day, you're going to get three main benefits from using this budgeting method:

1. Simple: three buckets anyone can grasp that apply across a wide variety of use cases and lifestyles.
2. Built-in priorities: having a forced ranking of essential vs. nonessential expenses generally leads to better spending habits.
3. Long-term financial health: emphasizing savings and paying off debt ensures that cash moves towards long-term goals at the end of every month. And that will give you the piece of mind that comes with a sense of financial security.

Deeper dive? See our 50/30/20 budget rule guide or our Digital Ledger explainer video.

Expense tracking = budgeting's superpower

If you don’t know where your dollars go, they’ll wander off and you'll never have more money for saving. Track for at least 30 days. But 90 days is better.

Because the most important aspect of budgeting is expense tracking. There are budgeting insights that you can only get from reviewing months of living expenses.

And those insights will manifest themselves in more mindful spending. You'll be surprised how much leaks out on mindless spending as we'll discuss below when we cover impulse spending.

We know, this sounds tedious and horrible. But budget apps can make this relatively painless.

We may be biased (of course we are), but we think Digital Ledger is the best for tracking monthly expenses. You can try it yourself for 30 days, free. No credit card required (sign-up HERE).

But if Digital Ledger isn't your jam (et tu, Brute?), here are some other options to review:

Want to learn more about Digital Ledger? You can check out our Digital Ledger User Guide and our YouTube channel o learn a little more about our capabilities.

Budget habit hacks:

• Use whatever method/system works best for you. Even the envelope budget method (ugh).
• If you're on a tight budget, then there is no shame in using a spreadsheet. Here is one for free.

Step 2: Build a Savings System (Goals optional)

Bottom line: Savings habit > savings goal. Habits beat hopes.

To clarify, it’s great to have a savings goal (like “I want $5,000 for an emergency fund” or “$2,000 for a vacation”).

But there is a reason that 2/3 of Americans feel behind on their savings goals (source).

The real magic lies in a savings system with the habits and tools that make saving automatic and consistent. Think of it this way: the goal is your destination; the system is the vehicle that gets you there, on time and on budget.

Pay yourself first

Treat savings as the first, non‑negotiable "bill" that you owe yourself. Systemize, automate, then forget about it.

When you get paid, you immediately put a chunk into savings before you pay any other bills or regular expenses. To start, the amount doesn't matter.

In other words, treat your savings like the most important “bill” you owe to yourself. This “set it and forget it” approach means you’re consistently saving without relying on willpower.

What it does:

• Separate savings from your spending money.
• Funds your financial goals before yolo into that avocado toast (because let’s be honest, nothing’s left if you don’t plan for it!).
• Continues to grow even if motivation evaporates. Think about it, you'll always have some amount for emergency savings.

Savings system habit hacks:

• Set up automatic transfers from your savings account either monthly or right after your paycheck lands.
• Gamify your saving habit.
• • For example, try the 52-Week Savings Challenge – save $1 in week 1, $2 in week 2, $3 in week 3... until $52 in week 52. By the end of the year you’ll have $1,378 saved up.
• If your employer does direct deposit, see if they can't split your check between your savings and checking account.
• Consider putting your savings into a high-yield savings account so you're less likely to withdraw on a whim.

Step 3: Build Better Spending Habits

Bottom line: You’re not axing every joy. You're just trimming fat in three high-impact areas to start.

This probably goes without saying, but covering your essential expenses or “needs” (housing, transportation, utilities, insurance, etc.) comes first. Often, these areas can be difficult to cut for any new savings strategies.

So we're going to focus on nonessential expenses, like "wants". And we're going to focus on small changes. Then you'll take that extra money and give yourself a raise (because you pay yourself first, remember).

Those three high-impact areas:

1. Impulse purchasing
2. Eating out
3. Subscription services

These areas have 2 benefits, they're easier to reduce spending in and you're probably spending enough excess to make the pain worth it.

Curb your impulse buying

Reality check: impulse purchases are monthly budget killers because everyone (yes, you) is vulnerable to the emotional triggers that cause it.

Not you?

Does this sound familiar? You walk into Target for toothpaste and come out with a new kitchen utensil, two shirts, and a pineapple 🍍 (why?!).

Or you see a Lightning Deal while online shopping and click! Now you have a new toy.

Some quick stats from Capital One shopping on impulse buying (source):  

• 73% of Americans say the majority of their expenses are unplanned.
• The average consumer spends $281.75 per month on impulse buys in 2024. That's $3,381 per year.
• 72% of online shoppers have impulsively bought an item due to an advertised discount.
• 48% of social media users have impulsively bought an item they first saw on a social media feed.

The data speaks for itself. Let's say you spend the average impulsively month after month, rounding up to $300 per month to make it easy. If you cut that in half, you're saving an extra $150 per month which is $1,800 per year.

At this point, you can start reinforcing that savings habit even further by buying something you really want with the extra money. Maybe invest in a new side hustle?

Food for thought.

