Save Money if You Are Living Paycheck to Paycheck – Frugal Confessions

Save Money if You Are Living Paycheck to Paycheck

If you are living paycheck to paycheck, then you know that there is not an ounce of money to spare for your saving account no matter how much you’d like to build up your savings. However, by not saving money, you are only ensuring the permanence of your current stressful lifestyle. I want better for you and for your future; I want you to have financial freedom in your future instead of bill cycles and anxiety. In order to have this, we need to find ways to get your money from your paycheck into your saving account using your current income. Below are some ideas. Please remember that any of these ideas are useless if the extra money they free up does not actually make it into your saving account.

Tap Your Tax Resources

If you are living paycheck to paycheck and have been for awhile, then you are surviving on what you make. Everyone just received a 2% “raise” from the government because they lowered the social security taxes by 2%. Give this money purpose, and make sure it goes into your savings account. Depending on what your household makes, it could mean an extra $50, $100, or more in savings per month.

If you receive a tax refund at the end of the year, then sit down with your HR department and figure out how to adjust your withholding so that the extra money ends up in your paychecks. Then earmark this extra money for your savings account each month.

Deposit Your Two Extra Paychecks

If you are paid every other week, then there are two months out of the year where you will receive three paychecks. Since you are used to living on two paychecks per month, this should feel like winning the lottery (okay, a lottery that you had to work 40+ hours for). Instead of earmarking this golden nugget for a large purchase, or letting it sit in your checking account to be slowly squandered away, deposit it into your savings account pronto. I am paid once a month so this does not apply to me. However, Paul is paid twice a month, and June is the next month where he will receive an extra paycheck. We will be using his extra paycheck to invest and grow our net worth.

Break Your Contracts

If you are living paycheck to paycheck, that means you cannot afford your current financial obligations. Look at your contracts for your cell phone, cable, rent, utilities, car lease/payment, etc. Some will be easier to get out of than others. Because of cancellation costs, some will not be financially worth it to break. The first step when breaking contracts is to find a better deal for the services that you will still need, like a phone, a car, and utilities (read: cable is not a necessity and you should be eager to give it up at this moment in your financial distress in order to sock away the extra $60 per month towards financial freedom. An example of people who recently did this is from the show Downsized).

  • Cell Phone: You can get out of your contract without paying the $175+ early cancellation fee. Sell your contract to sites such as CellSwapper or CellTradeUSA. There are some great pay as you go cell phones available that you can sign onto.
  • Utilities: This is geared towards utility markets like the one we have in Houston where there are numerous utility companies that compete against one another. While you may still have to pay a fee to get out of your utility contract, many companies offer $200-$300 to switch to their cheaper rates. You can use this money to offset the cost of early termination with your other company.
  • Cable/Internet: You will want to call the cancellation department of these companies and tell them that you need to cancel your contract. One of two things will happen: they will offer you a better deal, or they will be able to temporarily suspend your contract to give you a few months off for free until you can pay again. Either is great to boost your savings.
  • Car Lease/Payment: Is your car payment or lease more like an apartment payment or mortgage? Cars are not a good investment—they lose value as soon as you roll them off the car lot, which is why you should typically buy used and let the first owner take a hit on their investment. Still, you can sometimes get out of these obligations. For an un-leased car, you can attempt to sell it. For cars that are leased, you can use services such as or where you can list your car and a buyer who is looking to take on your lease will hopefully find you. Transferring your lease does not ding your credit score, but you cannot do it without your lease company’s consent. Make sure you understand your contract and discuss your options with your lease company.

Take in a Roommate

I have an aunt who lives in a beautiful area of D.C. in a gorgeous, two-story home. How did she afford to live just a few blocks from the metro in our nation’s capitol? At least since I was born, she has taken in roommates. She posts the ads in the newspaper, conducts interviews, gets to know the candidates and then makes a decision. A lot of these people are students, people traveling on business for a period of time, and people from foreign countries. She has met a wealth of individuals, made connections to last a lifetime, and each month, she gets to divide up the mortgage, utilities, and all other house expenses by 2-4.

I lived with a roommate during my first year out of college and the savings were dramatic. Even if you have a family, this can be an option for you. Do you have a basement, or a spare bedroom and bathroom? Are you within distance of a major city or a college campus? Think about the possibilities.

Attack Your Variable Expenses

Variable expenses are the ones that are easy to trim, as you are in control of them and typically are not bound by any contracts. These categories include transportation, food, entertainment, clothing, habits/addictions, etc. We will tackle these as individual categories in upcoming articles.

