How to Save Money When You Have No Money to Save

When people are asked why they do not save money, most give a perfectly reasonable response — they don’t have any money to save.

With so many people living paycheck to paycheck, the low savings rate is certainly understandable.

That does not mean, however, that you cannot save any money at all. Even if you think you have no money to save, you can probably scrape together a few bucks here and there. This step-by-step process can get you started even if you think you are incapable of saving.

Step 1 – Put Something in an Online Savings Account
It doesn’t matter if it’s the dollar you found in your couch cushions or the two bucks you saved from your last paycheck. Putting something into an online savings account will get you started and give you a sense of accomplishment.

Using an online savings account instead of a local bank will also make you less likely to withdraw the money. There are plenty of online savings accounts with no minimum balance requirements or monthly fees, so finding one should not be difficult.

You can make that online savings even more valuable by seeking out an account with an opening bonus. Competition is fierce among online banks, and some offer bonuses of $50, $100 or even $200 or more to get your business. If nothing else, the bonus will jump start your savings.

Step 2 – Set Aside 1% of Your Net Pay
When you get your next paycheck, look at the net amount (after taxes), then move the decimal point two places to the left. That amount is 1% of your net pay – and the amount you should transfer to your new online savings account.

If you can save more, go for it. The important thing is to transfer something this pay – -and every pay period from now on. Saving 1% is not hard. If your net pay is $500, 1% is just $5.

Step 3 – Transfer 1% of Your Gross Pay
Now it is time to ramp up your savings. Instead of saving 1% of your net pay, put aside 1% of the amount before taxes. You will have to check your pay stub carefully to find this amount – it is probably near the top.

Log on to your online savings account and transfer 1% of the gross amount. Again, if you can save more you should do so. The point is to get into the savings habit.

Step 4 – Work Your Way Up to $100 a Month
If you are living paycheck to paycheck, saving $100 a month probably seems like an unattainable goal, but you do not have to do it all at once. You are already saving 1% of your gross pay, and you can work your way up from there.

The next time payday rolls around, transfer 2% of your gross pay to the online savings account. Save 3% next pay, then 4%, 5% and so on until you reach the $100 mark.

The discipline you gain through this strategy will be almost as valuable as the money in the account.

Saving money is always hard, especially when you have no money to save. Even so, establishing a disciplined saving strategy is important, and the sooner you get started the better off you will be.



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