How To Save Money When You Can’t Afford To

By Cara Palmer   Updated 05/05/2021 at 9:30 am

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Recurring subscriptions, impulse shopping, eating out — it’s easy to get stuck in the habit of overspending. Getting out of this rut and learning how to save money, especially when you can’t afford to, may seem impossible.

Except it’s not.

With a few changes, you can trim your expenses, get out of debt, and start to save money.

Here’s how.

1. Automatically Transfer Money To Your Savings Account

You can’t go wrong with a basic savings account, even if most don’t always have the best interest rates.

Not sure how to save money? Start your savings journey by opening a savings account and linking it with your checking account.

We are emotional creatures. We may know what’s best for us financially but ignore it. You probably know that you should save some of every paycheck, but some other expenses appear from nowhere.

Automatically transferring money to your savings account will help ensure that you save without necessarily thinking about it. It’s the easiest way to make sure you pay yourself first.

Almost all banks offer automated transfers. It’s easier if you’re not the one responsible for moving the money. Every time you receive your paycheck or get paid by direct deposit, you can have your bank automatically transfer a pre-determined amount of cash from your checking account to your savings account.

You should save as much as you can afford. Automatically saving $30 a week turns into $1560 a year.

And if you use the 1% rule for saving money, you will quickly get used to living on a little less. With time, you won’t miss the amount that you’re paying yourself in your savings account. Just don’t make your savings account easily to get to on your debit card.

2. Consider a Side Job to Help You Save Money

It is easier to save more money if you earn more. A smart way to increase your savings is to act like you never had some of your money in the first place.

If you cannot cut costs any more than you already have, diversify your income. There are several ways to earn extra money. You can bring in more money by taking a second job, asking for overtime at work, selling stuff you don’t need, or starting a side hustle.

Most people have a marketable skill they can use. You can do many side hustles from the comfort of your home in your spare time.

You can offer guitar lessons, deliver packages for Amazon, give tours of your local area, host estate sales for a commission, mow lawns, walk dogs, babysit, paint houses, blog, etc. When you keep yourself busy with a second job, there’s not much time left to shop and spend money.

3. Track Your Spending

To save more money, learn how to track your spending. Split your earnings into three classes by following the 50/30/20 rule. The first class is necessities, second personal spending, and finally savings.

If you don’t have a budget, you are in good company. Two-thirds of Americans don’t keep a household budget. If you do have a budget, first take a second and congratulate yourself. Now, go through your budget again. Take a hard look at your regular monthly expenses like phone service, cable, and internet.

It helps to know how much money is going towards bills and expenses every month. On the first day of a new month, get receipts for everything you pay for throughout the month. For the lazy among us, you can get an app that automatically tracks expenses.

Once you have your data, organize the expenses by category and total each amount. Your budget should show how your costs measure up to your income.

4. Pay Off Debt

Saving itself is already hard, but debt robs you of your income. Debt repayments are a big reason why people can’t save.

Saving without a purpose is even harder. Setting specific goals like creating a realistic debt repayment plan and sticking to it will help you save more. Saving money is a mindset, and with the right mindset, nothing is impossible.

To be financially independent, pay off debt. Learn how to tackle your debts head-on instead of accumulating more debt. High-interest debt can eat up your monthly income.

If you have multiple debts and want to use a debt avalanche, pay off high-interest debt first. These can be debts from credit cards, student loans, and personal loans. By doing this, you will save more money on interest charges and outrageous fees.

Freeing up additional money in your budget will allow you to do more things with your hard-earned money.

5. Try A No-Spend Challenge For One Month

Understanding the difference between needs and wants is an excellent way to get your spending in check.

That designer dress looks cute on you, and you want it now. But do you NEED it right now? You have probably made a few impulsive purchases in the past, even when you visited the store with a shopping list in hand. What follows is feeling the buyer’s regret.

