About a fourth of American full-time employees say that they have less than $1000 in their emergency fund. In the middle of bills like rent, cellphone, student debts, and maybe Netflix subscriptions, saving for major life goals such as buying a car or a house can seem like a pipe dream.
Erin Lowry, a personal finance expert behind Broke Millenial, says, “The point of saving, even just a few dollars, is to start building the habit.” You may not be able to save $15,000 this year, but there’s a good chance you can save $150 or even $1,500.
Here are 5 tips to save money when you’re broke:
1. Face your debt
The major reason people don’t have savings is because they’re making debt payments. While it is inevitable to take student loans, cutting out a high-interest credit card debt should be your priority.
Clearing off some of your debt, even a small chunk of it, could give you enough wiggle room to pay in interest into a savings account instead.
2. Convince yourself that no amount is too small
You don’t have to get a pay hike or commit to a strict barebones budget to start saving.
Start by setting aside as little as $5 a week and putting it into an interest-earning savings account, separate from the bank accounts you use to pay bills. Just putting your savings in one place can motivate you to add to it since you can watch your efforts pay off.
Focus on what you can save, not on how much you should be saving
3. Put your savings on autopilot
One cheat that actually makes sure you do save is to set up automatic withdrawals. You can either arrange a direct transfer from your checking account to your savings account. There are a number of mobile apps that allow you to do this fast and easy, such as Digit or Acorns.
4. Make saving a creative challenge
Once you’ve built the habit for saving, look for more ways to set money aside. You can take public transportation instead of a Grabcar ride and save at least $10 a ride. Try packing lunches for yourself to save another $25 a week.
Find a few more avenues in your lifestyle that you can cut out, or swap for more cost-efficient alternatives, and you’ll be amazed how much extra cash you can get saved.
5. Be honest about your spending
Take a closer look at the way you’re spending by recording every expense in a budget tracker app like Mint, You Need a Budget, or Personal Capital; or you can do this old-school way by writing them down on a journal or a simple Excel spreadsheet.
Read the full article by Vice.com here for more tips on saving money when you’re broke.
Thanks for sharing! Very helpful. In the world we live in today, it’s very hard to save.
Glad to have helped! Thanks for dropping by 🙂
Good post. A very practical and easy approach to managing debt.
Thank you. Glad you enjoyed it. 🙂