Most of us know we should save money, it’s good financial sense. Yet, it’s easier said than done, especially when you feel strapped or broke on a daily basis. Sure, your cousin Bill makes saving sound so easy, but he’s making six figures and lives in a low-cost state. Saving is no problem! But what about those of us that make below our town’s “average” income and live in a high-cost state or area?

Saving is still possible.

Step 1: Figure out how much you actually spend –

  • First, tally up all the necessary costs: rent/mortgage, food (groceries and eating out), utilities, transportation, debt repayment (see below – it gets its own category!) and insurance.
  • Next, tally up the “others”: going out, cable, maybe even the internet, vacations, and hobbies.
  • Take a good hard look and see where you can save, even if it’s just a little bit on the necessities and “others”.
  • Want to be extreme? If extreme measures don’t frighten you off, you might be able to cut down the BIG bills by moving to a cheaper area, getting rid of the car and switching to less expensive transportation options, cutting the cable, or taking on a roommate.

Step 2: How can you make more income? –

  • Calculate your monthly income from all sources (regular job, side gigs, babysitting, etc.)
  • Next, ask yourself if you have the time to take on some extra work? Could you dog walk a couple hours a week? Mow a neighbor’s lawn? Or take on a part-time job?
  • Any increase in income counts – even if it’s only $50 a month.

Step 3: Get your debt under control –

  • This is a top reason many people feel “broke”, they owe money. Can you reduce your interest rates? Call the banks and ask.
  • If the interest won’t budge and you have good credit, research a 0% balance transfer option. Many cards out there are offering 18-month 0% interest on balance transfers. Just make sure you can actually pay the amount off in the time required!
  • Add up all the debt you owe, average out the interest rate, and use a debt repayment calculator to figure out the minimum amount due each month to pay it off in X amount of months. This ‘X’ will vary based on how much you owe, but the sooner you pay off your debt, the more money you’ll have to work with.

Step 4: Save money –

  • If you’ve done step 1, you might have been able to save a few bucks, even $10 is a start. Begin putting that into a savings account every payday automatically. If you don’t see it, you won’t spend it.
  • Completed step 2? Split that extra income into savings and debt repayment. Put half of it towards paying off debt and the other half towards savings. Don’t have debt? Great, apply all of it towards savings!
  • If you’re working on step 3, you might have to be more aggressive with paying down debt for a certain number of months and then focus on saving. The silver lining is that all the debt payments will eventually turn into savings payments.

Step 5: Don’t get discouraged –

  • Did great saving $100 bucks last month but zippo this month? Don’t give up. Instead, make a point to save the next $20 you make.
  • Pat yourself on the back for progress. If you’re savings account increased by even $10, celebrate – at home without spending much money, of course!
  • Remember, setting your savings on auto-pilot is the key to saving – put it away before you spend it!

How do you save money? Were you able to save even when you felt “broke”?


  1. Paul @ The Frugal Toad Reply

    Setting up automatic savings is a great way to save, even if it is for a small amount. Another source of savings is to take at least 50% of any cash windfall like a gift or tax refund and throw that into savings.

  2. We are always working on increasing our income. We are looking for ways to cut spending too.

  3. Keep track of income and expense is the first step. It’s too bad so many people don’t know where their money go. We got a reader budget profile on my site today. They needs some help controlling their spending.

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