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Financial Wellness

How to Save Money While Living Paycheck to Paycheck

By Giuseppe H. Robalino, March 29, 2021 11 min read

Do you often find yourself struggling to make ends meet? Are you coming up short a few days before payday? Maybe you’ve given up on saving and have started to turn to credit cards or even payday loans. While it may not be easy, it is possible to save money all while living paycheck to paycheck – it’s just going to take some cutting back and a bit of motivation. 

Easy Ways to Cut Back on Spending

The first step in saving is having more money to save – when was the last time you tracked your spending week over week to figure out where your paycheck keeps going? Start by cutting back on your spending.

First, remember that there is a difference between being frugal and being cheap. 

Being frugal means that you focus on maximizing value with your spending. Being cheap means that you only focus on getting the lowest price possible at the expense of your own needs and reasonable comfort. Sometimes, being “cheap” is not the best way to save money, because it may result in you spending more money over time. 

For example, if you purchase an old, run-down car for $1,000, that car might require a couple thousand dollars of maintenance each year. On the other hand, if you frugally purchased a slightly newer car for $10,000 with a monthly payment of a few hundred dollars each month, you might not have to pay as much in maintenance costs, and the car would likely last you much longer.

A few easy ways to cut back on spending while being frugal but not cheap are meal prepping, dining in, couponing, discount shopping, and downsizing.

Eating at Home & Meal Prepping

The average American household spends over $3,000 each year dining out. Even if you don’t think you spend that much on restaurant bills, it adds up quickly. Let’s consider that the average Starbucks coffee costs more than $3 and that the average fast-food combo meal ranges from $4-$7. Seemingly small, but when you do the math, that daily coffee and takeout for lunch and/or dinner can total over $3,000 each year. 

A good way to curb this expense is by meal prepping. Preparing food ahead of time for the week will prevent you from buying takeout during your lunch break or on your way home from work. Practice self-discipline. Only allow yourself to eat out a fixed number of times per month (or per week, to start).

Couponing and Discount Shopping

Couponing and discount shopping can go a long way. If you’re on a budget, you should avoid paying full price whenever possible. It might take a few minutes longer to do your shopping, but it will be well worth it. Here are some couponing and discount shopping tips:

  • Be smart about sales; not every discount is a good deal once you do the math. For example, “buy ten cans and get one free” is only a 10% savings, and you’d end up spending $10 where you could have spent $1. Don’t feel pressured to use every coupon, either. It doesn’t always make sense to buy an item just because you have a coupon for $1 off. The money spent on that discounted item could be put towards something else that you need more.
  • Let go of brand loyalty and be prepared to visit different stores in your area to learn about which has the most competitive prices and what the sale schedules are. Ask about store policies regarding price matching and honoring competitor coupons. Take advantage of rebates and download couponing and cashback apps like Ibotta.
  • Be wary of warehouse stores. Their layouts and product displays are designed to spur impulse buys as you make your way to the heavily discounted items in the back or lower shelves. And, once more, do the math. Not all memberships are worth the price. Know your breakeven point (how much you have to spend before your membership pays off) before signing up.


Do you need all that space? Does your home location make sense? Moving can be a pain, but when you do the math on how much you could save by moving somewhere else, it may be worth it. However, don’t forget to look at all the possible outcomes. Will moving somewhere with slightly cheaper rent lead you to spend more on gas and utilities? 

In many cities, renting is becoming more expensive than paying a mortgage. Credit scores and interest rates aside, the biggest barrier is making that down payment. Saving for a down payment may not be easy, but it is not impossible, and it can result in your monthly housing expenses decreasing by a few hundred dollars. One way to start is by opening a savings account exclusively for a down payment. First-time homebuyer loans and programs can also help you decrease your down payment amount.

Regardless of whether you rent or own your property, you may also want to consider getting a roommate or two. Splitting the cost of rent and utilities can make a huge difference for your wallet – you just have to decide if it is worth the hassle for you.

Minimizing Subscriptions

How much are you spending on meal delivery? Music and movie streaming? Cable/satellite? Unlimited data on your phone plan? Tally up your subscriptions and rank their importance, then cut out the services you don’t need. For example, Netflix, Hulu, and Disney Plus combined will still cost less than your cable bill – do you need all four? Then, look at which package you are currently paying for – do you really need to pay a few extra dollars each month just to avoid watching ads?

Reducing Transportation Expenses

Find out how much your car is costing you in maintenance and monthly payments each year. Compare that against the down payment for a new car – it might actually make more sense to invest in a new vehicle rather than pouring money into your old one. If that’s the case, make sure you weigh your long-term costs when purchasing a new car. It might be better to pick the newer model that is going to cost an extra $50 per month but require less maintenance.

