Trust us, we know what it is like to live paycheck-to-paycheck. We have all had a situation where our emergency savings was not enough to cover a big expense. Working our way out of debt sounds daunting. It may even sound impossible. The good news though, is that it can be done. It is possible to save up money fast. Our paycheck may only cover our day-to-day expenses, but we can still find extra change here and there to save. You will be surprised to see how much you can save even when living paycheck-to-paycheck. You just need a little self-actualization and self-discipline to get started. Below we have steps to help make an impact on your savings goals.
Save every penny
When you start small, you can watch your savings grow! It does not matter if you are only able to save 10₵ or $10 today. What matters is that you are saving. Even if you could only save a quarter each day, you would be able to save over $90 in just the course of a year. When saving, every dollar counts.
It can be difficult to image giving up any of your income to savings. If this is the case, you can start small. Try saving $5-$10 a month if that is what it takes. Do not save money just to take it out of the account. It can be tempting to put a large chunk of funds into your savings account. It can be equally tempting to withdraw that money from your savings account. The idea is to avoid dipping into your savings account while you are building it.
You will also want to find a bank with a savings account that works for you. Interest rates will help you build up your account. Avoid banks that charge monthly fees. There are a lot of online and national banks that you can use if you want to avoid the traditional institution.
Stick to a budget
It is easy to set a budget. It is not so easy to stick to it. The first step in setting a budget is getting a clear picture of your finances and where you are spending your money. Equally important is figuring out how much money you are bringing in each month. We know that looking over bank statements and looking at our bank account decrease in size each week is not fun. The good news though is you only need to make a budget once a year. The real part of budgeting is sticking to our budget.
Make a budget once a year to have an accurate picture of your current financial habits. A budget can show you where to cut costs and here to save money. If you are new to creating a budget, you can check out helpful tips and tricks at How to Create a Budget and Stick to It.
While evaluating your bank statements to plan your budget, keep an eye on places that you seem to be repeatedly spending. Some of your bills are going to come back around every month because they are part of a subscription or service. However, are there any small monthly fees or services that you forgot to cancel? You could cancel a subscription to a magazine you no longer read, or even cancel that streaming service you no longer use. Are there other reoccurring expenses on your statements? For example, are you going to Starbucks a lot through the month or taking Uber a lot? These are great opportunities for you to cut down on costs!
Cancel unused or unwanted memberships. Buy coffee at the store to make at home instead of going on coffee runs. Carpool with friends instead of getting Uber or Lyft to save on those expenses. These small cutbacks add up! Once you get into the habit of being more frugal, you will start to find other place to cut costs. You will identify ways to save on utilities, groceries, and other necessary expenses. As you start to save, add those funds to your savings account. Within a few months or even a year, you will start to build up your emergency fund.
Get out of debt
Add up how much you are spending on your debt each month. How much are you paying and how much are your credit card premiums and interest? These two items, credit card premiums and interest, are commonly one of largest expenses that people have throughout the month. The good news though, is that you have some level of control on this expense. Get out of the habit of using credit cards to make it from month to month. It can be a hard habit to kick, but it will end up being worth it when you start saving money.
Start this process by cutting up one card and planning out how much it would take to pay it off in six months. Try paying off that amount each month. Even if you are short part of one month’s payment, that is okay. It is all about taking baby steps. Once you pay that card off, move onto the next one. Once your credit cards are paid off, then you can keep using that same strategy for any other outstanding debt that you have. Keeping this as a continual process will eventually get you out of a debt cycle.
Living paycheck to paycheck can be very stressful. Sometimes it feels impossible to stop the cycle. Making a conscious decision to move forward and put yourself in a healthy financial position is a big deal. It should not be taken lightly. Surround yourself with support from friends and family. Even as an adult, sometimes peer pressure can influence your decisions. Evaluate your current financial health by making a budget. Ultimately, keep working to prepare yourself for a better future by using these tips and tricks.