Saving money is essential in order for you to turn your financial situation around because it builds a safety net to help you cover random expenses whenever life throws them your way.
Life can be very unexpected, so having a decent amount of savings can help you feel more financially secure, stop living paycheck to paycheck, meet one of your financial goals, or even all three.
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But I Don’t Make Enough Money to Save…
Here are 5 ways to save money when you’re broke and get rid of that ‘I don’t make enough’ mindset.
1. Adjust your Lifestyle to Save Money When You’re Broke
If you don’t earn a lot of money, you can try to find a new job or add an additional stream of income. In college, I lived on about $500-600 per month and this was with a child. Granted, I was receiving some financial help from the government for food and medical care, but I also worked a part-time job during college and increased my income while living a very basic lifestyle because not working during school was not an option for me.
Even now, there’s been times where I only have $50 left from my paycheck to spend freely after I’ve paid all my bills and contributed to savings and I just have to make it work. I know that deep down if I ever felt like I wasn’t making progress with my financial goals, I could always move in with my parents to regroup and save more money.
I probably wouldn’t like it because I enjoy my space, but it would be a temporary lifestyle adjustment to get me to the next level.
A great way to save money is in the area of purchasing groceries. Fetch Rewards is an app that helps you stretch your dollar even further by helping you earn points and rewards on your regular shopping selections. It basically removes the hassle of coupon clipping and the stress of shopping around for the best offer. Not only do you save money but you also save time so it’s a double win. You can learn more about this awesome app here.
Once you start to become honest about what type of lifestyle you can afford and embrace simplicity, you’ll be able to save more even with a lower income.
Related: How I Earned $6,000 in One Summer by Side Hustling
80+ Extra Income Ideas That Don’t Suck
2. Pay Yourself First
This is a popular way to ensure that you save money every month. When you get paid, transfer money directly to your savings account or set up a recurring automated transfer to do it for you. Then, you can spend the remainder of your money on bills and as you please.
Your best bet is to set up a high-yield online savings account. Online savings accounts are great. You can manage your money from the comfort of your own home, and since the bank doesn’t need to fund local branches, they can offer much higher interest rates on savings account so you can actually earn more money on your account balance as opposed to just pennies per year.
I use CapitalOne 360 because it’s free to open an account and they don’t have a minimum balance requirement. As an added bonus, they offer a .75% interest rate on savings accounts and you can receive a $25 cash bonus when you open your account as long as your first deposit is at least $250.
When paying yourself first, I still believe you need to have a budget in mind. If you overdraft and have to pay fees, then this strategy will need to be adjusted. After you’ve calculated all your fixed and necessary expenses, determine a good amount to save so all that’s left in your account will be money for variable expenses and non-necessities. Learn how to budget here.
Related: Why Do You Need a Full Emergency Fund?
3. Get Free Clothes or Buy Used
To generate savings from this particular area of your budget, you can either commit to not buying clothing for a few months and contributing that money to your savings account instead, or you can reduce your clothing spending by purchasing gently used clothes or obtaining clothing for free from family, friends, giveaways, and clothing swaps.
For used clothing, there are plenty of nice places to find gently used clothes in good condition beyond the typical Goodwill stores. I personally like Plato’s Closet and Clothes Mentor. I also shop at online consignment shops like ThredUp which offers gently-used clothing for some great deals. With ThredUp, you get a free $10 to spend just for signing up.
4. Avoid Late Fees and Cancel Subscriptions
Check all your accounts to see if you are paying any unnecessary fees that can be canceled. Some checking and savings accounts and even credit cards charge a useless monthly fee so it’s important to make sure you’re not paying extra for not having enough money in your account or some other insignificant reason.
I am actually going to call one of my credit card companies this weekend who is charging me some $14.50 maintenance fee each month for practically nothing since I don’t even use the card anymore. It was my first credit card so I keep it open to help my credit history, but the fee is just so not necessary.
You should also make sure you are paying your bills on time so you don’t receive any late fees and cancel any subscriptions you have as well. If you are on a tight budget, subscriptions are just not worth it in most cases.
This includes Netflix and Hulu. Combined they come out to about $16 to $22. While it’s a cheap solution to cable, it’s also not a necessity if you don’t have the extra money. If you have internet, some networks share their shows online for free each week or you can always check out YouTube series or get an antenna to watch basic television at no cost.
Related: 50 Expenses You Can Cut ASAP to Save Money
5. Refinance your Debt
Nothing is worse than having debt and feeling broke. If you are trying to make ends meet and have unpaid balances to deal with, it can get stressful. Refinancing your debt may be a good option to lower the interest rate and/or your monthly minimum payment amount.
Since I count certain debt payments as saving as long as you aren’t accumulating additional debt, you may find some relief in this option. If you have federal student loans and are going through a financial hardship, you may be able to qualify for deferment to postpone your requirement of having to pay on your loans month.
LendEdu is one of my favorite free resources when it comes to refinancing student loans because it lets you browse different offers for a lower interest rate without even running your credit.
Not everyone will qualify for deferment and it’s only an option if you truly need it because there are a few downsides like having to pay more over the life of your repayment since your payments are lower. However, during the time your loans are in deferment, you can save up money to build a solid emergency fund.
Being able to save money when you’re broke can be a true challenge, but it’s always worth it in the end because you can’t get ahead financially if you don’t save. Once you get over that obstacle, there will be much better days.
Have you ever felt so broke you couldn’t save? What are some extra tips or strategies you would add to this list?