On the other hand, though it may be less convenient, public transportation can be a much cheaper option than owning a car. Even if you do own your car, it can be cheaper to ride the bus to work than to pay for gas every week. 

If you forgo car ownership, remember that you’ll be saving not only on the cost of buying your car and on gas, but also on car maintenance (oil changes, tune-ups, fixes) and mandatory insurance.

Keeping a Budget While Living Paycheck to Paycheck

The next step towards achieving financial wellness even while living paycheck to paycheck is learning how to keep a budget. We put together a simple budget tracker for you. 

Use this to track your spending for three months without changing any habits. At the end of those three months, take a hard, honest look and see where you can cut the fat. Make sure you are working off of your net-of-tax income. 

One way to force yourself to stick to your budget is to pay for everything with cash. Keep cash in envelopes for each variable expense budget category. Don’t spend more than is in each envelope, but feel free to make adjustments month to month. Paying for purchases with cash can force you to stay within your budget.

Controlling Impulse Spending with the 30-Day Rule

Impulse spending is one of the biggest ways that you might accidentally neglect your budget. Impulse buying is when you go into Target to buy one thing and walk out with twelve. Some stores are great at marketing and can convince people to buy things they don’t need.

The key is to take a breather and ask yourself, “do I really need this? Can I reuse it? Is there a cheaper option?” 

You can also try using the 30-day rule. This means you “spend” the amount you were going to pay for that item by depositing it in your savings account instead. If after 30 days you still want the item, only then you can withdraw the funds to get it.

Saving Money on Minimum Wage

If you don’t have a savings account, now is the time to open one. Not only is your extra money safer in a bank than under your mattress, but saving accounts also come with a host of benefits, such as interest and member perks. Start here with our guide on choosing a bank.

Using a Fee-Free Bank

Believe it or not, fee-free banks exist. And, best of all, many are available with no or $0.01 minimum balance requirements. 

Fee-free refers to no monthly maintenance fees or overdraft fees. These types of accounts are often available via a website or an app, so you don’t even have to go into a physical bank to sign up. Digital-only banks can be cheaper because the banks save a lot of money by not having to pay for their branch locations.

Once you have a bank account, you can also sign up for direct deposit with your employer. This means that your employer can directly deposit your wages into your checking account on payday, and you no longer have to cash checks. 

Treat Saving Like a Monthly Bill

Set up an auto-deposit to a savings account scheduled for the day your paycheck hits. If you force yourself to save in this way (the same way you force yourself to pay your bills each month), you’ll realize it adds up fast. Saving just $100 per month will give you $1,200 annually, plus interest! 

Minimizing Debt

While it can be tempting to put everything on your credit cards or take out loans when you’re having a hard time making it from paycheck to paycheck, these methods can put you in a deeper hole than you were in when you started. 

If you currently have multiple streams of debt (short-term loans, credit card debt, etc.), try to at least consolidate your debt into one account. In other words, start small! Start by paying off one credit card or one loan at a time. If you make paying off your debts a priority, soon you won’t need to take out more loans or use more credit and the cycle will be over!

Plus, focusing on your debt will help you lift your credit score, which will make it much easier for you to make big purchases such as a home or a car.

Keep in mind that it is better to use Rain to access your wages early than to take out another loan. Rain is currently available to employees at businesses that have signed up for it.

Saving Money by Avoiding Loans

One of the quickest ways to spend money without realizing it is signing up for short-term loans (like payday loans). Payday lenders are good at advertising. Their signs say “Get $500 today” and “no initial fees,” but what you don’t realize is that when all is said and done, the $500 cash you can get today can actually cost you over $350 in fees. That means that you would get the $500 today but have to pay over $800 back.

Rain offers an alternative. If your employer has signed up for Rain, you can collect some of your wages early instead of having to wait until payday. That means that instead of paying over $350 to get $500, you might be able to withdraw $500 from Rain and only have to pay a fee of a few dollars. 

If you are interested in using Rain but your employer has not signed up yet, send them the link to this website and ask them to fill out the “let’s chat” form so we can get them started (it is free for your employer)!

If you have a Rain account or need help setting up your Rain account, please text or call us at 424-369-7246. You can also email care@rain.us with questions about your account.

Tags:Budgeting, Financial Wellness, Paycheck to Paycheck, Saving

About the Author

Giuseppe H. RobalinoFinancial Advisor & Copywriter

Giuseppe is a financial advisory and investment management professional with work experience serving mass market and ultra-high net worth investors. He has worked for independent investment advisory firms as well as an international private bank and trust company, supporting teams managing over $700 million within a firm responsible for over $100 billion of client assets. He graduated with a degree in business administration from the University of Southern California, during which time he also studied at the London School of Economics. Giuseppe enjoys educating others and is an avid proponent of financial literacy as the single most impactful economic empowerment tools. On his free time, Giuseppe mentors current USC students on their professional development.

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