How to Save Money When You’re Living Paycheck to Paycheck - AmintaDemadura.com (2024)

When my husband and I got engaged, we really didn't make very much money. He had a full-time job and I had a new pet care business that was just getting off the ground.

And with the cost of living soaring in my hometown of Portland, OR, expenses were higher than ever. On top of that, we also had $16,000 in debt between the two of us.

We knew that we were going to want to start a family at some point after we got married, but to do that was going to require some real financial preparation. Thankfully, we worked hard and were able to pay off the last of our debt 3 days after we got married. And it only took us 8 months!

Here are some tips we learned along the way about paying down debt and saving money while you are living paycheck-to-paycheck.

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Another big budget killer is your car(s). Many American families now have two, three, or even four cars in their name!

When you factor in the cost of fuel, maintenance, tires, repairs, and insurance, cars are an extremely expensive way to get around. Not to mention, if you have financed them on top of that, the situation is even worse.

I'm going to challenge you to take a really hard look at your car situation and see if you can pare down.

Our family used to have two cars. Then we moved to Seattle and my husband began biking to work, so we decided to have only one car.

After months of little use on our one car, we then realized that with so many other options available to us, we really didn't need a car after all.

Now we are car-free, and rely heavily on walking and biking to get around. We also have a city bus pass and access to Uber and Zipcar should we need it.

I know the thought of giving up a car or two is hard, but the majority of families can make it work. And the savings can be huge! Even if you can get by for the next 3 to 6 months with one less car, you'll see much more money in your savings account.

Another big money suck is your grocery bill. I don't know about you, but groceries are the number one thing I am most likely to overspend on. Which brings me to my next point...

If you are getting a refund around tax time, save it in an account that isn't linked to your checking account. It's really important that the accounts aren't connected, that way you can't accidentally dip into it later on.

Saving all of your tax refunds and windfalls that come your way is a great way to put a few thousand dollars in savings without having to change your lifestyle.

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One of my favorite little ways to save is by using theAcorns app. Acorns links to your bank account and rounds up each of your debit card transactions to the nearest dollar, taking the change and putting it aside in your Acorns account.

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If you have any non-mortgage debt, one of the best things you can do to stop living paycheck to paycheck is to pay it all off! Monthly payments and interest eat away at your monthly budget so quickly.

When my husband and I were paying off debt, we followed the Dave Ramsey approach and used the snowball method. Here's how it works:

1. The snowball method asks you to first list all of your debts on a piece of paper from the smallest debt to the largest.
2. Then you begin paying the minimum payment on each of your debts, while focusing everything you can on paying off the littlest one.
3. Once the smallest debt is paid off, you rollover that debt's minimum payment plus any extra money you were able to throw at it, and start sending that money towards the second one. This is “snowballing”, and it's an incredibly effective way to pay off debt quickly.

I think one of the reasons that saving can be so difficult is because we try to make it complicated.

Relying on yourself to remember to put money aside, or to somehow keep two debit cards from not using all of the money in your checking account is crazy. It's just really hard and there are so many variables to account for.

When you put that money on autopilot at the very beginning of your pay period, it's like it doesn't exist. You never see it, so saving it isn't an issue. I highly recommend setting up automated savings withdrawalstoday. Even if you can only start with a small amount.

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Once you setup your automated savings, another thing you can do is start saving any leftover money from your checking account at the end of the month.

I personally like to go in the day before payday and anything that is left over I sweep into our savings account. This is a great way to incentivize you to spend less throughout the month, and start off each month on equal footing.

It's also fun to see how much you are able to add to your automated savings. Of course, if you find yourself with hundreds leftover, it's a pretty good sign you are ready to increase your automated savings.

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If all else fails and you've cut everything you can cut, and you automated what savings you can, the next step is to get a side hustle to bring in some extra income.

Whether you choose to rent out an extra room on Airbnb, start a profitable blog, sell your handmade crafts on Etsy, or something else, making extra money on the side can help you build a good emergency fund quickly.

It doesn't have to be something you do forever if you're already working really hard and are short on time, but it might be just the thing you need for the next couple of months until you reach your savings goal. ​

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