The Best Ways to Save Money in 2025

Having trouble saving money? You are not alone. 1 in 3 Americans have more credit card debt than savings (Link). Why is that? How come so many people struggle to put money aside?

There has been a good reason in recent years: Inflation. While this is a solid argument, savings haven't been high before inflation. Now we can point somewhere and tell ourselves: I can't save! It's the inflation!

Saving money is one of the most essential skills. It comes with several advantages. It often means giving up smoking, alcohol, sweets, or that treat you "deserve."

What remains unseen is that saving money is an investment in a better life.

Why should you start saving money in 2025?

Let's start with a story from my own life—a time when I learned the hard way why saving is crucial.

In 2016, I was broke. After quitting my job in 2015, I started a company with a friend. A few bad decisions and bad luck led to a complete disaster.

At some point, I didn't know how to pay the rent for my apartment.

A friend asked how to promote his personal training business. I shared my knowledge of homepages, landing pages, email marketing, and Facebook Ads. After our three-hour dinner, my friend said one simple sentence that changed my life:

"This is amazing. Why again aren't you taking money for this?".

That was when I realized I had a valuable skill. So, I decided to become a self-employed digital marketing advisor. After my first project, I vowed never to experience that again, so I pledged to save money.

My goal: live a year without new customers. I achieved this in 6 months, changing everything.

That experience taught me that saving money isn't just about having more—it's about gaining freedom and peace of mind. The true path to financial freedom.

Saving money brings freedom of choice.

Working self-employed isn't always sunshine. Some customers are horrible and the type of people I don't want to spend time with. My savings allowed me to be picky, but being picky is more difficult when you need the money. That's why people work in jobs they hate and endure bosses they can't stand.

By creating a financial buffer, you are gaining freedom. When you have enough money saved, you can tell your supervisor to treat you nicely or leave the scene.

While financial freedom today is vital, planning for the future is just as important.

It's nicer to be old with money

I am from Germany, and we have a good social security net, but I don't trust it. This system was created when few lived past 70.

People usually received 3-5 years of retirement payments, maybe 10 if lucky. Today we discuss if retirement at 64 is reasonable given a life expectancy of 87.

And that, while the number of payers (workforce) declines rapidly. You don't need to be a magician to know that two things will happen (or both):

• We have to pay more for retirement.
• You will receive less for your retirement.

Prepare smartly for yourself; your dignity depends on planning.

Saving money makes dreams come true

Are you familiar with the marshmallow experiment? Five-year-olds were asked to resist a marshmallow. If successful, they would get a second one.

tThe same is true for saving money: That's your marshmallow today. Spending money on those fancy gadgets? Getting drunk with friends? Spending money on that thing you "deserve"?

Instant gratification, like "Amazon same-day delivery," exemplifies poor money management. Learn to delay it to surpass your peers.

This is beneficial not just for you, but also for your loved ones. You can be the friend, parent, or spouse who provides and takes responsibility. Nothing feels worse than a parent who can't ensure a good life for their loved ones.

Saving money prepares for negative events

Nobody knows what's going to happen next. Are we on the brink of a new Covid-19? Will there be another economic downturn? Will you get sick? Burnout?

We don't know. That's why saving money is equal to a piece of mind. That's where it all boils down. Money is a resource; the better you can manage it, the better your life will be.

Saving money isn't just about numbers—it's also about mindset.

What do you think about money - Your Money Mindset

Money is delicate: Without it, we may feel like failures. With it, we might feel guilty. Money amplifies our existing beliefs, for better or worse. Thus, it's essential to examine our beliefs.

We must examine our relationship with money and our desires. Neglecting its power while focusing solely on it is unwise. Both mindsets have unique shortcomings. Money's emotional power links directly to our ingrained self-perceptions.

• Do I feel like a valuable human?
• What do you think you deserve?
• What is my time worth?

Money’s role in our lives is significant, as we live in a capitalist system where we trade value—time, resources, knowledge—for money. If money equals value, it’s understandable we tie our worth to it.

