Tips & Resources

Save Money When Living Paycheck to Paycheck

Save Money When Living Paycheck to Paycheck

Many Americans, for one reason or another, must work hard each month just to cover everyday living expenses. Perhaps they owe unpaid medical bills, student loans, or credit card debt. Add to these the cost of housing, utilities, transportation, and groceries, and it may be difficult to even consider saving money, let alone actually setting funds aside. Experts agree, however, that saving money and establishing an emergency fund of at least $1,000 are critical to financial health. Here’s how to save money when living paycheck to paycheck.

DETERMINE YOUR MOTIVATION
As with any goal, success is more likely when you have a firm understanding of the reasons behind the goal. What is your motivation for saving money? Do you want to build up a fund to cover unexpected vehicle or home repairs? Are you saving for a down payment on a new house? Will your child be starting college soon? Visualizing the end result may make the process easier.

CREATE A BUDGET
You can’t save money if you don’t have a thorough understanding of where your money goes each month. Spend some time recording every expense, from your mortgage payment to the value meal at the drive-thru. Then create a budget to cover essential expenses. Read more tips and suggestions for budgeting and money management.

CURB YOUR SPENDING
While examining your expenses, you may discover many unnecessary purchases that you can easily eliminate. Brew your morning cup of coffee at home, pack a lunch, and put together a monthly meal plan to save on restaurant and grocery expenses. See what you can remove from your weekly grocery list. Put a spending freeze on entertainment and travel, even if it’s only temporary. Cancel subscriptions for streaming music and movies or other non-essential services. Be aware of how much electricity and other utilities you’re using. Turn lights out when you’re not in a room, wait to run the dishwasher or do laundry until you have a full load, and take shorter showers. Ask your spouse and other family members to do the same.

PAY YOURSELF FIRST
Once you’ve contained your spending, it’s time to start setting money aside. Experts agree that your savings account should be a priority and you should pay yourself first. If you can, decide on a set amount to save each month and have the money directly deposited from your paycheck into a savings account. Otherwise, make it a point to transfer the money before paying other bills.

The Bank of Elk River offers a wide range of savings account products and services to fit your individual situation as well as many financial literacy resources on our website. Find more tips for saving money and determine how much money you should save to cover unexpected expenses with our Emergency Fund Calculator.

Contact us for more information or to schedule an appointment with a personal banker.

Tags
Emergency Fund Budgeting Financial Literacy Saving Money Paycheck to Paycheck Money Mangement

Categories:

Tips & Resources