I read the article of saving, and i like the answer but it miss some points.e.g if i earn 1700 and have a baby on way. I am still living with my in laws as i am new in this country. So in my estimate, if i get a house that is minimum of 500. and bill of groceries (just estimate) is 200 and bill (all together), comes 300 (assuming), and 200 is for my wife. Yet, i have to get a car which i don't know how much and kid on way. So adding it all, almost leave me with nothing and i want to save as i need to get a home on mortgage, the down payment or just saving for old age seems impossible now, as i totally run out of money before month ends. How should i move with saving and don't end up broke, just before end of month?

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The answer is, there are a lot of answers! It always seems so daunting to start saving when you're living paycheck to paycheck and anticipate more bills on the way (kids are expensive!!). Start small, and make it automatic if you can. If you can take $25 out of every paycheck and put it into a savings account, and do this automatically using your bank's Bill Pay system, that will go a long way. It's about setting up a new habit for yourself, and increasing as you can. One way I've heard it phrased is "Pay yourself first".

Don't set unrealistic expectations for yourself, either. You need to start building a savings account to cover emergencies, not just future purchases. If something happens and you can't get a paycheck for a week, a month, 2 months, how will you pay your bills? Set up a savings account just for that purpose and don't touch it unless it's a true emergency. There are several banks out there that will let you set up multiple savings accounts and mark them for specific purposes, like CapitalOne's 360 accounts. Set one up for the emergency account that gets your automatic per-paycheck deposit, then set up another one for "fun money" or "new home fund" or whatever else you want to save up for.

Starting the savings process is hard, no doubt about it. You need to learn how to budget with the money you have after "paying yourself first". But the important part is to stick with it. Consider your savings account as another "mandatory" utility. You have to pay it $25/mo or risk...I don't know...a smack on the back of the head.

If you wait until the end of the month to see what you have left after everything else, you'll find you don't have anything left. If you can set it up through your bank so when you get your paycheck it automatically puts $25 into a savings account, then you'll never have that $25 burning a hole in your pocket. If your paychecks aren't direct deposit, and you're physically cashing them when you receive them, then tell the bank teller to put $25 into your savings account.

You can do it! Make sure your wife is on board and you communicate the importance of setting up a savings account and work together to make it happen. Be patient, and realize that $25 may seem like a trivial amount to put away now, but after 24 paychecks (1 year depending on pay schedule), that's $600! (Plus interest but rates are too low now to worth noting that).

  • 2
    Also, remember that you're not alone in feeling like this! My wife and I were living paycheck to paycheck (and still sorta are) and had very little in the way of savings. Mortgage, kid, medical expense debt, and much more. I only recently adopted the advice I suggested above, and already it's made a huge difference. Once we started automatically doing it, and budgeting the rest of the month accordingly, we found that we really did have the money to spare, we just never knew it!
    – BobbyScon
    Commented Aug 2, 2015 at 22:29
  • I have heard, bank cut tax over saving accounts too. yikes!
    – localhost
    Commented Aug 2, 2015 at 22:29
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    I'm not entirely sure what you mean by that. Interest earned in savings accounts is taxable, but you'll be earning such little interest at first it won't matter, and your tax bracket will pretty much negate it.
    – BobbyScon
    Commented Aug 2, 2015 at 22:32
  • +1 Also, be careful to distinguish needs from wants. To survive you NEED food, some protection from the elements like clothing and shelter, maybe medical care. Everything beyond that is some degree of luxury. And even there, there are almost always ways to cut. Like I spend about $150 per person per month on food for my family. If my budget was strained, I could easily cut that by buying more hamburgers and hot dogs and less beef, more staples and less microwavable foods, etc. You can always cut out expensive entertainment. Etc.
    – Jay
    Commented Aug 3, 2015 at 18:54

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