How to save money on any income

You know you should save money for a rainy day. It may seem daunting in today's economy, but here are some tips for building a savings on any income.

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  • You have that niggling feeling that you should be setting aside some money for a rainy day. But in today's economy, it seems like you're barely scraping by. How can you afford to save when so many of life's necessities are screaming for your attention?

  • I found myself in this situation when I decided to be a stay-at-home mom. I wondered how we would be able to survive on a single income. Saving didn't even seem like an option. However, with some creativity, I was able to squirrel away a little bit at a time.

  • One thing I discovered from my experience is that it is all about attitude. I learned to not think of it as deprivation but rather as control. In fact, I made a game out of it, trying to see how much money I could save each month.

  • Here are some of my savings strategies:

  • Pay yourself first

  • It makes sense that it is easier to save money when you have a lot rather than when you're down to your last few bucks. It is always an excellent idea to participate in a 401(k) if your company provides one. If not, set up your direct deposit so that a portion of your paycheck goes into savings automatically. You could also set up an automatic transfer from your bank account for early in the month before you pay your other bills.

  • Pay off your credit cards

  • It's hard to think about putting money away in savings when you have credit card debt hanging over your head. Work towards paying off your debt first. Once you have a zero balance, start funneling the amount of your old credit card payment into your savings.

  • The $5 savings plan

  • Many of us have cash on hand for minor purchases. Every time the cashier hands you a five-dollar bill with your change, tuck it away in a drawer. Every few months, deposit your stash into your savings account. You will be surprised at how quickly this can add up.

  • Coin jar

  • This is a similar principal to the $5 saving plan. Every time you come home from shopping, dump your extra change into a jar. When the jar is full, roll the coins and take them to the bank. Some banks offer a free coin counting machine in the lobby. It counts your coins and gives you a receipt which you can then bring to the bank teller for deposit.

  • Round up

  • Some banks offer automatic savings when you use your checking debit card. Each time you buy something with your debit card, the bank automatically rounds up to the nearest dollar amount and transfers it to your savings account. They can also match the savings amount during an initial trial period.

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  • Windfall

  • Maybe your great Uncle Harry died and left you, his only living heir, everything in his will. You may be tempted to take the money and fly to Hawaii. Not so fast. I'm sure you deserve a nice vacation, but that money will serve you better if you put all or at least most of it into your savings account. The same thing goes for your yearly tax return. It may be tempting to splurge, but you will reach your goals faster if you put the extra money into savings.

  • Use the envelope budgeting system

  • Dave Ramsey's envelope system is one of the easiest ways to start budgeting. You simply take your discretionary income for the month and divide it into different categories such as food, gas, entertainment and clothing. Then you put the assigned amount into an envelope. Once the envelope is empty, you cannot spend any more in that category for that month.

  • However, if you are frugal, you might find you have some money left over. Instead of splurging at the end of the month or rolling over the amount to the next month, consider putting the remainder into savings.

  • Here are some ideas to make sure you have left-over money.

    • Use coupons.

    • Shop sales.

    • Take lunch instead of eating out.

    • Have a frugal dinner once a week.

    • Skip that expensive dinner and a movie and try no-cost entertainment. Ride a bike, rent a movie to watch at home, visit a park, take a walk or go hiking, visit a free museum or attend a free concert under the stars. Be creative. About.com has many great cheap date ideas.

    • Make most of your meals at home. Do you think you are too busy? Try freezer cooking for added convenience.

  • You may be tempted to put off saving until you are earning a better income. Don't wait! Start small and get in the habit now. You'll be surprised at how fast those pennies add up.

  • This article was originally published on FamilyShare.com. Check out these other related articles: Top 5 financial tips for low income families, 5 ways to thrive on a family budget, and How spending cash can save you money!

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Shelli Howells is a creative fiction writer, and a mother of six.

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