How to Save When You Live Paycheck to Paycheck

profile Current Team  |  May 31, 2022

Even if you have to live paycheck to paycheck, you can build for the future. Create a budget, put money aside into a savings program (like Current’s Saving Pods), review your bills and insurance policies to consolidate and qualify for discounts, and you will create a path to getting out of the paycheck to paycheck cycle.

Perhaps more than any other time in history, a majority of Americans are living paycheck to paycheck. While this is largely due to the economic impacts of the COVID-19 pandemic, there are many other reasons for this.

Whatever describes your situation, it is normal to feel like you have no financial options when you’re simply trying to make ends meet. However, there are some simple steps you can take to start the process of breaking out of the cycle.

Living by a Budget

One way of doing this is to create an actual budget — a written, detailed list of your necessities (like rent, food, utilities, medical expenses, and transportation) and then a list of your non-essential items (discretionary spending). Current’s money management tools can help you create monthly budgets for specific spending categories, allowing you to have insight into your spending habits.

If you’re living on a paycheck-to-paycheck budget, you have likely already cut down on any luxuries. But creating a budget helps you make a very clear inventory of further areas where you can control your spending. For example, while “food” is generally an essential budgetary item, “food” can also mean shopping at a less expensive grocery store or ordering online less (and thereby not having to pay delivery charges as well).

Other ideas from creating a budget might mean cutting cable and other subscriptions, and instead enjoying things for free on YouTube or through your local library system.

You might also consider how you can add to your budget, like taking on a side gig. Driving for a rideshare or a food delivery service is a popular option. Set up your budget so that any money you get goes directly into your savings account.

Build Savings

This leads to the next thing you can do to save when you live paycheck to paycheck: build savings. You should absolutely have a designated program for savings to get out of the paycheck-to-paycheck cycle. Talk to your bank or financial institution about ways to easily save money automatically. With Current, you can transfer funds into your Savings Pods and enable the Boost feature to start earning funds daily at a Boost rate of up to 4.00% annually. This makes it easy to save for big purchases and achieve financial goals. For more information, please refer to the Current Boost Terms and Conditions.

When you have your savings plan established, you can set up an automatic monthly transfer from your checking account. Look at your budget and decide how much of your paycheck you can afford to lock away in your savings. It could be as little as $25, but the point is to consistently add to your savings and plan for the future. Using round-ups with Current allows you to automatically allocate funds into your Savings Pod on specific purchases without having to think about it, making it easier to set aside money.

You can also manually move money from your checking account into your savings, depending on how much money you need for a given month.

Bills and Insurance Policies

Your bills are likely a big reason why you’re in the situation of living paycheck to paycheck, so take stock of all of them: what you’re paying for utilities, credit cards, insurance, cable, medical, and other expenses. Cut back (or cut out) anything that you can do without.

For things like gas and electricity, you might be able to negotiate your rate. Your utility company might be able to do a free energy audit, where an inspector surveys your home and gives you ideas on how you can be more energy- and cost-efficient.

Take a look at all your insurance policies. When they are due for renewal, look at other providers and see if they offer better rates.

Some insurance companies allow customers to bundle their policies (combining car and renters’ insurance, for example), and you might be eligible for a discount if you have two or more policies with the same provider.

Is your car usage actually justifying what you pay for auto insurance? If you can demonstrate that you don’t drive much (and you take public transportation), your provider might offer you a lower rate for being lower risk. Younger drivers might qualify for discounts if they demonstrate good academic skills and responsible behavior.

Even if you do all the right things, it takes time and energy to get out of the paycheck-to-paycheck budget. For all the budgeting and cost-cutting, it could be years until you start to see the benefits, but the benefits will come. In small ways, and then in notable ways, you’ll start to see your savings grow, your credit recover, and your opportunities for long-term investments develop.

Start by simply putting some money in your savings account, and taking inventory of your lifestyle habits and your needs. Stick to the plan, don’t be afraid to look for help, and you will eventually break out of the cycle.


Nearly 40 Percent of Americans With Annual Incomes Over $100,000 Live Paycheck-to-paycheck. (June 2021). PR Newswire.

How to Create a Budget in 5 Steps. (January 2021). CNBC.

What Is a Savings Account? (August 2021). TIME.

7 Easy and Free Ways to Save Money on Your Gas, Electric and Water Bills Now. (September 2021). CNET.
How Bundling Auto and Home Insurance Saves Money. (October 2021). Forbes.

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