My Favorite Resources
CapitalOne 360 – My favorite high-yield online savings account. Earn $25 when you open an account.
Ebates – This is my favorite and easiest way to earn cash back for regular online shopping. Ebates partners with most online retailers to help you apply coupons to your purchases AND cash back. They pay me a nice check every quarter with my earnings.
Betterment – This is where I keep my Roth IRA. Betterment is my favorite investing tool because they do all the heavy lifting for you which is so helpful especially if you’re completely new to investing and have no idea what you’re doing.
CreditSesame– My go-to tool to check and monitor my credit for free.
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Aliyyah @RichAndHappyBlog says
Adjusting your lifestyle is a huge one. I have considered getting a roommate. It would save me at least $400 per month. Ultimately, I choose to stay in my one-bedroom apartment and make it work with my budget by making other sacrifices like not having a car.
Another way to save more is to make more by getting a side hustle.
Choncé says
All of those are great ways to save money. I never had a roommate besides my now fiance. When he moved in, it felt great to cut my living expenses in half. Side hustling has also helped me increase my income tremendously so I could save even more.
The CryptoStaunch says
Thanks a lot for this guide Chonce. I really appreciate your effort for crafting such a wonderful content, but i am actually looking for a way to do this with cryptocurrency investment. Do you have any idea?
Jason Butler says
You definitely have to pay yourself 1st. It’s not always the easiest thing to do, but it will eventually become a habit.
Choncé says
I agree. Sometimes it’s so hard for me to save and seems boring, but when unexpected things happen, I’m so grateful that I have the money so it always pays off.
DC @ Young Adult Money says
These are really great tips. I give similar advice to people who don’t have room in their budget to save. It can initially be much easier to adjust your lifestyle, cut expenses, etc. than trying to increase income, but I do think there comes a point where pursuing increased income can have more of an impact.
Choncé says
I like to do a combination of both. Since I focused on cutting my expenses as much as I could first, I can optimize saving the extra income I earn on the side.
Latoya @ Life and a Budget says
I’ve been trying to tackle this subject because “I don’t have enough money to save,” is one I hear quite too often. I often can’t find the words to “put it nicely” so to speak so I haven’t said much, but you’ve pretty much said everything that someone could do to save money when they feel like their broke. One aspect that I think people fail to understand is that when they are “broke” they often feel like they are “poor.” I think the two are totally different things. Broke is temporary and can be changed and being poor doesn’t quite work the same. Some people who are broke have a poor mindset and this prevents them from receiving this type of advice. I think to break this cycle, they have to start with their perception of their situation.
Choncé says
That’s so true. Saving actually starts with your mindset, not your wallet.
Kristin says
Subscriptions are the worst, they always get me ha! I hate the ones that charge your account but you never get an email receipt. I found one charged on my bank account last week and called the company and they took it off. At least tell me when I’m getting charged!
Choncé says
Yeah subscriptions are rough that’s why I stopped them altogether. I used to have a subscription with Just Fab and it allowed me to skip the month if I didn’t want to buy anything so I wouldn’t get charged, but my memory sucks and I always forgot to skip.
Michelle says
Paying yourself first is so important but many people struggle with it because they aren’t first on their list for anything. What I’ve noticed is that a lot of people are: helping family, taking care of kids, etc, etc. They end up last on their list. It’s not surprising that saving for themselves ends up being last too.
Choncé says
That’s a good point. It can be hard to put yourself first but the way I see it, I can’t help other if I can’t even help myself so I try to prioritize my needs so that when I’m stable I can give back and help others with their needs and goals.
Hannah says
These are excellent tips. If you’re truly living paycheck to paycheck (as in having to take your paychecks to a check cashing outlet), then it can be well worth your time to look into local financial counseling services. Local services can work 1-1 with low income people to help them create a 3-6 month plan where they can get into traditional financial services and save on late fees, interest, etc.
Choncé says
I agree. Financial counseling is a great resource for people who need help breaking the paycheck to paycheck cycle.
Dear Debt says
Yes! Such important tips!
Choncé says
Thanks Melanie! 🙂
DC @ Young Adult Money says
I think a lot of people overlook the benefit of either refinancing or reworking their debt. A TON of college grads have such huge debt levels that that it can feel like they are unable to save, even if they do have a good job. I think refinancing that debt or just looking into income-based repayment can make a big impact.
Taylor says
I’m with you on the account fees. I still have accounts that I started when I was in high school not thinking about the fees, etc. I know I need to change them to free accounts it just takes soooooo much work. I need to set aside time to reorganize.
Choncé says
Yeah definitely. I used to be such a procrastinator with those things. Then when I’d get charged, I had the nerve to get all mad lol. That’s why I just don’t subscribe to anything anymore.
Kayla says
There’s almost always a way to save money if you want to badly enough. Good post!
Choncé says
Thanks Kayla!
Frugal Millennial says
Great tips! I think a lot of people feel like they don’t have any options, but there are more ways to save (or earn more) than they realize!
Choncé says
Agreed!
Shaun says
>who is charging me some $14.50 maintenance fee each month
Geez… I just paid the yearly “maintenance fee” for my first credit card recently which made me realize it’s about time I call up and cancel it. But since it’s only $29 a year I put it off because having the extra line of credit is nice, it gives me peace of mind or whatever. But man if it was $14 a month I’d cancel that thing real quick, lol.
Choncé says
Yeah, I had really bad credit so I could only get the crappy cards. But yes, the fees are pretty unneccessary so definitely go for a card that has no annual fee or monthly fee. There are tons of good options out there.