Ideas for saving while trying to make ends meet

A common phrase I hear when I bring up the idea of saving to new financial counseling clients is that they don’t make enough money to save for retirement, or in general. In many cases, they can barely meet all of their required payments. Even so, I encourage clients to save, no matter how little they make. It’s critical to have an emergency fund for when unexpected life events happen.

Without an emergency fund, you can easily go further in to debt, making it tougher to get ahead. The amount you need in your emergency fund varies based on your income. For those who make less than $20,000 per year, start with $1,500. Then focus on building the account to six months of living expenses. Most start with small amounts, setting aside say $10-$20 a week. I have found that once a client sees that they are able to save, no matter how small of an amount, they begin to look for new ways to trim down their spending. Below are a few tips for cutting expenses in order to save:


  1. Keep a spending diary for 1-2 months. Keeping track of spending for a period of time will highlight possible money drains. Didn’t realize you spend $160 a week on eating out? Keeping a diary will show you what you can re-allocate to savings.
  1. Turn off the television. Cable can cost upward of $75 or more per month. By ditching cable, you not only save money directly but also indirectly by lowering your electric bill. It is also likely that by reducing your exposure to commercials, you will spend less.
  1. Write a list before you go shopping — and stick to it. Because when you’re without one, you typically end up making impulse buys and unplanned purchases — all things that cost money. Creating a list before you go to the grocery store is especially important. Not only can it help you buy items that fit with your meal plan, but it can also help you avoid buying food you might waste.
  1. Invoke the seven-day rule to curb impulse shopping. If you are used to buying things when you want them and possibly derailing your budget, set a seven day contemplation period. Wait seven full days before purchasing the desired item. Quite often, after a week has passed, you’ll find that the urge to buy has passed, and you’ll have saved yourself some money simply by waiting. If you’re on the fence about a purchase anyway, waiting a while can give you a better perspective on whether it’s truly worth the money.


  1. Limit spending on drinks and snacks. Meeting for coffee or “drinks” is a popular social event. However, it can also be a budget killer. Ask friends over to your home and brew

your own coffee or rotate bringing bottles of wine or make your own cocktails. Homemade drinks are a much cheaper option.


Retirement is another subject that my clients tend to skimp on; after all, retirement seems like a long way off for most. However, saving for retirement while young is one of the smartest financial choices we can make. The earlier we save, the more time we have available for our savings to grow. And retirement planning is moving away from employer-sponsored plans and toward employee-contribution plans. The responsibility rests more on individuals than ever. In an effort to encourage consumers who don’t make a lot of money to save, the government has created My Retirement Account (myRA). The accounts are intended to be simple, safe and affordable. People can open the accounts with just $25 and can contribute as little as $5 per paycheck through direct deposit. The accounts require no set minimums, have no fees or risky investments. After-tax dollars are contributed to the account, which is set up as a Roth IRA, and the principal earned can be withdrawn at any time without tax or penalty. Participants can accumulate a maximum of $15,000 in the account, at which point it would be rolled over into a private-sector Roth IRA. Currently, funds are invested in government bonds, which usually have more conservative returns. This may not be all bad — it’s important to learn to save before starting to invest. MyRA could be viewed as a starter savings account, a great place to start for those who may be less trusting of the investment world or who can’t meet minimum requirements in the private sector.

Starting good financial habits as early as possible is key to being in control of your money. Everyone can learn to save and to live off what they make. People who make high salaries often get into debt. And people who don’t earn a lot can have an emergency fund, stay out of debt and save enough to retire. The choice is yours.

(Photo from Arrested Development)

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