Think you can’t build your savings if you struggle financially and are living paycheck to paycheck? You aren’t alone. You can do it. You just need to learn how.
I remember the days when I struggled to make ends meet. Payday was not really a happy day for me as 90% of my paycheck was always gone the minute I had my check. I had little left to live off of every two weeks. It felt as if I were continually robbing Peter to pay Paul.
I remained in this same cycle for years. And sure, I wanted to be able to save money, but I could not see how that was possible. How in the world can someone expect me to save even a penny when I am struggling to make ends meet? If only I knew then what I know now.
Saving money is possible, no matter your income. You have to learn how to do it – and you have to want to do it.
WAYS TO SAVE $1,000 WHEN YOU ARE BROKE
How much do you need to save?
Your savings account should cover at least 3 – 6 months worth of expenses if you are single and up to 9 months if you have a family.
When you are starting out, that number may seem entirely out of reach. That is why it is good to set your first goal to save $1,000 – $1,500.
By having at least $1,000 saved, you have a resource to cover unexpected expenses, such as car repairs. Your savings prevents you from having to rack up more debt and can help you more quickly reach your financial goals.
The easy trick to build your savings
The way to quickly increase your savings account is to automate it. This is simple enough for anyone to do. Just create an automatic transfer from your bank to your savings account on each payday. The amount can be as small as even $5 to get you started.
When your check hits your account, that money is deducted from one account and moved into another. You never even really see it. That gives you less in your account, and you just make that work with your budget. By moving money into a savings account automatically, you never touch it.
The bonus of automating it is that you will not be tempted not to save. You would have to go through steps to get that money back into your checking account. Most won’t do that.
Another option is to change the bank you use. Chime rounds up every transaction to the nearest dollar and automatically moves it to your savings account. Those small amounts can add up very quickly, helping you reach your savings goals. And, they are giving Penny Pinchin’ Mom readers a FREE $5 bonus when they sign up and make their first deposit!!
When you don’t see it, you won’t miss it.
Find money in your budget
As much as you’d love to find buried treasure in your backyard, we know it is not going to happen. You need to analyze your budget and find the line items or categories where you can scale back. When you free up money in your budget, you’ll be able to reach your savings goal more quickly.
Utilities. Look around the house for ways you are wasting money. Consider adjusting the thermostat to save on heating or cooling costs. A simple way to find ways to lower your utility bills is to reach out to a service, such as BillCutterz, who will negotiate your rates on your behalf.
Credit Cards. It seems that each time you make a payment on your credit cards, the balances don’t drop by much. It can take a long time to pay these debts in full. You might want to consider taking out a home equity or personal loan to pay them off. It may cost you less per month by consolidating several balances onto one new card, also at a lower rate.
Before you apply for a card or reach out to your lending institution, make sure you know how your credit looks. You will need to have a decent score to qualify for a new loan. Take a minute and check out your credit score for free.
Dining Out. If you are eating your meals away from home several times a week, you can cut back and find easy money. Just cutting out one meal a week can save you $100 or more every single month!
Use your coupons. While they may not be as popular as before, coupons are still the easiest way to save money. This does not just mean grocery coupons. Find coupons to save on your meals or even clothes. The less you spend on the things you need, the more money you have to add to your savings account.
Bring in more money
Once you have set up your plan to automate your savings, the key is to see if you can find other ways to save more money. Some things to consider:
Sell items. Look around your house to find things you no longer need or use. Sell them by hosting a garage sale or post them on a local sales page (such as Craigslist).
Increase your income. Asking for (or getting) a raise at work may not be an option. Instead, find other ways to add to your household income. You might turn your hobby into a business or even take on a second job. This list of more than 75 ideas to make money from home might hold the key for you.
You can get reach your savings goals, no matter how much money you make. You just need the tools to make it happen.