Before losing myself over money—worth an article on its own—let's focus on you. I have a little exercise for you. Find more about the money mindset here.

Your Money Thoughts

1. Take a pen and paper or use an online text editor.
2. Write down what you think about for 5-10 minutes. What do you think of people who have a lot? What do you think of people who don't have it? Do you deserve to have money?
3. Now it's time to rethink: Take 5-10 minutes and write down what you WANT to think about money. How do you want to think about it right now? Ensure you write down at one point: "I deserve to have money."

 

This won’t immediately change your view of money, but this exercise is powerful. If you think money is bad, why would it come to you? Believing money is bad causes avoidance, leading to unhappiness and poverty — a state I’d prefer to avoid.

"I'd rather be rich and miserable than poor and miserable" - Unknown

When should I consider saving money?

In short? Immediately. Don't waste time until the next month. Don't wait until you get the next raise. Otherwise, it's like a New Year resolution, and we all know too well how that ends.

The following steps help you to decide where you are and what you should do next:

Get Your Life in Order

Take control of your finances today:

• Track Income and Expenses: Know where your money is going.
• Pay for Necessities: Focus on rent/mortgage, food, utilities, transportation, and healthcare.
• Do It Online: Visit canvas.dennistroeger.com to manage your budget—it takes 15 minutes! 

Build an Emergency Fund

Be prepared for unexpected expenses:

• Quick Access: Ensure it's money you can access within 48 hours, with minimal risk.
• Starter Goal: Save $1,000 or one month's expenses.
• Long-Term Goal: Grow it to cover 3-6 months of living costs.

Maximize Employer Benefits

• 401(k) Contributions: Contribute enough to get the full employer match—it’s free money!

Pay Off Debt

• Tackle high-interest debt using the Avalanche (highest first) or Snowball (smallest first) method, focusing on debts above 5%, especially over 10%.

Increase Retirement Savings

• Aim for 15%: Save at least 15% of your pre-tax income in retirement accounts like 401(k)s and IRAs. 

Plan for Future Goals

• Big Expenses: Start funding future needs like education, a new car, or a home.
• Health Savings Account (HSA): Max out if eligible.
• College Savings: Contribute to your kids’ education if desired. 

Invest and Plan for the Future

• Beyond Retirement: Use taxable investment accounts for long-term goals.
• Personal Priorities: Balance savings based on your values. 

Once you've laid the groundwork, it's time to explore techniques that make saving simpler.

3 Ways to Save More Money

#1 Save at the beginning of the month

Saving money is difficult. Our brains struggle against cheap dopamine or instant gratification. Survival instincts don't plan for retirement. Planning was irrelevant in the Stone Age.

To simplify, set up monthly payments to your savings account right after receiving your paycheck. Discuss options with your employer. A 401k could also be beneficial.

#2 Earn more

"How can I earn more?" I understand; you’ve likely pondered this. Yet, this question is flawed as it centers solely on you. It neglects the role of others. Concepts like IKIGAI (https://en.wikipedia.org/wiki/Ikigai) can shift your focus outward.

Before diving into complex models, ask: What can I offer? If you feel stuck, consult a friend, spouse, or co-worker about your strengths.

I write because a friend said, "Nobody helped me with personal finance as you do. You should help others, too!". The question "How can I earn more money?" never leads to an answer.

#3 Best budgeting apps for beginners to save money

We all have unnecessary expenses. I could save $500 a month if I stopped buying books I don't read! While I don't want to call books "unnecessary," it's an area where I could be more mindful.

Additionally, I'm sure some expenses can be reduced or eliminated. "But, Dennis, I already spend only what I need." Perhaps, but I can't judge your situation. If that's true, refer to #2 and consider earning more money.

What benefited me was utilizing "Finanzguru" (Finance Guru), a German budgeting app.

"But I don't want to track all my expenses. That's exhausting!"