Impulse buying habit hacks:

• Always have shopping list before you enter the store. Doesn't matter if it's for grocery shopping or clothes, have a list and stick to it.
• Use a 24-hour wait it out rule for any nonessential expense.
• Whenever you don’t make a major impulse purchase, transfer that amount into savings. You're rewarding yourself for saying no.
• Avoid credit card debt at all costs.
• Delete stored credit card info from one-click shopping sites. Adding a little friction can stop mindless spending.

Eat out smarter (and less often)

Reality check: food is a major spending category where habits make a big difference, especially when it comes to restaurant spending (yes, this includes fast food).

Let's look at a couple of fast food examples from CNET's study (source):

1. McDonald's quarter pounder w/ cheese combo
   • Restaurant version w/out delivery: $13.69
   • Restaurant version w/ delivery: $23.79
   • Cost to make at home: $4.63
2. Chipotle chicken burrito
   • Restaurant version w/out delivery: $14.25
   • Restaurant version w/ delivery: $24.40
   • Cost to make at home: $4.10

Based on those examples, you're saving an average of ~68% per meal. Non-fast food restaurants would be even more expensive.

And imagine if you're paying for a family of four. Yikes. Clearly, cooking more at home can save you a lot.

For example, if the average American spends over $3,000 per year eating out or $250 per month, you could save $170 per month or $2,040 per year.

Remember, you should be savoring splurges as occasional rewards, not a way of life. Your health and wallet will thank you.

Eating out habit hacks

• Switch at least one restaurant meal per week to a home-cooked meal.
• Only spend money eating out you don't have access to a kitchen.
• Only eat out on the weekends.

Tame your subscription services (silent cash vacuums)

Reality check: Recurring charges are stealthy: once they hit your card, they keep marching on and there isn't a notification for when you stop using the service.

Some stats from CR research (source):

• On average, respondents would underestimate their monthly spend on recurring subscriptions by 2.5x, thinking they spent $86 but actually spent $219.
  • That's $133 that slips away every 4 weeks!
• 42% of respondents stopped using a service but forgot that they still pay for it.  

This is an area that it pays to stay on top of month after month. And it's not just monthly payments, annual payments can creep up on you as well.

To help you stay on top, here is a monthly check-up you can do.

The 15-minute subscription monthly check-up

1. Open your banking, credit‑card app, or budget app.
2. Filter for recurring charges: “SUB,” “.com,” “*,” or “APPLE.”
3. If unused in 30 days (monthly plans) or 90 days (annual plans), cancel.
4. Set a calendar reminder one week before any annual renewal dates so surprises never hit again.

Deeper dive? Here is how you can spot recurring charges in Digital Ledger (LINK).

Serial offender subscription services and fixes

Luckily, there are some subscription types that are typically low hanging fruit:

1. Entertainment (cable, streaming, and music)
2. Software
3. E-commerce

For entertainment subscriptions, oversubscribing can quickly add up. Let's look at streaming companies as an example.

Do you pay for a Netflix or Hulu subscription to watch 1 or 2 shows a year? Then you're overpaying if you pay for the full year.

Plus, a streaming service like Netflix is expensive. That standard ad-free plan went from $7.99 to $17.99 over the last 13 years. That's a 125% increase in price, just so you can rent 1 to 2 shows per year.

No thank you. Our recommendation is that you either pick one core streaming service or rotate them as needed as your favorite shows are released.

Software subscriptions are the kings of forgotten subscriptions. 48% of people said they forgot to cancel it in this survey (source).

If an app hasn’t saved or earned you ≥ 3× its monthly cost in the past 60 days, cut it.

E-commerce subscriptions are tricky as well because people often buy them based on clever marketing tactics, then never get the full value.

Examples include Amazon Prime, Walmart+, Patreon tiers, or subscription boxes.

Often, the first couple of boxes will have the best products and deals to lure you in, but add less valuable products over time. These tactics are a combination of bundle-stuffing and intro-pricing.

Below are some tactics to watch out for when buying any subscription.

Sneaky subscription service tactics to outsmart (because we know you're clever):

Think about this: cancel just two $12 zombie subscriptions and pocket $288 a year.

Subscription service Habit Hacks

• Regularly go through your credit card or bank statements to spot recurring payments and cancel any “zombie subscriptions” you forgot about.
• Only pay for one entertainment subscription per category.
• If you need access to multiple streaming services, then rotate them as needed month-to-month.
• Seek out zero or low-cost entertainment: your local library offers free books, movies, even e-books and digital media.
• If an app hasn’t saved or earned you ≥ 3× its monthly cost in the past 60 days, cut it.

Start today, reap rewards tomorrow

Saving isn’t sacrifice, it’s strategy for financial health.

Budget with intent, automate deposits to Future‑You, and slice needless spending. Small moves compound:

• Nuke a $12 forgotten sub = $144/yr in savings.
• Swap one weekly take‑out meal = $500/yr in savings.
• Total: $844.

Stack a few of these wins and you’re funding vacations, safety nets, or even your first investment account.

Ready for a partner on this journey? Take these next steps:

1. Sign-up for Digital Ledger
2. Track expenses for free for 30 days
3. Start saving more!

Your future self will thank you—with interest.💪💰

‍