5 Smart Money Saving Tips for Young Female Savers

We've all chuckled at those memes about "girl math" and the stories we tell ourselves to justify questionable spending.¹ Of course, they're only funny because the reality can be a bit ridiculous. We know we should have a better system for making financial decisions, but don't always know how to make it happen. That's where financial literacy comes in.

It's not just about numbers, though. For women, it's about taking control and empowering ourselves to achieve our goals. By learning smart money moves—including how to budget, boost savings, maximize earnings, invest strategically and protect your finances—you can pave the way to a future you design.

1. Build a Budget

Trying to save money without a budget is like flying blind. You might pull it off if you're lucky, but it's so much easier (and less scary!) if you can see what you're dealing with and where you're going. Here's how to get started on a budget.

Track income and spending

Information is power. Write down (or log in a budgeting app or spreadsheet) every dollar you have coming in and going out.

Sort into categories

Put "like with like" so you end up with total dollar amounts for each of your essential costs (e.g., rent, utilities, transportation, groceries, debt payments) and optional spending (e.g., entertainment, restaurants, takeout).

Look for spending cuts

The goal is to reduce spending enough to free up a portion of your monthly income for savings. These are some cost-cutting strategies you can try:

• Review subscriptions/services. If you're paying for something on a monthly basis and not using it regularly—like a gym membership or streaming service—cancel it. Otherwise, that's just money down the drain.
• Negotiate better deals. Ask for a discount on your internet or phone plan, or shop around for a better offer.
• Be smart about groceries. Check flyers for sales, plan the week's meals accordingly, make a list and stick to it. You'll save three ways: cheaper items, less food waste and no impulse buys.
• Watch your energy use. Consider these ways to lower your electricity bill and save on gas.

Make savings a category

Create a line item in your budget for these monthly savings, and be sure to transfer the amounts to a separate interest-bearing account so you won't accidentally spend the money on something else. You can even set up an automatic savings plan to make it easy—just set it and forget it.

2. Save Early and Often

Creating a habit of monthly savings when you're young will not only give you a jump start on building a financial nest egg, it will also help your money grow faster thanks to the power of compound interest. Here are a few other ways to maximize your savings:

• Choose the right savings account. You want your savings to earn as much interest as possible, while still being accessible when you need it. A high yield savings account is a good option, as it generally pays a much higher interest rate than a standard savings account, and you can make withdrawals without penalty. Other possibilities include money market accounts, certificates of deposit and tax-advantaged accounts such as IRAs and 401(k)s.
• Set financial goals. It's much easier to find the motivation to save when you know what you're saving for. In fact, you can (and should!) have multiple savings goals. These include long-term goals like saving for retirement, medium-term goals such as saving for a down payment on a home, and short-term goals like saving for a dream vacation or building an emergency fund.
• Automate your savings. Put your savings on autopilot by setting up pre-authorized transfers from your checking account to your savings account(s).
• Look for other opportunities to save. In addition to your budgeted monthly savings, there may be times when you have a little extra cash to save—for example, a work bonus, overtime pay or a tax refund. These one-time savings can help you reach your goals faster.

Want to challenge yourself to save even more? Try these four easy ways to save $1,000 in 30 days.

3. Protect Your Finances

An accident, illness, job loss or other emergency can upend your finances if you don't plan ahead. Use the following strategies to prevent that from happening:

• Build an emergency fund. It's important to have a cushion of cash to draw from when unplanned expenses come up. This can help you stay on track with your other savings goals without needing to take on debt. Experts suggest working toward saving about six months of living expenses in an emergency fund so you'll have sufficient time to find a new job if you're suddenly laid off.
• Get insured. Insurance is designed to help you pay for the unexpected—whether it be a car repair from an accident, loss of property from a home theft or fire, medical care to treat an illness or living expenses if you become disabled. Consider these five types of insurance to help protect your wealth.
• Beware of financial scams. Protect yourself and your money from fraudsters by being proactive about security when shopping or banking online, and familiarizing yourself with the latest scams used by cybercriminals.

4. Maximize Your Earnings

While it's true that a penny saved is a penny earned, it can work the other way around, too. If you can increase your income without adjusting your spending, you'll have more money available to save. Try these tips to boost your earnings:

• Ask for a raise. When the economy is strong and businesses are trying to hold on to workers, it can be a good time to negotiate a pay increase. This is especially important for women, who are already at a disadvantage from the gender wage gap.
• Look for a better job. If a raise is a no-go, it may be time to see what else is out there. Consider upgrading your education and skills to improve your career path.
• Start a side hustle. Adding extra sources of income to your day job can be a great way to earn more money, even if it's only on an occasional basis.
• Don't leave money on the table. There aren't many ways to get free money, but when the opportunity presents itself, take it. For example, if your employer has a 401(k) matching program, try to contribute at least enough to the retirement plan to get the match. Similarly, be sure to file your annual income taxes and claim all the tax deductions and tax credits you're entitled to. And a cash back credit card can be a no-brainer for getting free money.

5. Invest in Your Future

While interest income can really boost your savings when interest rates are high, a well-rounded financial plan includes investments that allow your money to grow regardless of interest rates. Here are a few tips for smart investing:

• Assess your comfort with risk. Some types of equity investments, such as stocks, mutual funds or ETFs, can earn higher returns over the long term—but only if you're prepared to stay invested through good times and bad.
• Go for a balanced portfolio. Rather than limit yourself to high-risk investments, choose an asset allocation that includes a balance of equities and more conservative investment options such as bonds, as well as low- or no-risk FDIC-insured products like CDs or high yield savings accounts.
• Be sure to diversify. You can moderate risk by spreading your investment dollars across many different industries (e.g., technology, manufacturing, healthcare, finance), regions (U.S., international, emerging markets) and types (blue chips, start-ups, etc.). The idea is if one market isn't doing well, others will hopefully be booming.
• Find an advisor you trust. Whether you go for a robo advisor or financial pro, make sure you understand the fee structure and how your needs will be met.

Find Your Freedom

Financial literacy serves as a tool for independence, allowing you to make informed decisions about your money, career and life goals. It empowers you with the knowledge and skills needed to take control of your financial destiny. So, get started on the smart money moves explained above, and begin your journey to financial freedom.

LEARN MORE: 6 Financial Tips for Gen Zers and Millennials to Save More Money