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March 4, 2019

15 Ways to Save More Money When You’re Living Paycheck to Paycheck


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Our question of the month comes in from Anonymous … we’ll just call her Jane Dough:

Andy! Help!

We make $120,000 per year, but we spend nearly all of it. We want to get rid of our student loans, but there's just no money left at the end of the month. And retirement … we’re so behind.

We’re married, we have one kid and another on the way. Daycare is crazy expensive. We want to fix our money situation, but don’t know where we can save money.

What can we do to save more money?


Jane, I understand where you are coming from and I sense the frustration in your note. It’s like, “How could we be making all this money and still not be getting ahead?! “


I’m not sure if this makes you feel better, but you’re not alone. According to a Nielsen report in late 2015, one out of every four families in the US making $150,000 or more is living paycheck to paycheck. You are not alone, Jane.

But you’re not looking for comradery … you’re looking for some freedom!

15 Ways to Save More When You've Living Paycheck to Paycheck

Since I don’t know all your financial details, I’ve come up with 15 ideas for you to choose from that may help you. If there’s 3 in there that help you … great! Leave the rest and the other 12 may help the folks who may be reading this right now.

1. Develop a Budget

First things first, it looks like you’re missing some clarity when it comes to your cash. You’re making a great income, but you’re not sure where it’s all going.

It’s time to develop a budget with your spouse so you can take control. This way you can tell your money where to go instead of the other way around.

Nicole and I love Mint. We’ve been using it for almost 7 years. Mint helps us stay on top of our monthly spending, save for our future goals and it also helps us reduce our money fights.

If you’re more into spreadsheets, check out Tiller. They have an automated system that feeds through Excel and Google Sheets. It’s really slick and that company is doing some amazing work.

If you don’t like FinTech, that’s cool. Write down your income and expenses on a piece of paper so you can start getting some transparency with your money. Go through your past checking statements or credit card statements to see where all this money is going!

Whether you like FinTech or just plain old pen and paper … just get it done. This is the first of the 15 steps, but it’s the most important in my opinion.

Related Article: Create Your Budget on Mint in 10 Simple Steps

2. Decrease Your Housing Costs

The largest expense in your budget more than likely is your mortgage or your rent.

Refinance the Mortgage

You may want to see if you’re a candidate for refinancing your mortgage. Nicole and I used LendingTree for our last mortgage. We liked them because they compared rates from multiple lenders on our behalf.

There are closing costs associated with a mortgage refinance. And they aren’t cheap so make sure the savings in your interest rate is worth the refinance costs.

For example, if you save $500 per year with your refinance, but it takes you 6 years to recoup your $3,000 closing costs, does that make sense for your situation? Will you FOR SURE be living in that house 6 years from now? If not, don’t do the refi.

But if you can save $1,000 per year and that cuts it down to 3 years (and you’ll definitely be there for 3 years), then it might make sense to do the refi. You decide what’s right for your situation.

Downsize Your House

If the refinance doesn’t make sense for your situation, you may want to look at downsizing your living situation. Do you own too much house for your life right now? Is your mortgage taking over a LARGE portion of your budget each month?

It’s the least popular option for saving money, but it’s also the most effective for getting some freedom back in your life.

Shop Around for Better Rent


If you’re renting and your monthly bill is killing you, consider shopping around for something that better fits your budget. This may mean a longer commute or a less desirable neighborhood, but drastic times call for drastic measures.

3. Drive a Less Expensive Car

Transportation is usually the second-highest line item in the typical family budget. It is for our family. Even with two paid off cars, our insurance, repairs, gas and oil changes make driving our cars the second most expensive area of our budget.

So how do you make this section of your budget less expensive?

Well, you may need to downsize your car. A nice, reliable used car might just save your budget.

If you’re a two-car household, maybe a compromise is to have one car be your nicer newer one and the other can be your everyday driver that takes the daily commute beating.

4. Shop at a Lower Cost Grocery Store

When Nicole and I went down to a one-income household when our second child came into the world, we had to make some changes in our spending.

One thing we did was we switched from Kroger (it’s one of the larger grocery store chains here in Michigan) to Aldi. This change helped us save around $300 per month on our budget. Yes, that’s $3,600 per year!

The food is great, they still have organic options, but there are a few quirks you have to get used to.

