What Steps Can the Average Person Take to Save Money? It's not impossible for the average person to save money if they take the following steps.

Historically, Americans have been terrible at saving money, but oddly enough, the pandemic might have changed that: Data shows that Americans are saving a greater percentage of their money than ever before.

There is, of course, a catch.

High-income Americans are the ones stashing money and reducing consumer spending. On the other end of the spectrum, those with lower incomes have really been hit hard by the COVID.

"The problem in America, in particular, is that there's a very large portion of the population that was living paycheck to paycheck. They couldn't save enough to miss one payment or put $400 aside for an emergency," Sarah Nadav, a behavioral economist in the World Economic Forum's expert network, told Time. "So, if they were barely able to pay their bills before then they don't have very much room to cut down and save now."

But, what about the average person? Well, they've also been negatively impacted by the pandemic -- just not as much as low-income individuals. And, they're also dealing with the fact that the U.S. is 30% more expensive than it was 20 years ago. As such, saving money can be tricky. But, it's not impossible if you take the following steps.

Record your expenses

When it comes to saving, the absolute first step you must take is figuring out how much you spend. And, that means keep tracking all of your expenses. I'm talking about everything from your morning cup of coffee to your mortgage.

Of course, this can be overwhelming. Personally, just looking at numbers gives me anxiety. However, you need to know where your money is going so you can redirect it to where you want it to go. For example, you might see that you're spending over $200 going out to dinner, and cutting that in half means you could be putting $100 a month in your savings.

Thankfully, getting started doesn't have to be daunting if you do the following;

• Check your bank and credit card statements to see what's coming in, as well as what's going out.
• Next, categorize your expenses. Most online statements, particularly credit card statements, will automatically do this for you. But, if you do this manually, you want to pay attention to necessary purchases or fixed expenses like housing, utilities, transportation and groceries. Also, take into account non-essential expenses or discretionary spending such as dining out, TV, memberships/subscriptions, and clothing.
• Use a budgeting or expense tracking app. There are actually several free options, like Mint, Personal Captial, Unsplurge that track your spending and help achieve budgeting goals.
• Explore other expense trackers, such as budget templates and worksheets.

Now that you have this information on hand, you can make a plan for spending and saving. And, most importantly, avoid overspending. Create and stick to a budget.

Don't use the "B" word

While budgeting is without question essential, we can't stand the word itself. In fact, we straight-up hate the filthy "b" word.

"I think the entire concept of budgeting is flawed," Brad Klontz, a psychologist and certified financial planner, told Science of Us. "Your emotional brain responds to the word budget the same way it responds to the word diet. The connotation is deprivation, suffering, agony, depression."

I think comparing a budget to a diet is a fair comparison. We associate a diet with sacrifice. For example, giving up a delicious milkshake in order to lose weight for the summer. That might work in the short term, but many of us don't want to give up milkshakes forever.

Instead, Klontz recommends creating a spending plan that's focused on your goals. It's an effective way to reframe the idea of a budget. It may even get you excited about it.

"You get really excited about things you want to spend money on. And then you want to cut back on the things that don't matter," said Klontz.

Another suggestion is to visualize your future self. According to a New York University study, those who did this were ready for retirement by saving more.

Set specific financial goals in your target areas

In my opinion, you've already done the hard parts. Now it's time to set manageable goals that will guarantee that you'll succeed at saving.

Ideally, you want to limit yourself to only two or three goals so that you don't burn yourself out. They also need to be specific.

"When you are setting goals, the more specific you are, the better," writes Alicia Dion in a Due article. "Get clear down to the exact dollar! Also, get specific on the time frame of your goal. Is the deadline on December 31st? Or is it something you want to achieve sooner? Will you set a goal for each quarter?"

"Sometimes some more number crunching is necessary to get your goal clearer!" adds Dion. "Don't be afraid to go back to your financial reflections for" the previous year "if it helps make your goals more specific."

And once you establish your goals, write them down. Goals that live in your head are just dreams.

Pay yourself first

"Many personal finance professionals and retirement planners tout the "pay yourself first' plan as a very effective way to ensure you continue making your chosen savings contributions month after month," explains Julia Kagan for Investopedia.

"This suggestion hinges on the fact that It removes the temptation to skip a contribution and spend the funds on expenses other than savings," adds Kagan. "Regular savings contributions can go a long way toward building a long-term nest egg, and some financial professionals even go so far as to call "pay yourself first' the golden rule of personal finance."

One of the most common examples of the "pay yourself first" method is having your savings contributions automatically routed from each paycheck to your savings or investment account. It's often advised that 20 percent of your should go towards savings and retirement.

Of course, 20 percent may be too much for some of us. If so, pick a percentage that works for your budget: Even if it's 5 to 10 percent, it's still better than nothing.

