We all know we ought to save, but the idea of saving when we don’t feel like we have anything left in our bank account at the end of the month can seem overwhelming. Here are some tips to get your savings on track when you’re living paycheck to paycheck.
Start with an emergency fund.
Confused about where to start your savings journey? Sometimes it’s hard to know what to prioritize. What should we save for first – our retirement, our kids’ education or should we pay down debt?
Why not start with an emergency fund? It can be a lifesaver – literally. A rainy-day fund can stand between you and financial ruin.
An emergency fund should be at least $500-1,000 that is set aside in a separate savings account, one that you can access if necessary, but is not the same account you pay bills from.
Save automatically each pay period.
This is the quickest – and most painless – way to save. By setting aside an amount to be deducted from either your paycheck or transferred from your bank account each pay period, you can steadily build up your savings. You won’t miss it because you won’t ever “see” it or be able to spend it. Even saving $20 each pay period will get you to a $500 emergency fund in less than a year. Once you’ve built up your emergency fund, move on to other goals and not worry about living paycheck to paycheck.
Cut back whenever and wherever you can and REALLY transfer that money to your savings account.
There are dozens of ways to cut back on your spending: you can start by ordering out less often and doing away with unnecessary subscription services and memberships. But the key is once you have reduced that expense, transfer those savings to your savings account. Otherwise, the extra money is way too tempting to spend!
Don’t be afraid to ask for help.
Finances are super personal, and for some reason are seen as a taboo subject. We have all struggled with saving, and we all need help sometimes. The good thing is that military families have lots of resources available to them. Every military installation has a financial counselor and there’s free, confidential financial counseling available through Military OneSource and when you take the Military Saves Pledge, the start of a simple savings plan.
Each military relief society (AER, Coast Guard Mutual Assistance, Navy–Marine Corps Relief Society, and Air Force Aid Society) has emergency grants or interest–free loans available, both way better options than turning to high interest credit cards or loans.