How To Save When You’re Living
Paycheck to Paycheck
Equifax, one of the three major credit reporting agencies, shares that a staggering number of Americans – nearly 80 percent – live paycheck to paycheck, and this problem has only been exacerbated by the COVID-19 pandemic. If you are barely making ends meet, it can feel like you're stuck in a trap and powerless to break free. While it can be somewhat challenging to end the cycle of living paycheck to paycheck, there are actionable steps you can take to slowly start saving money.

Write out your budget

The first step to saving money, is writing out a detailed budget. Once you have budgeted for the necessities - housing, food, utilities, transportation, etc. – make a list of your discretionary spending. Many people who live paycheck to paycheck have already cut down on all non-essential spending, but if you haven't taken a close look at your budget in a while, you may find areas where you can minimalize spending. For example, you might be able to reduce your food budget by eating out less or shopping at a less expensive grocery store. Perhaps you can temporarily cut out cable if you realize you're not using it enough to warrant the extra expense. If you ever receive a windfall that you didn't expect, such as a bonus or a tax refund, aim to put the money into your savings or apply it toward debt.

If saving within your current income and budget parameters isn't working and you have extra time, you might consider taking on a side gig to make additional money. Plan your budget so that any money you earn from odd jobs can go directly into your savings account.

Open a savings account

A designated account is essential as you begin to build up your savings. Look for an interest-earning savings account with limited access so that you can't easily transfer the funds to a checking account. Once you've opened a savings account, make an initial deposit and then contribute to it whenever you're able.

Many people find it helpful to set up automated payments each month to add to their savings. Even if it's just $10 or $20, knowing that you're adding to your savings little by little can decrease the stress of living paycheck to paycheck, and the dollars will add up over time.

If recurring automatic payments don't work for you, try simply “paying yourself first.” When you receive each paycheck, deposit a small amount into your savings before you use the money for anything else. Some weeks it could be $5, others $25, depending on your expected expenses. This approach will ensure that you are at least saving some of your paycheck. Unlike automatic payments, however, you can adjust the amount based on what you can afford in any given week or month.


Debt – whether small or significant – can make saving much more difficult. Luckily, there are ways to prevent debt from entirely limiting your saving ability. Try to pay down as much of your debt as you can before you begin building up your savings. You may also want to consider refinancing your debt to a lower rate. Talk with one of our lenders – they can pull a copy of your credit report and help you determine the best course of action.

Renegotiate your bills

To start saving, pay direct attention to your monthly bills – utilities, cable, phone, insurance, credit cards, etc. First, browse your current plans to determine whether you may be able to cut back. For home utilities, like gas and electric, you likely cannot choose your provider, but you can call and try to renegotiate your rates. Alternatively, you can cut down on your usage to lower your bills, even if only slightly. Many utility companies offer free energy audits in which they inspect your home and point out opportunities to be more energy-efficient and save money in the process.

You'll also want to look at all of your insurance policies, including car, homeowners, renters and life insurance. When your policies are up for renewal, shop around for better rates. You may also be able to bundle your policies, as some insurance companies will offer a discount if you have two or more policies with them. For homeowner’s insurance, tell your agent about any improvements you've made. For auto insurance, make sure your plan lines up with how much you're actually using the car because you may be able to lower your rates if you drive less. Many policies also include discounts for multiple cars and a safe driving record, or for teenage drivers who earn good grades.

If you have credit card debt for multiple accounts, you may be able to save on your monthly payments with a balance transfer or refinancing your credit card debt to a personal or home equity loan. Again, talk with one of our lenders. They’re happy to provide advice and help you determine the best way to lower your debt.

Be patient

Building up your savings when living paycheck to paycheck could be a timely process and require extra energy, but it is doable. You may find that there are few areas where you can cut back and it may take longer than you anticipated, but making even small, regular contributions to a savings account can be incredibly stress-relieving and motivating. It might be fun to watch those deposits add up over time. Eventually your efforts will pay off, as you reach your savings goal.

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