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How to Save Money Each Month: 3 Methods Explained

Updated: May 12, 2022

Have you ever looked for methods, techniques, and tricks on saving money? If you were to gather them all, you’d see there are hundreds – if not thousands – to choose from. Do we really need that many? Isn’t one that actually works enough? Unfortunately, what works for one, is not an option for another. You can’t use the same approach for people with vastly different personality traits, incomes, needs, and saving goals.

When looking at how to save money each month, many people are driven towards creative methods. The Dave Ramsey envelope system, the 52-week money challenge, and the $5 method are often mentioned as the most popular ones – but are they really as good as some online reviewers swear? Let’s dive deep, evaluate their pros and cons, and see whether any of these options are good for you!

The Dave Ramsey envelope system

You might remember Dave Ramsey from our review of the best personal budgeting books. He’s a well-known financial advisor who has been hosting his own radio show for almost three decades now (not to mention numerous books and online courses). The envelope saving system is one of his best-known tips for people around the world looking at how to save money each month and be more mindful about their spending habits.

The envelope system

The idea is pretty simple: you divide your money into physical envelopes. Each envelope represents a spending category, and you can only spend the amount of money you’ve put inside the envelope for each category. You can have as many envelopes as you need and choose the categories according to your own monthly needs – Groceries, Gas, and Entertainment are just a few common examples. Anything that’s left in the envelopes at the end of the month cannot be used for other needs and go straight to savings!


Physically dividing your money into envelopes makes it easier for you to visualize your budget and understand how much you have left at any given point. It’s also impossible to accidentally overspend: you can’t take more from a certain envelope than you put in! Most importantly, it helps you make financial planning your monthly routine and be more conscious about the way you spend your money.


The most notable disadvantage of this method is the fact that it’s got everything to do with cash. Not only has online shopping become a routine for millions of people, but some physical stores don’t accept paper money anymore, too - and don’t even get us started on the risks of storing and carrying significant amounts of cash. It can also get tricky when you buy stuff from multiple categories at the same time – for example, how do you approach getting groceries, cosmetics, and gifts on the same trip to Target?

The 52-week money challenge

Another tip you can often hear when discussing how to save money each month is the 52-week money challenge – a no-fuss way to save ​​$1,378 in a year. In the first week of the year, you put in $1 into your savings. In the second, you put $2, and in the third, $3… See the pattern? A year has 52 weeks, and in the last week, you’ll add the final boost of $52 to your savings. That’s it – no bulky envelopes, complex counting systems, or harsh revisions of your daily habits. The 52-week challenge is simple enough for a kid in primary school to follow… Given they have enough money to put away, that is!

52-week money challenge


The biggest advantage of this saving technique is the simplicity: you don’t need to track your spending or master any complex techniques, as long as you remember to put away a certain amount of money into your savings every week. Starting with small sums makes it easier to form a habit, so you’re more likely to go all the way and finish the challenge on a high note. You also know exactly what kind of sum you’re going to be left with at the end, so you can plan ahead – will it turn into a relaxing holiday or a new fancy laptop?


The issue with this method comes at the end of the year. While you only put away $10 in January and $26 in February, the December amount surpasses $200. This coincides with the holiday season when you already have a ton of extra expenses to take care of – and depending on your location, it might be the indoor heating season that often comes with hefty bills. Come to think of it, you save the least in January, though the holidays are over, the sales start, and you could definitely put more money away… but that’s not how the method works!

The $5 method

Another old favorite idea of how to save money each month is choosing a certain coin or banknote and saving each one you receive. Most people go with $5 – hence the name of the method – but it can be anything from a single cent to $100. The choice depends on your money habits and goals: if you never cash out and carry large sums, going for a very valuable banknote won’t make much sense, as you’ll barely get any. Putting away cents, on the other hand, would be way easier, but you won’t really save much in the end.


The $5 method

First of all, it’s an absolute no-brainer. You get a fiver, you put away the fiver (or any other banknote or coin of your choice). That’s it. No planning, no tracking, and no tools or systems involved make this one of the easiest ways for multiple people to save money together, too. Let’s say a family wants to save up for a new TV – everyone from a child to a granny can use the $5 method without thinking twice! It’s also not affected by emergencies or other unexpected events, as you’re not putting massive sums away at any time.


Just like the Dave Ramsey envelope system, this method is based on using cash – which means it doesn’t really work when you mainly use cards or do a lot of online shopping. If you only handle paper money a few times every month, which would mean entire months might pass till you get a specific note or coin. Another strong disadvantage to consider is the impossibility of predicting your savings: at the end of the year: you might have $1,000… or you can have $10.


Understanding how to save money each month is great – but if you really want to boost your savings, you should also think of ways to make more money. Have you ever considered taking up passive income? It’s a great way to add to your monthly income without sacrificing a lot of your free time or energy – or, in Honeygain’s case, barely doing anything at all!

Using Honeygain on smartphone

Honeygain is a passive income app for desktop and mobile devices that allows you to make free money by sharing your Internet connection with a crowdsourced web intelligence network. Not only do you earn effortlessly, but you also help businesses perform data-based processes all around the world! Intrigued? Click the button below to join now and enjoy a $5 starting gift in no time!

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