How to Save Money When You're Living Paycheck to Paycheck

Lynchburg, VA- Shocking numbers on just how much Americans are struggling to pay their bills these days. 76% of people are living paycheck to paycheck, and nearly a quarter of people have no savings account.

Financial advisors say having an emergency savings is crucial. They say you need at least enough money put away to last you three months.

But the big question is, if you already have a dark cloud looming over your bank account, how do you save money for a rainy day?

"Things happen, emergencies occur," said Neal Davidson, a financial advisor.

After a job loss or injury, you need a stash of cash to help cushion your fall. But saving money when you can barely pay your bills, is a daunting task.

"Expenses are going up, wages are not going up," said Davidson.

And savings accounts are drying up. To bring your account back to life, Davidson says start with a savings goal.

"What you really need to figure out is how much you spend each month. Most people really underestimate that number. But I tell people they need to write down every single thing they spend for a month, so you can actually see how much you spend," he said.

Ann Ronk, a credit counselor, suggests the same thing.

"We look at every little aspect of the living expenses," she said.

Ronk has been helping people save for three decades. She says it could take years to store up a three month emergency fund, and every penny counts--even pennies you may have set aside for retirement.

"They need to live day to day and month to month and look at retirement down the road. Put something away for retirement, but reduce the amount," said Ronk.

Above all Ronk says the biggest savings issue she sees is self-control.

"Their wants are way before their needs."

She says when you get your priorities in line, and take an inventory of what you're buying, it will be easier to make a bee-line for the checkout.

"You have to be careful and tell yourself, 'I'm going grocery shopping,' and buy groceries and leave," she said.

Ronk runs the Consumer Credit Counseling Program at the Presbyterian Homes and Family Services and the Family Alliance in Lynchburg. Her services are free and she welcomes anyone who needs help planning a budget.