How to Start Saving Money (Even if you’re always broke)

Broke Save MoneyA few years back, our finances felt completely hopeless and I hated it. My husband was bringing home around $1,600 a month after taxes, but it just wasn’t enough to cover our spending. Our credit cards were our saviors and the balances kept rising. He worked so hard but had nothing to show for it, aside from growing debt. What could I do?

Like many other people lacking wisdom in personal finance, I did an online search about getting out of debt and saving money. The results were typical: save 10% of your income, save $50 every month, spend less. A plethora of common sense was laid in front of me and it just made me feel worse. Each month our debt was growing, so how could I save 10% of nothing or $50 we didn’t have?

I experienced many emotions after that; I was sad, frustrated, angry, overwhelmed and I was ready to give up altogether. As the days went by, I started thinking about the main point of saving money. If one source says to save 10% of your income and another says to save $50 each month, the amount is irrelevant. I might not have been able to save a lot of money then, but I could spare a couple bucks. We were already spending too much, so what harm could come from increasing it a bit?

Those couple bucks were the foundation for what we have now. I opened an account with Capital One 360 (formerly ING Direct) and setup a weekly automatic transfer of 99 cents for every Friday. Sure it might have only started out with a couple bucks (actually $1.98) with each bi-weekly paycheck but that was enough to get us started.

Momentum slowly built and I was able to add in an additional weekly transfer for the same amount, then I increased it to $1.00 (which wasn’t noticeable at all), then I eventually made my way to 5 weekly transfers of $1.00 each. It might have only been $5.00 that we were saving each week, but it felt empowering.

Then other things came like cutting our expenses, stretching our money, budgeting, paying off debt, tracking spending and so forth. We never seemed to have to money to pay for our car insurance every 6 months, so I setup another transfer for $2.00 5 days per week—going straight into our Car Insurance sub-account at Capital One 360.

Now we don’t worry about not having the money to pay our car insurance, because it’s always there. If our rates ever change, I can adjust the amount we transfer to reflect the new amount.

Thanks to a little creativity, a passion was sparked in me for personal finance. Today, I have a personal finance blog, an emergency fund, no credit card debt and am trying to make better financial decisions each day. We even started making contributions to a 401IK, opened a Roth IRA and an investment account. Our net worth might not be much but as long as we keep doing what we can it will keep growing.

Everybody has to start somewhere; otherwise they will never start at all. Small changes over time can make a big difference, so if you’re not ready to make dramatic changes to your finances…at least start with baby steps.

The main point is that you are doing something (rather than nothing) to progress toward what you want. Making small changes might not get you there quickly, but they can motivate and inspire you to continue on your journey. It all adds up. :-)

About Jen Perkins

Likes: saving money, being debt free (aside from our house), zombies, travel, getting money, blogging and dogs. Dislikes: debt, being broke, bunnies, wasting money, not having enough money to travel the world and paying interest. Facebook  ♥  Twitter  ♥  Google+  ♥  RSS


How to Start Saving Money (Even if you’re always broke) — 38 Comments

  1. I found that starting WLGYL was a first step toward saving money – I had to educate myself on what other people were doing in this regard, and then start saving. I had to start saving only $25/month, but now I’m up past $200/month even with my debt payoff.

    On that same note, my income has almost doubled so I should probably be putting away more.

    • I think blogging about it helps me do better too. Starting with $25 a month is way more that I did. Paying off debt and being able to save so much at the same time is awesome. :-)

  2. Lighting that fire to win is tough, especially when facing a mountain of debt that will take years to pay off, even in a best case scenario. There were times I wanted to quit, and those feelings came from anger and frustration. The key is to celebrate small victories, and like you said, any forward progress.

    • Exactly! Sometimes when we want to achieve something, it’s hard to wait so long to get there…but it’s way better than never starting. :-)

  3. I am where you were several years ago and going through the same emotions that you went through. You are right, it is very frustrating!! There are many days (like today) when I just want to throw in the towel and give up.

    • Yep, money and emotions just seem to go together. I’m glad I didn’t give up and I hope nobody else does, it gets better—sometimes it’ll get harder first. 😉

    • I feel you, even a buck made a big difference with us. I always try to remember just how difficult it was in the beginning. :-)

  4. I like your idea of saving up for the car insurance, instead of using one lump sum at the end of every six months which can break your bank account if you don’t have enough. How is this working out for you?

    • It’s still working fabulously after all these years. :-) I’ll never go back to the way it used to be, no sir!

