How to save money when you are broke
Living paycheck to paycheck is no way to live. It’s a vicious cycle that can feel impossible to break.
Maybe you feel like you don’t make enough money, or your debt and bills are just too high.
Been there, done that.
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We gradually dug our way out of $33,000 in credit card debt while simultaneously building a nest egg when our daughter was born.
Now all our credit cards are paid off and our net worth is six figures and growing.
Here are 10 reasons you’re still living paycheck to paycheck according to GOBankingRates. Understanding why you’re broke and can’t save money is part of the battle.
Here are 13 easy ways to save money even when you are poor.
#1 BUDGET
I’ve accepted the fact that my husband and I aren’t budgeters, but we were still able to get ourselves out of debt.
As someone who wants you to be debt-free I feel it is my responsibility to present to you all resources and options to obtain that goal.
If traditional budgeting is not your jam, look into the 50/20/30 budget, the cash envelope system, or using multiple bank accounts to manage your money.
Don’t forget to take into account these common budget items people forget.
#2 MONEY SAVING CHALLENGES
A money saving challenge is a fun and visual way to save money and track your progress.
Here is my money saving coloring page challenge plus a list of 11 money saving challenges to try out!
#3 CUT EXPENSES
I mention this in most of my money saving posts and that’s because it works.
Go through your list of bills and see what expenses can be cut and/or reduced.
These are the first expenses to cut if you’re broke.
From there you should:
Reduce your food bill by meal prepping and buying these kitchen items.
Tips to reduce heating bill.
Save money on your cell phone bill.
If you do have to buy something always check Rakuten (Ebates) for cash back and promo codes. We get a check almost every quarter just for buying things we would normally buy.
#4 NEGOTIATE
It doesn’t hurt to ask.
Call your creditors and ask if they can reduce your interest rates or work with you.
Ramit Sethi gives a good script in his book, I Will Teach You to Be Rich as a part of his 6 week action plan to optimize your credit cards, automate your finances, and being more conscious of your spending.
Tell them that you are working to pay down your debt, you’ve been a loyal customer for X amount of years, and would appreciate anything they can do to help you.
#5 AUTOMATE
If you really want to save money when you’re broke you need to make your savings automatic. Set it and forget it.
Each week send a set amount to your account where you are least likely to touch it.
If you’re broke just start with the smallest amount you think you can squeeze out of your paycheck. Maybe it’s just $5 a week and that’s okay.
#6 EMERGENCY FUND
Everyone needs an emergency fund.
Any emergency and unexpected expenses, big or small, will quickly derail your progress.
Set aside enough money so that you can cover at least $1,000, but your long term goal should be a minimum of 3 months of expenses.
Related posts:
The Best Cash Envelope Wallets
How to get out of debt and save money
Tips to achieve all your goals
#7 SIDE HUSTLE
When your paycheck just isn’t enough after all your reductions and slashing bills you may need to temporarily take up some side hustles.
Selling our junk helped us get out of debt so much faster. Now we side hustle so that we can save more, pay off our mortgage faster, and pay for our kids to go to school.
Here is a list of different ways to make money on the side.
Because of our crazy schedules the kinds of side hustles I do now have to be flexible.
One year I made several hundred dollars taking surveys and used that money to pay for our holiday shopping.
#8 SAY “NO”
When you are broke, the word no is your friend.
Do you want to go to the movies?
Do you want to go out to eat?
Do you want to go shopping at the mall?
Being broke sucks, but remember it doesn’t have to be a forever thing.
Maybe you want to hang out with your friends. Instead of going out to dinner and spending $50 suggest everyone come over and bring a finger food and their favorite beverage of choice. Voila! Tapas dinner under $20.
If you want to buy something big make a rule for yourself.
Wait at least 24-48 hours before your make the purchase.
Giving yourself time will allow you to really think things through.
Is this something you need?
Is this something you want?
Do you have money for it? If no, can you save up for it and buy it when you do??
#9 MONEY SAVING APPS/SITES
There are so many money saving apps and sites out there so do your research.
You can use MyPoints, Drop, Swagbucks etc.
I personally use and like iBotta for my groceries and Ebates for my online and in-store purchases.
I have over $50 to cash out on iBotta and have earned $258.74 from eBates this year.
To save money when you’re broke, take the cashback and savings you get using these apps and sites and build your emergency fund.
#10 REVIEW YOUR BILLS
Regularly check your bills for any mistakes, charges, and/or discrepancies.
I have the Capital One Venture card and love that they send me emails and text messages if they see any suspicious charges. I currently have enough points to get over $600 in gift cards, which I plan on saving for holiday gifts.
Make sure you aren’t overcharged or double charged for a purchase. Believe me, it happens.
#11 SWITCH TO NO-FEE BANKING
After reading several great personal finance books I chose to open a checking account with no ATM fees, no minimum balance fees, and that yields interest.
If you’re struggling to make ends meet you’ve probably been hit with bank maintenance fees, overdraft fees, atm fees, etc.
A lot of people don’t know that there are banks out there that offer fewer fees. Some people do know about them, but don’t want to take the time to move their accounts around.
These fees can add up. I accidentally went under my minimum balance in our checking account and was charged 2 overdraft fees at $35 a piece and a $15 maintenance fee. That comes out to $85!
When you’re living paycheck to paycheck $85 cover several meals. Don’t waste that money on silly fees.
#12 BALANCE TRANSFER
When we went into credit card debt it happened very quickly and it was one thing after another. My husband suggested we do a balance transfer because we couldn’t make all of our payments without incurring loads of interest.
At first I was against if, but after doing my own research it ended up being the best thing for us.
A balance transfer is good if you can pay off the full amount in the allotted time frame. Also take into account transfer fees and the interest rate after the promotional period.
#13 TRACK YOUR MONEY
One of my regrets when working our way out of debt was not writing things down.
When you put the pen to the paper and see the daunting numbers of your debt and your income, things start to get real.
Set your financial goals.
I now keep track of our finances with an online spreadsheet and my handy notebook that I use to constantly crunch numbers and see how much more we can save to pay off our mortgage faster and invest more.
Check out this popular budget tracker on Amazon.
It helps you monitor your spending and stay organized.
If you’re visually motivated this erasable goal thermometer is great. It’s very satisfying coloring in those lines 🙂
CONCLUSION
It is very possible to save money when you have a low income. Figuring out how to start is the hardest part.
Let’s recap!
Review your numbers by writing them down.
Cut your expenses.
Reduce and negotiate your bills.
Participate in a money saving challenge with family and friends for some friendly competition.
Automate your savings so you save even just a little bit a week.
Build your emergency fund so you don’t go into more debt.
Create more income if you are still having a hard time keeping up with your basic bills.
Say no to “wants” and unnecessary spending for a bit.
Use money saving apps and sites to increase your savings faster.
Regularly check your finances for any mistakes.
Find a better bank so you are charged fewer or no fees.
Consider a balance transfer if your interest rates are high and you can’t pay even the minimum on your bills.
Start tracking your money and make it work towards your financial goals.
Don’t give up and don’t be deterred by small setbacks. We had many moments where it was 3 steps forward and 2 steps back.
You can do it too! Don’t forget to pin these ideas for later 🙂
