What if I Can Only Save $150 a Month?

Allocating some of your income toward savings is essential. Whether you're stashing extra cash to grow your emergency fund or building a sinking fund to plan for upcoming expenses like car repairs, saving money can help you prepare for future costs that come your way. But what if you can't afford to save much money? Should you bother to save at all?

A small savings fund can make a difference

When you don't make much money, it can be challenging to prioritize saving. Many people struggle to save money because they're most focused on paying expensive bills, like housing costs. With everyday costs climbing, your money no longer goes as far as it once did. It can feel impossible to save if there's little or nothing left over after paying all your bills.

But saving is essential. Setting aside even a small amount of extra money is much better than saving none. What if you can only afford to save $150 a month? That may not feel like a lot of money, but it will add up if you continue to set aside money regularly. If you save $150 every month for a year, you'll have $1,800 saved in twelve months -- which is much better than $0.

Four tips to boost your savings

If you feel like your current financial situation is keeping you from reaching your savings goals, there are steps you can take to boost your savings. Here are a few tips to try.

1. Track your spending and follow a budget

Budgeting may sound complicated, but it gets easier once you become more experienced. Tracking your spending and setting a budget can allow you to free up some of your income for other goals. Using one of the best budgeting apps out there can make the process easier.

Let's imagine you've been paying for a $20 monthly subscription you no longer use. By canceling this and allocating an additional $20 monthly toward your savings goals, you can increase your savings by $240 yearly. There may be other expenses you can trim, too.

2. Consider savings interest rates

It's also essential to pay attention to interest rates. Many regular savings accounts have low rates. You can increase your income by stashing cash in a high-yield savings account. It's not a bad idea to occasionally review interest rates to ensure you're not missing out on earnings. Moving your money to a new bank with a higher rate could enable you to earn more money on your savings.

3. Increase your income

If your current salary isn't cutting it, you may want to look for ways to boost your income. Getting a side hustle or part-time job is one option. Applying for better-paying full-time opportunities is another. If you can't take on more work, you might consider selling unwanted items at home to bring in extra cash. The more you make, the easier it can be to save.

4. Automate your savings

If you're forgetful or are worried you'll spend the money you plan to save before you set it aside, this savings technique may help. You can set up automatic transfers through your bank so money is sent from your checking account to your savings account as often as you'd like. By automating your savings, you can save time and stay on track.

Don't give up on your financial goals

You may feel stuck due to your personal financial situation, but remember that your current struggles don't have to be forever. You can make small changes that help you get closer to reaching your goals. If you can only afford to save a small amount of money right now, that's okay. Every little bit saved adds up and can make a difference in the long run.