  5. I love that you started by just saving $1! It’s proof that every dollar counts – and those who say they can’t say anything can at least save $1. Congratulations on making it to where you are now.

  6. Nice post Jen! I’m going through a bit of a setback right now. Increasing debt, looking for new employment, not making enough, it’s tough. But I have my goals and I keep in mind that money is temporary. This month and summer may be tough, but in time it will get better.

    • Thanks Rachel. :-) I’m sorry to hear about your setback, that really sucks. At least you have a positive attitude, that will help you navigate the storm. Good luck on finding a new job. :-)

  7. Whoooooooott! I love stories like this. I’m so glad for you. We’ve been there – done that and now (long years later) are in a position to leave a legacy to kids and grandkids.

  8. Very interesting post! I am struggling wiyh finances right now. My wife and I make a combined $4800 monthly, after taxes. Our bills account for $3000 of that. We each get $40 per week as “blow money” to spend on lunches or drinks at work, etc. We have a great life with really all that we need. However, it is hard for me to work as physically hard as I do and come home to no savings account. I find that every Saturday morning ( just after our checks are deposited) my wife goes out and buys things that we don’t need. It sometimes adds up to a few hundred dollars. I have made comments to her about it but her response is always “we have everything we need, do we?!”. How can I make a change? She handles the finances because I work so many hours. I don’t have a desk job like her either. I don’t want to argue or fight with her, but I want to start building a nice savings account for later on, or atleast have money aside incase we need it. We do not have any credit cards so there is no excuse for living paycheck to paycheck. Please giveme some tips to help me make her aware of this issue without causing a fight. Thank you

    • Wow, that’s quite a pickle you’re in Allen. I have noticed that people who do manual labor (opposed to desk jobs) are usually the ones who need to have something to show for all their hard work. Maybe because your wife works a desk job, that need isn’t as strong for her. Or maybe it is, but instead she fills it with stuff.

      I think honestly opening up to her and sharing your feelings about this is the best idea. Sometimes we say things here and there, but they don’t really make an impact. Sitting down to a serious conversation makes it more real, and harder to ignore. To keep from getting her mad, make sure to say things like “I feel…” instead of you do this, you waste money, you… It makes it less of a personal attack when you make the issue more about yourself.

      Maybe suggest that you two put 1/2 of the extra money that is spend on your “wants” into an emergency fund.

      Or if she doesn’t like the idea of saving money at all, you could increase your “blow money” up to the amount normally spent on wants. That way, she still has money for the things she likes to buy & you get more money that you can do what you like with (like save).

      If she doesn’t see the value in having emergency money, play a game and come up with possible bad things that could happen and how you two would be able to cover them. For example: your transmission goes out and you can’t get to work, one of you gets laid off, you get in a huge car accident and end up owing lots of money. You know what I mean, just get her thinking about the benefit of not having to sell stuff off, borrow money or being broke.

      Overall though, what works best for me is constant honest communication with my husband and compromise. If everybody gets exactly what they want, one person will always suffer…so it’s best to meet in the middle and make both people happy.

      I hope that helps, it’s the best I could do with just a little information. Feel free to email me if you have any other questions. :-) gotmonkees @ gmail
      Jen Perkins recently posted..Potential Savings Goal: A Second CarMy Profile

      • Hey Allen

        See that all the time in my family and with my wife, the key is as with debt reduction, slow and steady progress. As you mentioned you don’t want to get into arguments so it means being patient.

        First thing I would do is “google” or “bing” if you prefer “how to talk to a spouse about money”

        Secondly if you wife reads blogs start forwarding her articles, this is the I did it with much of my family

        Third is to talk about it in a neutral manner, not easy I understand. Talk about your concerns and worries. Be prepared for the usual “but I want to enjoy life” comments. Even my Wife says that when ever I talk about ramping up our savings (10 years or so to retirement) so I always reassure her that I love enjoying life but life is full of trade offs.

        Finally remember change takes time. 10 years ago my sister in law would visit us here in Europe and run up massive CC bills, finally over 12 years of prodding she still comes but saves up cash for flights and spending, huge change.

  9. I love this story. It’s funny, I write about PF, read about PF, and still am sometimes flummoxed at how I’m going to save 10% or more of my income. I do save something each month, but I really need to automate more often, even if it’s only a couple bucks more a week! Man, I have a post going live tomorrow that I now want to scrap due to this post! Maybe I’ll write a follow up that’s more realistic. Thanks for the inspiration!
    Little House recently posted..Budgeting FactsMy Profile

  10. If you have this wasteful way or spending money, or when you have this wrong perspective on how to handle debt and your daily expenses, you will always end up broke no matter how much you earn. I know someone who is like that and it’s a pity to look at him every pay day knowing that all of his moeny will just go to paying his debts with so little left for himself.

