How can I get on track to start a savings plan?


Q. What’s the easiest way to save money? I’m out of work but getting more from unemployment, at least until July, than I did from my job. I want to start a nest egg.
— Right foot forward

A. We’re sorry to hear that you are unemployed, but it’s great that you’re thinking about saving money at this point.

Without knowing anything else about you or your financial situation, we can offer only general suggestions for starting a nest egg. Nevertheless, these tips are helpful for anyone.

The easiest way to start saving money is to heed the time-honored adage to live below your means, said Gene McGovern, a certified financial planner with McGovern Financial Advisors in Westfield.

In other words, he said, find ways to keep your living expenses less than your after-tax income, and then save or invest the difference.

“Start by setting a concrete, measurable goal that answers the questions, what and by when?” he said. “An example might be saving $1,200 in one year, or whatever amount is appropriate for your circumstances.”

To begin achieving that goal, you can either increase your income or reduce your expenses, or do a combination of both, McGovern said.

On the income side, that might mean changing jobs for higher pay, taking a second, part-time job, or turning a hobby into a small side business, he said.

“On the expense side, it’s important to track where your money goes by keeping a detailed daily record for 30 days. Write down every expense, no matter how small,” he said. “At the end of the 30 days, make a list of all your expenses, and divide them into two categories: mandatory and discretionary.”

Mandatory expenses include costs like taxes, rent or mortgage payments, groceries, utilities, debt payments and car insurance premiums. These must be paid.

McGovern said you should note that even mandatory expenses can be reduced, such as by downsizing your home or apartment, refinancing debt and shopping for car insurance.

Discretionary expenses are those whose amounts you can control, such as entertainment, eating out, vacations, nonessential clothes, and other nice-to-have but not essential things, he said.

To reduce your expenses below your income, prioritize the discretionary expenses and reduce or eliminate the ones least important to you.

Once your expenses are below your income, you can begin to build a nest egg.

“First and foremost, treat saving money toward your goal as a mandatory expense and pay yourself first,” McGovern said. “No matter how small the amount, whether $5 or $50 a week, set that money aside into a dedicated savings account before paying any other bills or expenses.”

Good candidates for a dedicated savings account are an online bank savings account or a money market mutual fund, he said.

He suggests you try to make your savings automatic, such as with payroll deductions from your employer into a 401(k) or other retirement plan. Once automatic deductions have been set up, you’re far more likely to continue making regular contributions to build your nest egg, he said.

“Another way to build savings automatically that doesn’t depend on your employer is with bank programs that round up all debit card purchases to the nearest dollar and move the difference from your checking account into a savings account,” he said.

For example, if you spend $5.65 for breakfast at a restaurant, the program would round the purchase to $6.00 and automatically transfer 35 cents from your checking account into your savings account. Setting up automatic payments of regular monthly bills on such a card greatly increases the amount you can save, McGovern said.

Also, there are apps available for smartphones that do the same thing. The apps link to your checking account and make automatic deposits to a savings account that you’ve set up, he said.

Finally, reward yourself for achieving milestones toward your goal.

“For example, if you’ve stayed on track with your goal and saved $400 after three months, treat yourself to a small reward of your choosing,” McGovern said. “Frequent small rewards are another powerful way to reinforce your saving behavior and ensure progress toward building your nest egg.”

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This story was originally published on June 24, 2025. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.