Additionally, you can also automate your savings by using a cash-back credit card. Also, I'm a fan of rounding up purchases to the nearest dollar and putting the spare change towards savings. You can do this through Bank of America's Keep Change program or apps like Acorns.

Gamify your finances

"Gamification is a way of adding game-like elements (scoring, winning, competing with others) to some sort of non-game product or process," Amanda Dixon explains for Bankrate. "Businesses often use gamification in their marketing strategies and loyalty programs, and dozens of mobile apps have emerged to support these efforts. A number of banks and credit unions have tried using games to increase engagement or educate consumers about personal finance, too."

But, when it comes to saving, is gamification effective?

Well, it does make saving more fun and engaging. It's also an easy way to track your progress. And, studies have found that those who used gamification saved, on average, 25 percent more frequently.

Dixon suggests opening a prize-linked savings account or share certificate, where you can earn interest on deposits of as little as $25 and, potentially, win cash prizes by saving enough to enter a drawing. Apps like Mint or SaveUp can also reward a user for saving money or eliminating debt.

Here is a fancy annuity calculator to help you realize when you save money how fast it grows. It's realistic on how fast it adds up, which isn't very fast but little by little it'll add up to something big.

Pay down debt using the snowball method

Let's be real. It's almost impossible to save when you're buried under debt. Hopefully, having a budget frees-up some extra money that you could throw towards your debt. But, to succeed at this, you need to take the right approach.

"Mathematically, the most effective way to eliminate debt is to follow the avalanche method, in which you list your debts from highest to lowest by interest rate," writes Emmie Martin for CNBC. "Pay the minimum balance on each, then dedicate as much extra as you can each month to the one with the highest interest rate."

Studies, however, have found that this is ineffective as it leads to balance-matching. A better approach is the "snowball method," where you tackle your smallest debt first regardless of the interest rate. Researchers for the Harvard Business Review verified this as the best strategy to pay off credit card debt.

"Focusing on paying down the account with the smallest balance tends to have the most powerful effect on people's sense of progress — and therefore their motivation to continue paying down their debts," Remi Trudel, one of the researchers, writes for HBR.

Save money on necessary expenses

Remember your necessary expenses? While essential, no one really wants to dish out their hard-earned cash to necessities like rent, insurance, etc. If you're like me and were born in the '80s, you might live by the mantra, "I don't wanna grow up, I'm a Toys 'R Us kid."

Thankfully, there are simple, and even fun, ways to cut back on your monthly expenses. For example, I used to help my grandma go to the grocery store. Since she grew up during the Great Depression, she was thrifty when it came to grocery shopping.

From her, I kind of learned how to rig the system. Recently, I stocked up on coffee. This is an essential purchase since I'm a pot-a-day person. Anyway, my preferred brand was already on sale, but I also had a digital coupon. I ended up saving $6 on my coffee, so I doubled up.

Other people, like my sister, enjoy winning arguments. As such, she's known for negotiating better rates on everything from her cellphone to cable to credit card bills.

One of my best friends is all about the latest tech. Over the years, he's invested in products like the Google Nest Thermostat. Because it adjusts to his specific home's needs, it's greatly reduced his energy bill. On average, Nest reports users have saved 10% to 12% on heating and 15% on cooling.

Find ways to spend less

In addition to reducing necessary expenses, consider ways to spend less money in general. Sometimes this involves being frugal. You might try generic products, buying used instead of new and utilizing your local library. Other suggestions would be packing your lunch or inviting friends over to your house instead of going out.

Personally, I follow the sharing is caring philosophy. One example is a book exchange. It's kind of like a library between you and your inner circle. Other examples would be clothes swaps or baby hand-me-downs. You could also share subscription logins.

I know that companies like Netflix might frown upon this, but until it's not permitted, I say go for it. I have Hulu, it actually comes with my Spotify subscription, and I shared my credentials with a friend who gave me their Netflix info.

Create extra income

Thanks to the gig economy, this has never been easier. At the same time, not everyone has the availability or desire to side hustle. If you're a parent who is working full-time, when exactly are you going to be able to drive for Uber or Lyft?

However, there are other ways to earn extra income, which can then be put into your savings account. You could sell old clothing on Poshmark or collectibles on eBay. If you have a spare room, consider listing it on Airbnb. Don't rule out trading gigs with friends, family or neighbors: For example, whenever my friend goes out of town, I watch his dog. Because he's an electrician, he pays me back in electrical work when I need it.

Here are a few ways I put together to make money online. Enjoy, it took me a while to put together.

Schedule monthly "money dates"

Even if you've done all of the above, you still need to frequently check in on your finances. Why? Because you need to make sure that you're still on track to secure your financial future. This allows you to identify any problems before they get any worse.

Make a night of it by scheduling a monthly "money date." If you're in a relationship, you could do this on a Friday night and make it special. You could cook a nice dinner, look over your finances, and then reward yourself by playing a game or watching a movie.