Other Articles You May Enjoy:

How to Get Nearly Free TV
How to Quit Smoking Cigarettes (Paul kicked his habit several years ago and is definitely saving money—woohoo!)
Should we Keep a Roommate After Marrying?
Tenant from Hell

19 comments… add one

  • Great article! I like that you not only gave tips, but suggestions on how to make the changes you advocate. I need to call our cable company again to try to get a discount. Unfortunately, around here there is not much utility competition.
    Melissa recently posted..Be a Sprout Head &8211 A Guest Post

    • FruGal

      Hello Melissa!

      Good luck with the cable company discount–people have had a lot of luck with knocking down prices (though some for only a few months at a time).

  • Since I quit smoking January 15th i’ve saved close to $150. Thanks for the mention!

    • FruGal

      That is great! Plus think of the future health bills you may have saved yourself.

  • MoneyIsTheRoot

    Yes very good article. I didnt know about those cell phone sites. Im good with Verizon, but I can understand those that need cheaper monthly plans. T-Mobile and MetroPCS offer some amazing deals as well… there is always cheaper to be found.

    I got myself into an expensive lease, I love the car a lot, but its just so much money…ive considered swapalease…

    • FruGal

      Good luck with your car lease–how long is the term on it?

  • Taking in a roommate would probably be the easiest way to make some extra money! I’m excited to do this very soon! :)
    LifeAndMyFinances recently posted..Pay Off Your Debt Fast- A Personal Story

  • Alan @ Money Sanity

    Great advice!

    We have been very happy with the straight talk prepaid cell phone plan. Since we have 4 cellphones in our home and had been using Verizon the monthly bill was lowered by nearly $100 per month.
    Alan @ Money Sanity recently posted..Steve Jobs 12 Rules of Success

  • These are great, practical ideas. Regarding car leases, I once owned a really awful Audi 5000 that was constantly breaking down and needing repairs. I actually traded it in for an inexpensive lease on a new Nissan and came out way ahead that year. Cars can suck a lot of money from the budget, so I appreciate your comment that “cars are not a good investment”!
    Eliza from Happy Simple Living recently posted..9 Simple- Free Things You Can Do This Weekend to Be Healthier

  • Jen

    Something we do is whenever we pay cash for something we save the change. If something costs $1.50 – we pay $2 and put the 50 cents in a jar. Even if something is $1.01, we pay $2 and put the 99 cents in the jar. It adds up to a few hundred dollars a year!

  • Lesley Hayden

    Some might think the title of this article; Frugal Living and Interior Decorating is an oxymoron; “a combination of contradictory words”. The truth is, when it comes to interior design and decorating, its not about what you have in your home that’s frugal but what you do with it.

  • Marvin Benton

    A greener lifestyle at home is a key step in going green and saving money as well. In addition to the energy-saving and water-saving steps you can take, reducing waste is also important. Setting up a home composting pile or bin is a great way to reduce the waste you generate every day.

  • Patricia Snider

    With more and more people accumulating debt everyday, our nation is calling out a cry for help. By simply changing a few things in our day to day lives, we can at least make a dent in our debt problems, if not solve them completely. Many people don’t realize there is anything they can do to fix their situation, but here’s a few simple things you can do to save money every day!

  • Leonor Wise

    We as consumers struggle daily with the need to Save Money Live Frugal and how to go about doing it. If you learn to spend wisely you can become a “smart shopper” and watch your savings grow. It only takes a little discipline and forethought to get you started on your way to saving. And, you never know the challenge might even turn out to be a fun one.

  • Ronda Jennings

    One benefit of going green is saving money. Some of the best green living tips that also save you money are easy to do and take very little time to implement.

  • Fernando Clements

    Can going green actually save you money? Maybe you are not convinced of that. If so, that would be entirely understandable. Without a doubt, there are a number of consumer items promoted under the “Green Living” rubric that cost more than comparable “non green” items. Evidently, there are enough consumers who are willing to pay a premium for products and services labeled “green” that marketers can make a good living selling various items this way.

  • Guy Oneil

    I had no conceived notion what I wanted to be or where I wanted to live after I graduated high school. I valued the comforts I had by living at home, but I also wanted to experience my freedom and a life out from under my parents’ wing. I seriously started to consider getting my own place. However, when I consulted others who had made the choice to move out rather than remain at home with their parents, their advice was to remain at home as long as feasibly possible. After careful consideration, the answer was clear. The job market was tough and competitive, and the cost of living was just too high to get my own apartment; I then made the decision to remain at home with my parents because it was the most obvious and sensible choice. So I stayed at home, studied at a local college, and paid for my personal expenses via a low paying job. I had no appreciation for money and I was spending it on absurd novelties faster than I was earning it. I was in a rut and realized that this lifestyle could not continue.

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