How Can I Save More Even When Money's Tight?


Q: I want to start saving money, but I don’t have much extra left over after I pay my bills each month. What should I do?

Pay yourself first. That means that rather than waiting until the end of the month to see what’s left over (a.k.a. paying yourself last), you automatically transfer money into a savings account as soon as you get paid. Here’s how to get started:

First, earmark a small amount that you probably won’t miss. It can be as little as $25 a month at first, and you can increase it any time. The most important thing when it comes to building up your savings isn’t the amount, but developing the habit itself. Next, consider setting up a savings account at a different bank or credit union than where your checking account is. This way, the cash you automatically transfer will be out of sight, out of mind, and you won’t be tempted to move it back into checking.

This should get you in a good rhythm. Once you’re used to saving regularly, increasing the amount you put away won’t feel so difficult when you start earning more or get a windfall, like a bonus or tax refund. And that windfall cash is also more likely to stay in your savings account. Just don’t forget to set aside a small amount to have fun with, too, to create balance and ensure your savings plan doesn’t feel restrictive. You work hard for your money, and should enjoy some of the fruits of your labor, too!

Related: 101 Ways to Save More Money Now

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