When living paycheck to paycheck, it's hard to set aside any money at all, let alone start saving substantially for things like retirement and emergencies. You get a paycheck, you immediately use it for rent, student loan payments, utilities and more, and all of a sudden you're left with just barely enough to get by. So how can you even think about saving?
Well, the truth is, you can and you should, because the last thing you want is to be stuck with an emergency room bill or totaled car and have absolutely no money. In fact, most financial experts agree that everyone should have at least $1,000 in savings for those types of financial emergencies. To that end, here's how to save money-- even when it feels impossible:
Get in the Right Mindset
Saving money is more than just a habitual practice-- it's a mindset. Like starting a new workout regimen, saving money must be a lifestyle you're completely committed to in order to be effective. So, the first step to saving money is making the decision to do so. That way, when you're enticed by that sale at the mall or a nice dinner, you'll have a clearly defined reason to say "no."
Start Small - Very Small
Saving money doesn't have to mean putting 10% of every paycheck away. You've likely heard it before, but every dollar counts. At first, save more like 2% or even just $20 per month. OK, maybe that won't make you rich as fast as saving a more substantial amount, but the important thing is it's a start. For weeks or months that you don't spend quite as much, put a bit more in savings than you normally do. Just commit to saving something, no matter how small the amount.
Make it Automatic
When many people first start learning how to save money, they find it's easiest when it isn't a conscious decision. In other words, if you have your bank automatically transfer money into your savings account every time a paycheck is deposited, you won't even see that money for long enough to consider spending it. If auto-transfers make you feel a bit out of control, take on that responsibility yourself.
Deny Yourself Access
One of the hardest parts about saving money is seeing it accrue and knowing you could use it if you wanted to. If that sounds like a feeling you're familiar with, do yourself a favor by setting up an account that's a bit harder to access. For instance, ask your bank if they can add an account that can only be accessed by physically walking into a bank to make a withdrawal or using an ATM card. If you don't have a debit card attached to it, you'll be less likely to swipe first and regret later.
Keep Careful Track of Your Spending
It goes without saying, but how much you spend has a direct impact on how much you'll be able to save. If you know you have some spending problem areas (like eating out a lot or buying an unnecessary amount of upscale sneakers), focus on reducing those however you can. The best way to spend less (and save more) is to know where every dollar is going-- then you can pull back in certain areas. If you can't do this without a bit of help, try using budgeting apps like Mint, Mvelopes, or BillGuard to track your spending and come up with a financial plan.
Cut a Few Expenses (At Least for Now)
As you start keeping better track of your spending, look for certain regular expenses that you may be able to do away with completely. Are you still paying for cable that you rarely watch, a magazine subscription that goes unread more often than not, or a gym membership you could replace with free workouts in your apartment? Get creative, and know that you don't have to give these things up forever. Even just cancelling for a few months can allow you some wiggle room to save more money faster.
You can also look at refinancing options for certain expenses, like car payments and student loans. See if you can spend less each month on those- at least for now while you're working on building a savings account.
Find Ways to Earn More
If you have some extra time on your schedule (even if you work a 9-to-5 office job it's likely that you do), consider finding ways to earn some more money each month. Pick up dog walking or babysitting gigs, or even do some freelance work on the side. This is beneficial for two reasons: One, you'll be making more money. And two, you may find yourself spending a bit less if you're, say, babysitting on a Friday night instead of going out.
If you're trying to figure out how to save money, remember: It's doable, you just have to be committed, organized, and focused on an end goal. You can do it!
