How to Save Money When You Live Paycheck to Paycheck

Put your spare change in a money jar to boost your savings.
Put your spare change in a money jar to boost your savings. (Image: Thinkstock/Comstock/Getty Images)

Putting money aside is a challenge if you are just getting by. If you are out of funds by the time the payday arrives, the last thing on your mind is putting money away for the future. But no matter how tight your budget or how little you bring home, you have opportunities to save money and start investing. The great thing about saving and investing is that you can start as small as you want and build on that smart start.

Things You'll Need

  • Bank statements
  • Monthly bills

Sign up for your company 401(k) or 403(b) plan if your company has these options. Direct 1 percent of your salary to the investment. Because the money you put in lowers your taxable income and your withholding, the difference in your net pay should be negligible. As you get comfortable with saving and better at budgeting money, you can raise your contribution percentage.

Split your direct deposit paycheck between your normal checking account and a savings account with no minimum balance requirement. Start by sending $5 or $10 from each paycheck to the savings account, and force yourself to live on the money coming in to your checking account. Chances are you can make up for that missing $5 or $10, no matter how tight your budget.

Review your bank statements carefully and look for money wasters such as ATM fees. Adjust your schedule so you can use the ATM at your own bank, or think about switching to a bank with a wider network of fee-free ATMs.

Carry a small notepad with you and record every penny you spend, from your morning cup of coffee to lunch with the co-workers. Do this for at least a week, then look at your spending and think about ways to cut back. Something as simple as making coffee at home, or brown bagging your lunch, could help you save hundreds, or even thousands, of dollars a year.

Review the monthly bills for the non-essentials: items like cable or satellite service and cellphone bills. Even if you need these items, you may be able to lower the cost substantially by dropping premium services and switching to a basic package.

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