  • You have to return your own shopping cart
  • There's not a ton of signage to show you where everything is located
  • And you have to bag your own groceries

If you can get over those nuances, Aldi might be right for you. If not Aldi, find another lower-cost option.

Related Article: Reduce Your Grocery Bill by 1/3

5. Eat Out at Restaurants Less Often

We love going to restaurants in our family. You don’t have to cook and you don’t have to clean. But if you go out too often, it’s hard to stay healthy and it can lose its excitement level.

Assess your restaurant spending, Jane. Can you trim this back by 50% this month and see how much you save?

6. Work on Eliminating Your Debt

If you have high-interest credit card debt, you need to address this with any extra cash you’re getting. It is so tough to breathe when you’re paying 20% interest to credit card companies each month.

As you start to create some breathing room in your budget, immediately start making extra principal payments on your high-interest debt until it’s gone. And then when your credit card debt is gone, start attacking your next loan with that extra cash.

7. Refinance Your Student Debt

If you have some student loans that don’t qualify for student loan forgiveness, look into refinancing your debt.

I’ve interviewed a few people on the podcast who’ve had some major success with refinancing. And refinancing your student debt is the opposite of refinancing your mortgage. It generally doesn’t cost you a dime.

8. Revaluate the Day Care Situation

You said the daycare costs are killing you. This could be a really important area to adjust especially with another child coming into your life.

Take some time to look at your options. Does your employer offer a Dependent Care FSA?

Here are 25 other options to consider for saving money on daycare.

9. Look at a High Deductible Health Plan

After your child is born, see if your workplace offers a High Deductible Health Plan (HDHP). This may make your monthly premiums for healthcare go down significantly. We made the switch in 2017 and it’s saved us around $2,000 per year.

The catch here is that you’ll have to pay a much higher deductible when you do need medical care (hence the name High Deductible Health Plan). Make sure you have an Emergency Fund of around 3-6 months to cover medical costs with two kids at home.

If you sign up for an HDHP, look into a Health Savings Account (HSA). It’s a great way to save on taxes with your medical expenses.

If your office does offer an HDHP but no HSA (like my workplace), you can still get one. Lively is an excellent partner for that. We’ve been using them for the last year and have put away a lot of money.

Related Article: Why Your Family Needs a Health Savings Account (HSA)

10. Negotiate Your Cable and Cell Phone Bill

Shop around for deals with other cable or cell phone companies. Then call your cable and your cell phone company and ask them if they can match the deals you’re being offered from their competitors. It is much easier for them to retain you as a customer than to earn another one.

Also, ask your HR rep at your office to see if you have any cell phone discounts you’re not taking advantage of. I get an 8% discount with Verizon. It’s not a lot, but it saves us around $100 per year. Worth a 5-minute conversation.

11. Cut the Cord on Cable

If you didn’t get the discount you were looking for with your cable company, consider just canceling your cable subscription altogether. There are so many other more cost-effective options out there for your entertainment needs.

  • Hulu
  • Netflix
  • SlingTV

We cut the cord on cable a few years ago and we don’t really miss it.

12. Automate Your 401k Savings

Once you start creating a little space in your budget, it’s time to feed your retirement machine. Start contributing to your workplace 401k. Perhaps your company matches your contributions as mine does. That’s free money you could be taking advantage of.

I know you said that you’re feeling behind on your retirement and this can be a quick and easy way to get started. Consider low-cost index funds that cover the broader stock market to get started. blooom is an excellent partner for keeping 401k fees low and with selecting appropriate funds.

Father and son on the beach walking

13. Review Your Subscriptions and Memberships

Do you have a gym membership that you don’t really use?

Or an Audible subscription with books stacking up that you don’t read? It may be time to cancel some of these recurring monthly costs that you are not using.

Start with the ones that bring you the least happiness (or simply not using) and work backward. We don’t want to suck all of the joy out of your life especially when you have two little kids at home! That’s a recipe for unnecessary stress.

14. Open a High Yield Savings Account

An easy way to save money is to move your savings from your brick and mortar bank down the street to a high-yield savings account.

We went from PNC Bank where we were making 0.01% interest to Ally Bank where we’re now making 1.6% interest. This simple switch could help you save hundreds per year.

