How to Save Money When You Are Broke

Saving money is almost impossible when you feel broke. Here are a few tips on how to save money consistenly.

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Adam Moelis
Jul 31, 2022
6 min read

It’s no secret that the events of the last few years have created a lot of economic instability for Americans. The combination of sky demands, supply shortages, and record levels of inflation have made a recession virtually inevitable. Many Americans are struggling right now, and it doesn’t appear like it will be getting easier anytime soon.

Being broke and living paycheck to paycheck can be very hard. It’s going to take even more sacrifice and strategic financial planning. While your wallet might be tight for the foreseeable future, you can still have fun and enjoy your life. You’ll just need to be a little more calculated with your finances. 

16 Ways To Save Money While Being Broke

  1. Track your money
  2. Calculate your budget
  3. Open another savings account
  4. Eliminate unnecessary expenses
  5. Reduce housing and transportation costs
  6. Meal plan before grocery shopping
  7. Find affordable ways to entertain yourself
  8. Use coupons whenever possible
  9. Check your insurance policies
  10. Sell unused items
  11. Buy used items
  12. Increase your income
  13. Avoid late fees at all costs
  14. Don’t take out payday loans
  15. Be wary of credit cards
  16. Automate savings

Looking at your bank account when you’re broke and have bills due can be physically painful—being broke results in a special type of stress that creates various physical and mental ailments. It’s the real-life equivalent of playing a game on the hardest difficulty setting.

While there is no denying that saving when you’re broke is going to be tough, it won’t be impossible. You’ll need to embrace the right mindset and adopt a few financial planning strategies, but you can save money in your current state.

The following is a list of the 16 ways you can save money despite being broke. You’ll probably need to utilize several of them for quite some time. But with enough patience and determination, you can eventually pull yourself out from under your current financial troubles and lead a more economically stable life.

1. Track Your Money

The first thing that you need to do is track your money and find out where it’s going. For the next 30 days, you should pay close attention to your money and track every cent you receive or spend. It might sound like a tedious task, but it will be extremely important for the next entries on this list.

2. Calculate Your Budget

Once you know how much money you make and spend in a month, you can work on calculating your current budget. The first step is determining which expenses are essential and which are unnecessary. Actual expenses would be your rent, utilities, groceries, medication, and bills for things you need. 

Unnecessary expenses would be clothes, entertainment, memberships, video games, and other things you want. Hopefully, you’re already budgeting to avoid a negative balance each month's end.

3. Open Another Savings Account

The next step is the last easy one because things will start getting much more difficult from here. Even if you already have a savings account, opening up at least one more is a good idea. 

You’ll need a place to stash your extra savings, and a bonus savings account can help you track your progress and prevent any misspending. Ideally, you should look for one that offers the best incentives, but more later.   

4. Eliminate Unnecessary Expenses

Here is where you’re going to have to start making painful sacrifices. The first and generally most effective budget cuts come when eliminating unnecessary expenses. It’s going to be very difficult, but the more you cut out, the more you’ll save, and the faster you’ll be financially stable. 

Eating out at restaurants, shopping sprees, and non-essential memberships will all have to go. If you aren’t required to live, you should consider getting rid of it. 

5. Reduce Housing and Transportation Costs

The chances are that your budget's two most expensive items are your housing and transportation costs. Mortgage/rent payments are almost always the most expensive bill you pay each month, so anything you can do to lower the price will help. 

You could downsize to a place with a smaller monthly payment or split the costs with a roommate. Car payments are the second-highest cost, and reducing them could save you money. 

If you are moving anyway, you should look for a place closer to your job. It might eliminate the need for a car or reduce the gas you buy weekly. 

Alternatively, you could try to find a cheaper vehicle, carpool, or avoid using your car when possible. Remember that every little bit that you save will add up eventually.  

6. Meal Plan Before Grocery Shopping

Eating food is one of the most basic things you need to do to live. Cutting restaurants from your budget will mean you’re doing a lot of cooking. 

You can save a lot of money by planning every meal, switching from name-brand items, and buying items in bulk. For an extra bit of saving, you can start a garden so you can grow all your fruits and vegetables. 

7. Find Affordable Ways To Entertain Yourself

Staying entertained isn’t just good for your mental health. It will help you to avoid getting bored and spending money. The problem is that entertainment quickly gets expensive

You’ll need to get creative and find a few ways to keep yourself entertained for very little cost. The best option would be to get a library card so that you can spend more time reading and have free access to other resources.

