I live paycheck to paycheck: How can I begin to save?

person calculating expenses

You’re paying your bills, putting food on the table and doing just about everything you can to meet your most basic needs, yet you feel like you’re just barely scraping by month after month. It’s difficult to imagine a way to begin saving when you’re constantly waiting for your next paycheck. Although they can be difficult to build, savings accounts are necessary for your financial security. Even if you’re already spending the bare minimum, there are still a few small ways you can start building up a savings account today.

Start with a budget

It’s the most basic piece of financial advice, but it’s often overlooked, especially if you’re a person who is constantly monitoring your finances. Even if you’re diligent about checking your accounts and understanding where your money is going, a budget provides a trackable visual for you to see where your money is coming and going. Set a budget that factors in all of your monthly expenses and use that to see if there is anything you can dial back in order to put more toward your savings.

Take a good look at your statements

When you receive your month-end financial statements, set aside some time to go through them. Maybe there are automatic withdrawals for things you no longer use, like streaming subscriptions or a gym membership that you signed up for years ago and forgot about. See if you can weed out any of these recurring payments to save yourself a few extra dollars each month. Whatever you end up saving, put it into a savings account.

Understand what you’re saving for

Whether it’s building an emergency fund or saving up to move into a better place, take some time to understand why you’re saving. Once you’ve set a goal for yourself, you can develop your plan of action to achieve that goal. Figure out the amount of money you’re able to put into your savings account each month and use your budget to get yourself there.

Open a separate account

Open a separate account so you can divert money from your checking account into your savings account. Once money is dropped into your savings account (we offer a You-Name-It Savings Account), do not touch it until you need it for whatever you’re saving for. With separate accounts, it’ll be easier to keep track of your savings and you won’t be tempted to use your saved money for other expenses.

Every penny counts

Whether it's change you find in your car or a few unexpected dollars that come your way, save it. No amount is too small to start saving. There are small ways that you can start slowly building your savings account by rounding up to the next dollar. For example, your grocery bill is $54.35. Take that $0.65 you didn’t spend and put it into your savings account. There are also several low-fee apps that automatically do this for you. By adding up small change, you can build yourself a small amount of cash to put toward your savings goals.

Automate your savings

To better automate your savings, try having $5 from each paycheck deposited directly into your savings account. If you’re paid bi-weekly, that means you’re getting paid at least 26 times each year. By depositing $5 from each paycheck (and not withdrawing any money from your account), you’ll end up having $130 in your savings account at the end of the year plus any dividends you earned. When you get a raise, devote some to additional savings.

Negotiate

Negotiate costs like car insurance, credit card interest rates and rent. It doesn’t hurt to ask, and the worst-case scenario is they’ll say no. Just be sure you are prepared for the negotiation. Make sure you’re able to prove you can make payments if a fee is reduced, know about other offers from different lending companies and explain your situation. To potentially reduce your rent payment, talk with your landlord about work you can do around the apartment complex, or if you can get reduced rent if you commit to living in that unit for two or more years. It wouldn’t hurt to review your phone or cable packages as well. You may be paying for extra features that you don’t even use. See if you can weed out any of these add-ons to get a better rate.

Conserve home energy

Not only is conserving energy helpful for the environment, it’s helpful for your wallet, too. Control the temperature of your home by programing your thermostat to use air conditioning only when you need it. The same goes for winter where you can program your thermostat to drop a few degrees cooler at night or when you’re away from your home. Try conserving water by taking shorter showers or turning off the water while you brush your teeth. The more energy you conserve, the more you’ll save on your energy bills.

Creating financial security for yourself or your family is essential, but it can be difficult to save if you’re already struggling to make ends meet. By taking a closer look at your monthly expenses, negotiating your costs and making small adjustments in your daily routine, you can begin saving little by little without selling your personal possessions or drastically changing your lifestyle. If you want to learn more on how you can save with Landmark Credit Union, stop in any of our convenient branch locations. We’re ready to show you how you’re worth more here.

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