Related Podcast: Interview with Ally Bank and Savings Motivation Tips

15. Do a Home Energy Audit

Call your electric or your natural gas company and ask them how you can save on your monthly bill.

Our electric company did a free audit of our house to point out areas where we may want to add insulation. Also, they gave us around 30 free LED light bulbs. It was awesome! I haven’t changed a lightbulb in like a year.

On another energy efficiency note, we bought a Nest thermostat a couple of years ago. Initially, it’ll cost you some money but Nest says the product pays for itself in two years. If you plan on living in your house for longer than two years like us, it’s a good investment.

One nice side effect is that our Nest has reduced fights about the temperature in our house. I was always turning it down, Nicole was always turning it up and now it’s set perfectly for our lives. Fewer fights and a lower bill … thanks, Nest!

Okay, we went over 15 areas where can save, Jane!

I know all of these won’t fit your situation perfectly, but hopefully, you can get a few saving nuggets out of this and create some breathing room for your young family.

15 Ways To Save Money When You're Living Paycheck to Paycheck


Marriage, Kids and Money, Andy Hill

Money Master of the Week

Michael, his wife and their little baby just became DEBT FREE!

Michael is Debt Free

In 3 years and 4 months, they paid off $69,084.83!  This includes both of their student loans, credit cards, and cars!  They also cash flowed having a baby and some unexpected medical expenses for her.

They give major thanks for their debt freedom success to Dave Ramsey and his book the Total Money Makeover. After all, Dave is the debt crushing master!

Now Michael and his wife are moving on to building up a healthy emergency fund to support their growing young family.

Michael is our Money Master of the Week!

Share Your Wins

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If you have a financial victory you want to share on this show, please leave me a voicemail (or an email) and include the following:

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  • How you did it
  • If/How you celebrated
  • Your financial plans for the future

Your story will inspire others to save more, make more and plan for their family’s future.

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I truly appreciate the support everyone!


I’d love to hear from you!

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Carpe Diem Quote

“If you would be wealthy, think of saving as well as getting.”

–Benjamin Franklin

What are other ways you can save?

Please let us know in the comments below.


Marriage, Kids and Money, Andy Hill

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


  • These are all excellent points. One thing that I think applies to many people living paycheck to paycheck is that they are unwilling to make short-term sacrifices to gain long-term security. As your post points out, cutting back across several things in your life will save you more money at the end of the month which in turn helps you save money. Unfortunately, so many people can’t reel in their spending and live beyond their means.

    • That can true for sure. There are a lot of people out there also just trying to make ends meet. Some of these small changes could make a world of a difference.

  • Andy, Great podcast. I wish I had had such a thing when we had a young family. I still enjoy listening even though I’m an empty nester.

    I think you missed a very important 16th way to save money and that is to learn to cook! And I don’t mean picking up the expensive, pre-made food at the grocery store that is just adding to the corporate bottom line. Having confidence in the kitchen can save so much money over the years. Not just in grocery bills and less wasted food, but also in entertainment costs. We have saved countless dollars by being able to share meals with friends (whether pot luck or a true dinner party). We’ve had soup nights for years with one of the clubs we belong to…we put up soup and everyone brings an app, bread or dessert, plus their spoon and bowl. A true recipe for laughs.

    Plus, you get to teach your children a true life skill. They started with easy things like mixing a vinaigrette, moved on to baking, and even ended up doing Foreign Cookery 4-H projects. Most of our daughters’ friends have no idea what to do in the kitchen and are well on their way to indebtedness when they could save so much money learning their way around a frying pan. I think our college-bound daughter paid us the highest compliment possible when she was asked by an adult friend what was the biggest thing she learned from her parents?: “They taught me to cook”.

    Start small, maybe with another couple, and learn as you go. Even if something fails, you can always blame it on the recipe.

    Bon Appetit!

    • Such a good point! And I’m so glad you mentioned that.

      We love making food at home and it helps us to stay healthier too.

      It’s a lot of fun as well!


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Marriage Kids and Money Podcast

About Marriage Kids & Money

The Marriage Kids and Money Podcast is dedicated to helping young families build wealth and happiness.

With over 400 episodes and counting, we share interviews with wealthy families, award-winning authors, and personal finance experts to help you find your version of family financial independence.

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