How to Start Saving Money When You're Broke

Person on a tight budget saving coins into an emergency fund jar at home

Let’s be real: saving money when you’re broke sounds impossible. When your paycheck barely covers rent, groceries, and bills, how are you supposed to tuck anything away for the future? But here’s the truth: even if your finances are tight, you can learn how to save money when you're broke—and every small step counts.

This guide is for beginners who feel like they’re living paycheck to paycheck but want to take control of their financial future. We'll walk through simple, actionable steps to help you start saving, even on a tight budget.

Why Saving Is Still Possible (and Necessary) When You're Broke

When you're broke, it's easy to think saving is a luxury for "later." But building the habit of saving now—even with small amounts—lays the foundation for long-term financial stability. Emergencies will happen. Bills can surprise you. Having even $100 set aside can prevent you from going into debt when life throws a curveball.

Saving money also gives you freedom and peace of mind. It's not just about having cash—it's about having options. With savings, you can walk away from a bad job, handle a medical emergency, or afford a move to a better apartment. It’s your buffer against chaos.

Step 1: Know Where Your Money Is Going

The first step to learning how to save money when you're broke is to track your spending. You can't cut back if you don't know where your money is going. Use a free budgeting app like Mint, YNAB, or even just your Notes app. Track every dollar you spend for at least a week or two.

You might be surprised how much goes to little things—$10 on snacks here, $20 on impulse buys there. That’s good news because it means there’s room to cut back without sacrificing the essentials.

Step 2: Create a Bare-Bones Budget

Once you’ve tracked your spending, it’s time to make a bare-bones budget. This kind of budget focuses only on essential expenses:

Rent or mortgage
Utilities
Groceries
Transportation
Minimum debt payments

Cut out or pause non-essentials like streaming services, eating out, or shopping for fun. This doesn’t mean you’re giving up everything forever. It just means you're prioritizing savings while you stabilize your finances.

If you’ve never built a budget before, don’t worry—it doesn’t have to be complicated. The goal is simply to be intentional with your money.

Step 3: Automate Tiny Savings

You don’t need to save hundreds right away. If all you can spare is $5 a week, that’s okay. The key is consistency. Set up an automatic transfer to a savings account every payday, even if it's just a few dollars.

Check out our guide on the best savings account for beginners to make sure your money is safe and earns a little interest. Many online savings accounts let you open an account with no fees and no minimums.

Over time, these tiny deposits grow—and more importantly, you build the habit.

Step 4: Use the "Spare Change" Trick

Some banks and apps offer round-up features that round up your purchases to the nearest dollar and transfer the difference into savings. So if you spend $3.60 on a coffee, $0.40 goes into your savings.

Apps like Acorns and Chime make this super easy and automatic. It’s an effortless way to save that doesn’t require big sacrifices.

Step 5: Find Quick Wins to Cut Expenses

Saving money doesn’t always mean suffering. Sometimes it just takes a few smart tweaks. Here are some quick ways to reduce your spending:

Cancel unused subscriptions. Check your bank statement—chances are you’re paying for something you forgot.
Switch to a cheaper phone plan. Services like Mint Mobile or Visible offer plans as low as $15/month.
Use your local library. Borrow books, movies, and even audiobooks for free.
Cook at home. Even cooking 2-3 meals per week instead of eating out can save hundreds.

Don’t try to change everything overnight. Start with one or two areas and build from there.

Step 6: Increase Your Income

If your budget is already tight, you might need to grow your income to start saving. The good news is there are more flexible options than ever:

Sell items you don’t use. Try Facebook Marketplace, eBay, or local apps like OfferUp.
Pick up a side hustle. Food delivery, rideshare driving, freelancing, or even tutoring can bring in extra cash.
Online gigs. Platforms like Fiverr and Upwork let you earn from skills like writing, design, or voice-over work.

Even if it's just $50 a week—that's $200 a month toward savings or debt repayment.

Step 7: Build an Emergency Fund

Your first savings goal should be an emergency fund. This is money set aside for true emergencies: car repairs, medical bills, job loss, etc.

Start small. Aim for $100, then $500. Eventually, your goal should be at least three months of living expenses.

Not sure where to stash that cash? Read our full guide on where to keep your emergency fund to keep it safe but accessible.

Step 8: Set a Monthly Savings Goal

Once you’ve gotten into the habit, give yourself a monthly savings target. This adds structure and motivation.

Maybe your first goal is $25/month. Next month, bump it to $35. Track your progress and celebrate milestones.

Not sure how much is realistic? Our guide on how much to save each month can help you find the right number for your income and lifestyle.

Step 9: Stay Motivated with Visual Goals

Seeing progress can be incredibly motivating. Try one of these:

Use a savings tracker printable or app
Create a progress bar in your planner
Move cash to labeled envelopes (e.g., "Emergency Fund," "Car Repair")

When you can see your money growing, even slowly, it encourages you to keep going.

Step 10: Avoid Lifestyle Creep

As your financial situation improves, it can be tempting to upgrade your lifestyle immediately. That’s called lifestyle creep—and it can eat up your progress fast.

Instead, continue living below your means for a while and funnel that extra money into savings or debt. Your future self will thank you.

Final Thoughts: Every Dollar Saved is a Win

Learning how to save money when you're broke isn’t about perfection. It’s about small, smart choices that build momentum. No amount is too small to get started.

When you save even $5, you’re sending yourself a powerful message: I’m taking control. Over time, these small wins stack up into real change.

So track your spending. Trim the fat. Automate what you can. Whether you’re saving coins or twenty-dollar bills, what matters is that you start.

You’ve got this—and we’re here to help. Explore more beginner-friendly tips and resources at CashBegin, and take your first step toward financial freedom today.