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Saving money is a skill that ultimately takes some time to cultivate. Despite the fact that it does take time to change habits that result in lower savings, in the end it is possible to put more money in the bank than most might expect. Following a few simple tips can start on the path to cutting back on spending and putting away more emergency funds.

Balance the Checkbook

Take time each month to balance the checkbook. Put in every receipt and expenditure to see where money is going and how much is spent on unnecessary items like that expensive coffee or those extra cookies added to the groceries.

Note every extra expenditure that was not necessary. Those small luxuries add up quickly, particularly when they cost a few dollars each. By noticing where the extra costs are adding up, it is possible to then start working on cutting back on the luxuries to add up in yearly savings.

Make Use of Coupons

Coupons, whether they are online coupon codes or physical coupons from the newspaper, are useful tools to help cut costs. Finding coupons for necessary items like groceries can help lower the expenses without requiring extra effort. Instead, just bring the coupons to the store or type in the coupon code when buying online to add a few extra dollars in the bank.

Those few dollars off or the coupon to save ten percent might not seem like much, but by the end of the year with constant use, it adds up to cash in the bank.

Pack Lunches

Eating out at lunch time or sending the kids with a few dollars for a school lunch adds up quickly by the end of the year. Even paying two dollars per person adds up quickly after a full year of five days a week. Packing lunches is not only more economical, it ensures the meals are healthier as well.

Packed lunches can include anything from the traditional sandwich with a side of carrots or apples to creative options like stuffed pitas or wraps. The total savings for the typical family of four can add up to almost 30 dollars per week if lunch costs only two dollars a day.

Making a few small changes to normal habits can result in major savings by the end of the year. The changes do not need to take drastic measures. Instead, it just requires taking a few steps to cut back on spending.

It seems that there is never a good time to start saving as each month seems to throw up one unexpected bill or another. But, if you are in a position to start saving then it is better to start sooner rather than later to get the best return on your savings and investments. So follow these five simple steps for successful saving and investing.

1. Work out and pay off your debts

If you have a large amount of debt then there is no point trying to save money as the interest rate you’ll be paying on your debts will far outweigh any return you will see on any savings. So the first thing you need to do is work out how much money you owe out in loans and credit cards (do not factor in mortgage payments) and then calculate when you can feasibly repay these debts.

Once you have repaid these debts then you are ready to start saving as even just putting to one side the money you have been paying in interest is a good start to building up a substantial savings account.

2. What are you saving for?

When you start saving it is important to have a savings goal in mind as this gives you a focus to continue saving. This is important because without a goal in mind it is easy to for go putting money into your savings account and spend it on an impulse purchase.

So you first must determine whether your goal is short term, for example, saving up to buy a new games console, medium term, a deposit for a house, or long term, a retirement fund. And once this has been determined then you can begin to structure your savings strategy and work out how long it will take to achieve your savings goal. And it is important at this point to come up with an important time frame in which to meet your savings goal as if this is unrealistic then you may become disillusioned and give up on saving altogether.

3. Create a budget

Once you have worked out how much you need to save and over what period of time you now need to make a complete list of you income and expenditure and work out a proper budget, that is one that you can stick to, for the month ahead. When creating a budget be sure to break down and factor in those annual outgoings such as car or home insurance as these are large expenses that can be easily overlooked if they are only paid once a year.

To make a successful budget you need to make a note of how much money you bring in each month and then subtract each of your outgoings, no matter how small or large. The best way to do this is to keep a record of everything you spend over the course of a month and then calculate you total outgoings and subtract this from your income. The figure you are then left with should equate to the amount that you can then put away as monthly savings.

4. Cut your expenses

Once you have created a budget and you can see exactly where your money is going each month then it is a good idea to try and cut down your monthly expenditure. If you can trim your monthly outgoings, even by just a small amount, then this can soon add up and may help you to reach your savings goal that little bit faster. For example, if you are paying £2.00 for a coffee on your way to work each morning then this will add up to between £40 and £50 per month and up to £600 over the course of a year!

5. Choose the right savings account

Once you have worked out how much money you have to put to one side each month then it is important to work out which type of savings account is right for you and financial comparison sites such as Moneysupermarket can help you decide which is the best type of account for your circumstances. However, if you are planning for a long term savings goal such as retirement then you may want or you may want to seek professional financial advice.

Article written by Les Roberts, savings journalist at Moneysupermarket.com.