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When money is tight and times are tough, it can seem nearly impossible to start saving money. While taking out a short term or payday loan is sometimes merited, we know it is a very bad idea to take out multiple loans, or worse, to keep “rolling over” your loan. One way to break this cycle, and to build an emergency cash fund, is to start saving money. Believe it or not, you can save money when times are tough. All it takes is little steps. Remember that you can’t save up for emergency expenses (or even Christmas or a vacation) overnight, and you can’t change your whole personal financial situation around in a day.



“It is better to take many small steps in the right direction than to make a great leap forward only to stumble backward.” – Old Chinese Proverb


Here are 5 ways you can get started today:

1. Get On A Budget – It May Be The Only Way To Cut Spending

Believe it or not, most people have never been taught to use a budget when doing monthly finances. Without a budget, it’s hard to cut spending (which is the first step to really getting a hold on your expenses). A budget enables you to see where your money needs to go rather than where you think it should go.

J.D. Roth at calls a budget “the most important thing you can do with your money“:

If you don’t write down how you’re going to spend the money you make, it will walk out the door on impulsive purchases. This leads to spending more than you can make, and leads to bad money habits like “90-days, same as cash” financing on stupid things, or ridiculous car loans because you had that new-car itch.

The simplest budget is a list of your incoming cash and outgoing cash. Your goal should be to end the month with more money coming in than going out. There are all sorts of budgeting programs online (which cost money), but there is nothing wrong with a pen and paper budget. Remember that being aware of where your money is going each month is a critical and important step in learning to budget.

When you are budgeting expenses, remember to not include luxuries – at least at first. It’s important to list your expenses in order of importance – so food, gas, mortgage/rent, etc go first, and movies, entertainment, and other luxuries go last.

The best way to budget is to use actual data. Try to gather up your receipts, used checks, bank statements, and using a calaulator, add up what you spend on things like food, gas, take out, pets, home supplies, and others. Once you create your budget, can see where your money has going, and look at it in black and white, you can get an idea of importance.

2. Stop Spending Impulsively. Think First.

This is a simple one, but can be difficult in so many cases or for many people. When something is on sale, or we get an email alert about a new or popular product, or when a friend or family member shows off something new they’ve bought, it is incredibly easy to feel compelled to dip into those finances to go shopping just this one time. In some ways the less you think about the decision, the easier it is to make! But impulse spending is a lot bigger than more think:

  • User Interface Engineering, a firm specializing in web site usability, found that impulse purchases represent 40% of all money spent on e-commerce sites. Their study also showed that users were 3 times more likely to impulse buy online when browsing using categories than using a search bar. Be sure to think about this next time you are browsing around on Amazon or your favorite shopping site.
  • A 2000 study by The Yankee Group found that 75% of survey takers would be motivated by an item on sale for a reduced price.
  • Other studies list free shipping, “cash back”, special financing, and one-day-only sales as motivators for impulse spending.

Be aware that companies love impulse buyers because they equal huge profits. A University of Minnesota publication from the Journal of Food Distribution Research talks amazingly about how supermarkets have done intensive research to intentionally get shoppers to buy on impulse and buy more. It makes sense, but how often do we think about it when we shop?

“Never act on impulse. Plan first. Think it through. Then act.”
? Luc Saint-Cyr

Our point: Before clicking “add to cart”, or literally adding something to your cart at the grocery store, always stop and think things through. Do you really need this? Did you pay your important bills first? Are you prepared for a rainy day? Getting in the habit of thinking before buying will prove to be one of the most helpful and influential things you can do to get a hold on your personal finances.

3. Cut, Cut, Cut. “Do I really need that?”

Asking yourself “do I really need this” is sometimes like asking a child if they are sure they want ice cream instead of dinner, or a dog a treat. Of course the answer is yes! But much like a dog will always say yes to treats, it’s easy to always think “yes, I need this”. Whether you’ve had a bad day and need a pick me up, or just think it’s time to get some new shoes, it’s easy to think about “needing” things.

A great article on talks about balancing needs and wants: “But it is important that you strike a balance between those things that you have to have and the things that you would like to have.” While the main focus of the article is about business spending, that excerpt, and even the article, certainly applies to personal spending.

Check that: “strike a balance between those things that you have to have and the things that you would like to have”. That is powerful sentence, and important. Next time you are shopping, think about it, and think about if you really need that. Think about the stuff in your cart now, think about your money coming in this month and any other expenses you have. More importantly, think about what is back in your home or bedroom.

Do I need this? Do I need this today?” Learn to ask yourself those questions, and think, and you’ll be heading on the road to financial freedom.

4. Look for coupons or rebates.

We aren’t suggesting you need to go so far as to become the next Krazy Coupon Lady, but believe it or not, taking a few minutes to clip or look for coupons can turn into huge savings. Here are a few pointers:

  • Remember to look hard for coupons for things you know you are going to buy, regardless of if they are on sale or not. These may be the items you save the most on.
  • Manufacturers almost always have coupons on their websites. For example, Zyrtec has always offered a $4 off coupon on their allergy pills available for printing on their website. Hair product site Tresemme has an email list; users can receive news and coupons by signing up for the list. Most manufacturers do this.
  • The website is excellent for looking up coupon or promotion codes to use when shopping online.
  • Labels on cans, bottles, and boxes sometimes contain coupons off your next purchase.
  • Most US Mail customers receive coupon packets/booklets each week; these often contain coupons for new products but typically also contain coupons for staple and popular products as well (i.e. personal care products or grocery products).

You may think that it’s a bit much to spend time to clip something out to save only 50 cents, but all of those coupons add up. What if you made it your goal to save at least $5 per week with coupons? That would be $20 a month, or $240 a year. It all adds up!

5. Keep budgeting, thinking, saving – and then try your hardest to put money away – one step at a time.

It can be the hardest thing to save money, but taking smaller steps to find out where your money is going, analyzing your income and expenses, and trying to cut down, think about impulse spending, and save on shopping wherever you can will really add up over time. The goal should be to end up with months where you have money left over, and there you will be tempted to spend. While it’s good to do something nice for yourself or others once in awhile, the feeling of comfort and security that comes with saving money is unparalleled to the comfort of short-term luxuries. Try to put money away, any amount, even if just $20, whenever you can. This way, when your car breaks down, or you have an emergency medical bill, or your water heater breaks – you’ll be prepared, won’t need money to help you get buy, and won’t have to resort to short term inexpensive loans.

Good luck!