Later you could also exercise, learn how to play a (cheap) instrument, or create a journal of your thoughts.  

8. Use Coupons Whenever Possible

Almost every business in operation offers various discounts, promotions, and coupons to attract new customers. There is no shame in seizing these savings and cutting your costs

The trick is to make sure that it’s something that falls under the “needs” category of your expenses and not the “wants” category. A promotion that discounts essential items like breakfast cereal, toilet paper, or tires is worth the trouble. 

One offering discounts on luxury items like a big screen TV, jewelry, or shoes is not. 

9. Check Your Insurance Policies

Health insurance, car insurance, renter’s/mortgage insurance and life insurance are a few of the most common examples. No matter how many of these insurances you have, you can save some significant money by shopping around and comparing rates

Insurance companies are just like any other business and are always looking to attract new clientele. There are always offers being promoted that can potentially cut down on your costs. 

10. Sell Unused Items

If you look around your home, there are bound to be several things you don’t use. You can make quite a bit of quick cash by selling off old junk that is just collecting dust and cluttering up the place. 

You can try a yard sale or local flea market, but it might be best to post these items online so you can reach a much wider audience. Remember only to sell things you don’t need or aren’t using. Selling your dishes won’t do any good since you’ll need them again soon.  

11. Buy Used Items

Buying used items is on the opposite end of the spectrum and can help you reduce costs. There is nothing wrong with buying a pair of pants someone has worn before you. You can wash them as often as you want to feel comfortable, which will still be significantly cheaper than buying a new pair. 

The same goes for many other items, including electronics, tools, cookware, and furniture. You can even combine items on this list to cut costs further. For example, buying a used instrument is an excellent way to keep yourself entertained for cheap.  

12. Increase Your Income

Now that you’ve eliminated as many reasonable expenses as possible, it’s time to work on increasing your income. You can ask for overtime at your current job, apply for a promotion, or ask for a raise. 

If none of these are available, then you should start looking for another job that offers a higher salary. If you want to stay at your current job, you could always pick up a part-time job on the weekends or monetize a side hustle

Regardless of whatever option you choose, you must not increase your expenses. You’ll be making more money and working harder, so there will be a temptation to spend. But you must not give in until you’ve reached your savings goal.  

13. Avoid Late Fees at All Costs

One of the key things to avoid whenever possible is late payments. Making a late payment isn’t just harmful to your credit; they also typically come with severe fees and penalties. 

It would be a shame to work so hard and sacrifice so much just to see all the profits evaporate because you forgot to pay your gas bill on time. 

14. Don’t Take Out Payday Loans

There will certainly be times when you don’t have enough money to cover your bills on time. Avoiding late fees and paying your bills on time is very important, but not so important that you should take out a payday loan. 

These types of loans are highly predatory and cost you way more than they’re worth. Try asking friends and family for a temporary loan to help you cover your expenses. Pretty much anything legal is better than taking out a payday loan.

15. Be Wary of Credit Cards

Credit cards can be an effective way to build up your credit and help out when you get into a pinch. You can keep your bills paid on time to avoid late fees without taking out a risky payday loan. 

However, you should be careful when using your credit cards. You might not have to repay the balance for a month, but the interest rates of most credit cards are generally pretty steep

Make sure you’re only using credit cards when you know you’ll have the money to pay off the balance soon.

16. Automate Savings

After completing as many applicable steps as possible, you should have a noticeable amount of extra money leftover each month. The key to saving is to set it aside and forget about it. 

One of the easiest ways to do this is to automate your savings and have money automatically transferred to your savings account periodically. Make sure the money is accounted for and expendable, so you don’t accidentally fall behind on bills. 

You can increase the amount over time when you further cut back on expenses or increase your income.

Being Broke Can Be a Temporary Setback

It will not be easy to always stick to the tips listed above. However, the longer you can do it, the more money you’ll be able to save. With enough time, you could eventually quit being broke and open up more opportunities for yourself. On the other hand, you could get a little lucky and take a massive shortcut.

By opening up a savings account with Yotta, you’ll be incentivized to save as much money as possible. The way it works is pretty simple: the more money you have in your Yotta account, the more tickets you’ll receive for the weekly sweepstakes. Depending on how many numbers match at the end of the week, you could win $5,000, a new Tesla Model 3, or the $10 million grand prize.

Download Yotta today to open up your bonus savings account and get started. With a lot of hard work and a little luck, you could go from being broke to being a millionaire overnight.

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