How to Increase Savings when Living Paycheck to Paycheck

The economy is in crisis and most, if not all, of us are feeling the cash crunch on a personal level. We all know we should have a cushion in our savings account that would help us survive through a job loss, emergency or other financial setback, but if you are living from paycheck to paycheck this may seem impossible.

Now, more than ever, it is imperative that you take steps to increase the amount of money you have in savings and to create that cushion - particularly for those living paycheck to paycheck.

I know it's hard. I know there isn't a lot of extra cash hanging around just waiting to be stashed away for a rainy day. And, I know that putting a couple of dollars in your savings account here and there doesn't seem like it will make much of a difference. But, small amounts add up and just imagine how much better you will feel when you have at least a small amount in savings. Once it's in your savings account, don't touch the money unless you really have to and you will see it grow into a financial cushion before you know it!

Every step towards a positive goal is a step in the right direction. Use these fifteen small steps you can take to increase your savings - even while living paycheck to paycheck - and you will find that increasing your wealth (and decreasing financial stress) is possible even on a tight budget.

1. Open a savings account with no minimum balance and no transaction limit - The first step in saving money when living paycheck to paycheck is to open a savings account. Even if you only open it with $1 (which is what my partner and I did) this is the first, and possibly most important, step to saving money while living on a budget.
2. Sign up for online banking so it's easy to make small transfers from checking to savings - The second step to increasing your savings while living on a tight budget is to sign up for online banking. This will allow you to make quick and easy small transactions from your checking account to your savings account.
3. Put leftover money from each paycheck in your savings account - Even if you only have $5 left after you have paid your bills and made all of your necessary purchases, transfer that $5 into your savings account. If you are used to living paycheck to paycheck anyways, this will not have a huge impact on your lifestyle and you will see the balance of your savings account increase on a regular basis.
4. Take advantage of rounding up savings programs or do it yourself - If you bank with a financial institution that offers rounding up savings programs, take advantage of this service. If your bank does not offer a rounding up savings program, you can also do it yourself quickly and easily online. All you have to do is round up your purchases to the next dollar amount and transfer the difference from your checking account to your savings account. For example, if you write a check or use your debit card for a purchase that costs $7.93, transfer .07 cents to your savings account. You are not going to notice the .07 cents and you will be pleasantly surprised at how quickly these tiny transactions can add up to increased money in your savings account.
5. Do odd jobs, gigs or articles for extra cash and bank the money - If you already have a steady paycheck that you use for living expenses, supplement that income with odd jobs, gigs, article writing or other small income opportunities. You can check out your local Craig's List for gigs and odd jobs, post an ad for do walking services or passing out flyers, or write an occasional article for websites like Associated Content. A gig off of Craig's List might only pay $20 and you might only get $4 or $5 for an article, but all of this is extra money that you didn't have before. Take the money that you earn as extra income and put it directly in your savings account.
6. Sell something you don't need and put the money in savings - Scour the house, garage, storage unit or wherever you keep your stuff and find items that you longer use, need or want. Sell them on Craig's List, eBay or through free classified ads and put this extra cash in savings. Those of us who have lived paycheck to paycheck have probably done this before, but the key here is to put the money in your savings account rather than spending it.
7. Have a garage sale and put the money in your savings account - If you find a treasure trove of unneeded items while you are looking for things to sell, have a garage sale and rid yourself of the junk while making a significant chunk of change to deposit in your savings account.
8. Pay bills online and bank the savings from not buying stamps - Paying bills online is easy, convenient and eco-friendly, but take it a step further and use it to increase your savings account balance as well. For every bill you pay online, put the money you are saving on stamps in your savings account. It's a small amount and an expense you are used to paying, so you won't even notice that it's gone.
9. Buy store brands or cheaper versions of products you use and bank the difference - If you are living on a budget, you are probably used to doing this anyways, so why not use this money saving idea to increase your savings by depositing the difference in price (the amount you are saving) into your savings account?
10. Pass on one purchase of something you want (but don't need) and put that money in savings - Whether it's a dinner out or yet another handbag, if you pass on a purchase that is something that you want, but don't need, reward yourself by transferring the money that you would have spent on the indulgence from your checking account to your savings account. By passing on just one purchase each month, you will soon have enough to buy something that you need or that you really want.
11. Start a change jar - This one seems like a no-brainer, but there are still lots of folks out there who don't have a change jar. If you purchase things with cash, then you are bound to have change in your pocket or your coin purse at the end of the day. Toss it into a designated container and watch your loose change add up to a significant amount of cash to add to your savings.
12. Find ways to save on bills, and then deposit the difference in savings - Could you lower your cell phone plan to a cheaper plan with fewer minutes? Would switching to a different Internet Service Provider save you a few dollars each month? Do you really need all those cable channels? Find ways to lower your bills each month - even by just a few dollars - and then (since you are already used to spending that money) deposit the difference into your savings account each month. The easiest way to remember to do this is to transfer the difference into your savings account while you are online paying that bill anyways.
13. When stuff gets paid off, keep making the payment...to yourself - This is one of the biggest ways to see significant increases in your savings account balance. When you pay off your car, your credit card or any other debt you already have built into your budget, keep the habit of paying that bill just to your savings account instead of your creditor. If your $200 per month car payment was due on the 5^th of each month, then once it's paid off, start transferring $200 from checking to savings on the 5^th of each month. Keep in mind that if you have other debt, you might be better served to allocate part of this to paying off your debt and part to savings, rather than all to savings.
14. Give up a vice and bank the money you spend on it - Have you stopped smoking, cut back on trips to the coffee shop or given up some other little luxury that has been costing you lots of cash? If so, figure out how much you typically spent on your particular vice and start putting that money in your savings account instead.
15. Recycle at a recycling center instead of curbside bins - Curbside recycling bins are an easy, convenient way to recycle everything from cardboard and cans to glass and plastics, but if you are short on cash and could use a boost in your savings, take your recyclables to a recycling center that will pay you for them and then deposit the extra money in your savings account.