Start by tracking one day, then a week, and maybe a month. This will show where your money goes in a typical month. We can only change what we can measure—this applies to everyone, not just managers.

List of apps you can use: 

Rocket Money

Rocket Money, formerly Truebill, excels in personal finance management. Key features include:

- Subscription management and bill negotiation services

- Budgeting and net worth tracking

- Automated savings features

- Credit score monitoring

The app offers premium services on a pay-what-you-want basis, from $4 to $12 monthly.

You Need a Budget (YNAB) 

YNAB is ideal for those who prefer a hands-on approach to budgeting. It offers:

- Zero-based budgeting method

- Flexible, in-depth transaction tracking

- Educational content on personal finance

- 34-day free trial

YNAB is priced at $14.99 per month or $99 annually.

Simplifi by Quicken

Simplifi is designed for users seeking a straightforward yet effective budgeting tool. It provides:

- Intuitive dashboard for financial overview

- Flexible budgeting tools

- Excellent transaction management

- Savings goal tracking

Simplifi is available for $5.99 per month or $71.88 when billed annually.

PocketGuard

PocketGuard is ideal for newcomers to personal finance apps or those overwhelmed by complex features. It offers: 

- User-friendly interface

- Creative design for easy navigation

- Comprehensive budgeting tools

- Great support resources

The app offers a free version and a premium subscription for extra features. 

Monarch Money

Monarch Money suits detail-oriented users who are managing many family finances. Features include:

- Visually appealing and customizable interface

- Comprehensive account linking (bank, investment, property)

- Net worth tracking over time

- Collaborative features for family finance management 

Monarch charges $14.99 per month or $99.99 annually, with a one-week free trial.

Where should you save your money?

Your current stage matters. If savings are under $1,000, keep it in cash in a savings account, ideally for amounts up to $10,000 or six months' expenses. This offers flexibility for life's challenges.

As a U.S. resident, consider a Roth IRA or 401k beneficial. Since these subjects deserve more attention, I'll keep it brief for now. A Roth IRA allows tax-free withdrawals, providing financial security for the future regulations.

ETF - Exchange Traded Funds

These are like fruit baskets of stocks. By now, you’ve likely heard of ETFs. If not, check out great articles and videos (start here).

It's crucial to select an ETF that is affordable. Here, affordable refers to a TER of less than 0.50%, which indicates the annual fees you pay for holding the ETF. This is how the ETF generates revenue. Aim for a TER below 0.30%, though this may vary investment.

"0,2% is a lot!" - Yes, and no. This roughly equals $200 on $100,000 savings a year. When you reach these numbers, $200 is part of the normal fluctuation. I see it differently, but I like my life easy and don't want to count every penny. More about finding the right ETF you can find here.

Stocks

Ah, indeed... stocks. Why not bypass the middlemen and invest directly in stocks? The prospect of becoming a self-made millionaire is appealing. Even with a 60-hour work week, 96% of professional fund managers do not surpass ETF performance.

Do you think you can do better? I encourage you to check my Wealth TriangleWhen, which shows how much to invest based on your risk profile.

By now, you've seen the impact that mindful saving can have.

Saving Money - A summary

Saving money is vital for control and autonomy in life. It's a crucial skill that helps you be a happy human being. The number of people who live from paycheck to paycheck is staggering.

And the worst part? It has nothing to do with how much you earn:

• About 35% of households earning under $50,000 live paycheck to paycheck, up from 32% in 2019310.
• Even higher-income brackets are affected: 20% of households earning over $150,000 a year live paycheck to paycheck.
• 33% of workers earning between $50,000 and $79,999 annually say they're in this situation.
• 36% of workers earning between $80,000 and $99,999 report living paycheck to paycheck.

(Sources)

Learning to manage money should start early. Happiness follows a rule: if you need money to be happy, it won't change.

Start saving today. Don't wait. Future-You deserve it.

Disclaimer: This article is based on personal experience and should not be considered financial advice. Always consult with a qualified financial advisor before making investment decisions.