One of the most important rules of finance is avoiding instant gratification. You need to devise a system to help buffer your impulse purchases. A self-imposed 30-day rule is a proven way to implement that system. See it as a contentment challenge.

A no-spend challenge is when you decide to only spend money on essentials for a particular amount of time. Doing a no-spend challenge for a month will help you figure out the spending you do on little things.

Here’s how to do it. Jot down the things you’d like to purchase on a sheet of paper. Wait for a month before hoping to buy them. You will discover that after the 30 days, more often than not, many of the items on the list are no longer interesting to you. You’ll have saved yourself some dollars by merely waiting.

Waiting will help to tame impulse buying and help you buy what’s useful and relevant to you. So next time you’re on the fence about making a purchase, waiting for 30 days can give you a better perspective on whether the purchase is truly worth the money.

6. Shop For Better Rates

Comparison shopping is essential when you’re living on a tight budget. You’ll be surprised by the amount of savings you can make with a little effort. Sometimes, getting a better rate is simply a matter of asking for it.

Comparison shopping will also make you more aware of your everyday spending. Remember, any amount of savings is a step in the right direction.

There are comparison shopping apps and websites that will let you compare product prices to find out where to score the best deals.

Car Insurance

Car insurance is a great place to start when shopping around for lower prices on your regular monthly expenses.

When you own a car, you have to get car insurance. Don’t settle for the first car insurance you come across. Shop around, compare quotes, and ask questions about coverage under each level of insurance.

If you are a loyal customer who hasn’t received a new quote for car insurance in a while, try contacting your provider to see if you can reduce bills. Your car insurance company may give you a special price if you threaten to switch to another company. In most cases, rather than losing a loyal customer, it’s easier for them to lower their rates.

Changing your car insurance is also a smooth process. Most folks don’t know they can switch their car insurance if they find better rates elsewhere. Find out if your current plan can match it. If they can’t, you may want to switch.

Before renewing your existing auto insurance policy each year, remember to check introductory rates of competing companies. Make sure you get the best deal.

Cell Phone

If your monthly cell phone bill almost equals your monthly grocery budget, it’s time for a change. You can cut back on extras like costly phone insurance, data plans (if you have access to WiFi most of the time), and unnecessary warranties.

Most of us get in a routine of using the same service provider, and we may not even recognize that we’re not getting the best deal.

Call your service provider and explain to them that you need a lower rate – or else you’ll opt for a different provider; if you’re currently outside of a contract term, better for you.

Jackie’s note: We switched from a regular plan with AT&T to a prepaid plan with AT&T. Literally the only difference is that we now pay MUCH less in advance vs. more at the end of the month. Otherwise the plan is the same!

Or switch from a prominent service provider to one of the smaller companies offering service in your area for cheap. Try small carriers like Republic Wireless, Straight Talk, Consumer Cellular, TracFone, and Net10.

Cable TV

Still, wondering how to save money? The average price for cable TV is around $217 a month. When you realize that cable costs up to $2604 a year, it’s easy to understand why saving can be such a problem.

If you still use cable, chances are that you’re paying a premium package with hundreds of channels but rarely watch TV. Try downgrading your cable package. By changing your cable package, you could cut your cable bill by a LOT.

Here are some alternatives to cable TV to get you started.

Beyond the obvious health benefits of reducing screen time, decreasing over-reliance on cable TV can save you money (a lower electric bill, less exposure to spending-inducing ads).

Many American homes are cutting the cord. If living without TV isn’t an option, but you have a smart TV, ditch expensive cable packages for affordable internet-based network apps, and a single streaming service like Amazon Prime, Netflix, Sling TV, and Hulu+.

If you don’t own a smart TV, buy an Amazon Fire TV Stick, Roku, or Android Box to turn your TV into a smart TV. This way, you can continue watching your favorite shows.

7. Save Your Spare Change

You can also try a save your change challenge. Little things add up quickly! Saved money is similar to a snowball; once it forms, it starts gaining momentum and attracts more money.