  11. I’m just glad that my finances are all in order. No debt for me – got through school on scholarships.

  12. Sometimes things are getting too emotional when thinking about money. One small step at a time and everything could be achieved

  13. I enjoyed your story you shared at Canadian Budget Binders . I went & joined your It doesn’t matter where you are in your budget never stop learning & sharing with like minded people. Thanks for your caring. Good luck to you & others who are on this road.

  14. I started with a piggy bank and upgrade it in opening a savings account. That was the best decision anyone could make to be able to save for the future. It won’t take much effort, just wise investment and intelligent spending.

  15. Hello Jen, your mentioned money saving ways are really make sense. The fact is I don’t know how much effective these ways will be for me to save money. I’m very bad at saving money and always gets punished by my wife and mom because of wasting money upon so many things. Though I’m looking forward to follow above mentioned ways and hopefully these will work for me nicely. Thanks.

  16. Hi everyone, its good to read these ideas. Im a mom of three. My husband and i have had serious struggles and still do. I had to select real estate as a career to allow me the flexibility for my kids. Corporate jobs were not available and it just made sense for my kids otherwise i would be fired many times over with my babies and 9 yr. old, and my husband got tired of not getting paid by his employers, so he started his own business. We are barely getting by. Im truly scared we will be living in the street. My motivation is down the tubes Im trying to use my faith to keep me from getting more depressed. HOW can I overcome this to push myself. I feel like im frozen and things just keep getting worse and I really feel frozen. what can you suggest..

  17. Hello Jen really lad you were able to achieve much in your desire to save some extra bucks.
    as you clearly stated how to start, this means there is no excuse not to save money.
    do have a great day.

  18. Hello Jen! Thanks to your little tip, I started saving money even though it didn’t seem like it was possible. My husband and I had a savings account with our bank, but everytime the money transfered over there we transferred it back into our checking to spend. I ended up opening a high interest savings with Ally and they automatically took a little amount each time I got paid. Its been only 2 months but I doubled what I am putting in and do not even notice it missing! The great thing about the savings account, it takes 2 days to transfer back into my regular checking so it is an incentive not to dip from it. Thank you and I hope others can learn from this post.

  19. Love these tips, but there are some more you should be aware of:

    1) drop the smart phone and get a “dumb” one. Save about $50 per month. Get a low-priced tablet (e.g., Kindle Fire) or use your old iPhone as a wi-fi only device. Wi-fi is available everywhere; you really don’t need to pay for cell-based data plans
    2) call your car and home insurance company and tell them you want to go through all your coverage because you found another carrier that is cheaper. They’ll probably help you “find” 10% off or more.
    3) speaking of car insurance – An expensive policy from GEICO, Progressive, etc. is not needed. You can find one usually for less than $25/month from 4AutoInsuranceQuote. If you spend too much on car insurance from one of those big companies, chances are you are simply funding their expensive TV ads with cute animals.
    4) compare what your house is really worth to your assessment. Many assessments have never been properly adjusted down to reflect the market over the last 4 years. We cut our property taxes by about 20%.
    5) re-fi your 30-year mortgage to a 15. The interest rate will drop by at least 50-75 bps, more depending on your current rate. The payment may go up slightly, but it is because you are paying off your loan faster. If it’s possible, get the mortgage paid off before the kids go to college. At a minimum, have it paid off before you retire.
    6) review your credit card bills for all the things you are paying $10-20 per month for that you no longer need. I bet everybody has at least a couple
    7) drop all magazine (paper and on-line) subscriptions. If you look around, you can find comparable content for free.
    8) review your investment portfolio for ways to replace higher fee mutual funds or ETFs with lower fee ones. S&P500 funds/ETFs shouldn’t charge more than 0.10% in fees. Fees may be higher for specialty funds, but they are all coming down fast. If your company 401K uses high-fee funds, talk to the folks in charge. A difference of 25 bps in fees will mean a difference of about 5% in your portfolio value after 25 or 30 years.
    9) and of course the most impactful — never carry a balance on a credit card. If you can’t resist, cut up the cards.

  20. I learned a lot of this blog and replies here posted by different kind of people… I am thinking to start saving for almost 5 years but couldn’t start yet by one or other excuse… But this blog inspired me deeply and I am starting my savings from today even if it’s a penny… In Shaa Allah I won’t give up…
    Thanks dear for such an inspiring blog… Hats off