Studies show that you spend less money when you pay with cash instead of cards. Paying with cash for shopping or daily living expenses means you can’t spend more than what you have.

Collect all of your loose change and see how much you can save in a month. You can spice up things and make it a competition with your family members.

If you shop with cards, there are several round off apps for saving money. Good examples include Qapital and Acorns. But how do these spare change apps work?

Let’s say you buy a $3.65 coffee with your credit or debit card. The app rounds up the purchase to the nearest whole number, with the extra 55 cents moved to savings.

If you carry on saving your spare change for a full year, you’ll have stashed away a decent amount.

8. Eat At Home

It’s shocking how much money Americans spend on food and drinks when going out to restaurants. Eating out is the number one expense for most people. Dining out can be a wonderful way to spend time with family and friends. Eating out once in a while is okay. But when you eat out several times a week or grab a morning latte every day from Starbucks, the cost goes up.

I completely understand the convenience of ordering takeout. But by changing the way you eat, you’ll put more money in your pocket. Brewing your coffee at home, and eating home-cooked food will save you money without having to earn more. Besides, homemade meals are much healthier for you and your family, and probably taste better too.

If you have a baby, you know how expensive baby food is. Instead of buying it from the store, make your baby food. Packing your lunch a few times a week is another excellent way to save money and stay healthier. Get a cookbook and channel your inner Gordon Ramsay by trying some new recipes.

While you’re at it, try going meatless for a couple of days per week too. Some call it Meatless Monday. Cutting meat from one day a week (not necessarily on Monday), can save a few bucks. You can try other inexpensive protein sources like eggs and beans in place of beef, chicken, and fish.

Planning your meals will save you money.

When you know what you’ll have for breakfast, lunch, and dinner (say for a month), you can shop for groceries accordingly.

When you fail to plan meals properly, you may end up visiting the grocery store multiple times during the week – another spending trap.

Take a good look at your pantry before you head to the store. Many grocery stores launch new sales midweek, generally on Wednesdays, so shop on Wednesdays to get first access to new discounts and promotions.

While bringing a list to a grocery store is a good step, following the list is essential. Food shopping when you’re hungry is another no-no.

Here are some great ways to meal plan that are easy to put into action.

9. Save Money by Downsizing Your House and Car

Besides the above-discussed money-saving ideas, you can try cutting back on bigger expenses to make more of a significant impact. You don’t have to say no to all joys of life. Just try to be smart about how you spend money.

Living below your means is an excellent way to save money. The problem is that we want to live in prestigious neighborhoods, buy expensive houses, and drive luxury cars to keep up with the Joneses. Be clear about what matters most to you and develop a financial plan that supports that vision.

Housing tends to be the most significant part of many households’ expenses. According to the Bureau of Labor and Statistics, housing takes an average of 27 percent of our pre-tax income.

You don’t need a giant place to live. Try downsizing and sell the extra stuff you don’t need on apps like Letgo. Another option is living with roommates.

If you own your home, refinance your mortgage to repay a lower interest rate. Refinancing can save you several hundreds of dollars every month. Alternatively, Airbnb a room or rent a parking space.

Instead of driving the newest fuel guzzler, get yourself a reliable and fuel-efficient car. New cars make terrible investments. A car loses 10 percent of its value as soon as you drive it off the car dealership. The same vehicle loses about 60 percent of its value in 5 years.

Do the math. Instead of going for a brand new car, try a well-maintained second-hand car. Refinance your auto loan to take advantage of lower interest rates.

Looking for even more ways to save money? Check out this ultimate guide to money saving tips.

About Cara

Cara Palmer headshotCara Palmer paid off over $20K of debt and then started investing in rental properties.

Cara writes about getting out of debt, making money, working from home and Smart Money Tips over at You can also find her on Pinterest.

How to save money when you can't afford to

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