11 Feb
How to Start Saving When You’re Living Paycheck to Paycheck
Does it feel like saving money is impossible? Like every pound you earn disappears the second it hits your bank account? You’re not alone. Many people struggle to save on a low income, when their income barely covers the essentials. But here’s the good news—saving, even just a little, is possible! You don’t need to be rich to start saving. You just need a plan that works for your situation.
This blog will walk you through simple, realistic steps to start saving money, even if you feel like you have nothing left at the end of the month.
Know Where Your Money Goes
You can’t save what you don’t see. Before you start saving, it’s important to understand where your money is going each month.
Try this:
- Write down all your expenses for a month. Every. Single. One.
- Look at your bank statements—are there small non-essential payments adding up?
- Sort your spending into categories:
Essentials (rent, bills, food)
Wants (takeaways, extra subscriptions, shopping)
Once you see where your money is going, you might spot a few easy ways to free up a little extra cash for savings.
Quick action: Write down everything you spend for the next 7 days. Even if it’s just £1! Writing down every penny spent for a week helps you spot small changes you can make, without feeling overwhelmed. It’s a zero-pressure way to start managing money better!
Find ‘Hidden’ Money in Your Budget
Even if you’re trying to save on a low income, there might be small ways to cut back without feeling deprived.
Simple swaps that save money:
Cancel unused subscriptions – Do you really need Netflix, Disney+ AND Amazon Prime?
Plan meals for the week – This stops you from grabbing last-minute takeaways.
Call your provider – Ask for a cheaper deal on your phone or internet. They often say yes!
A common rule for budgeting is 50/30/20:
50% on needs (bills, food, rent)
30% on wants (fun stuff, hobbies)
20% on savings
But if 20% is too much, start small.
Disclaimer: If you’re paying off debt, your budget might look a little different. Instead of putting 20% into savings, you may need to prioritise clearing high-interest debts first (like credit cards or loans). Paying off debt faster can save you money in the long run because you’ll pay less interest. The key is to find a balance—even if you’re focusing on debt, saving a small amount (like £5 a week) can still help you build a safety net for unexpected expenses.
Quick action: Cancel one subscription today and put that money into savings instead. It’s a great way to save on a low income.
Make Saving Automatic (So You Don’t Forget!)
The easiest way to save? Make it automatic.
Set up a standing order – On payday, move a little money into savings before you spend it. Even £1 a day is better than nothing!
Use a round-up app – Some banking apps round up your spending and save the spare change for you. For example, if you buy a coffee for £2.70, the app rounds it up to £3 and puts the extra 30p into your savings. Over time, these small amounts add up without you even noticing! 
Rename your savings account – Calling it ‘Holiday Fund’ or ‘New Car Savings’ makes it feel like a goal, not just another account.
Quick action: Set up a standing order for £1 a day into your savings. You may not even notice it’s gone!
Tackle Debt First (It’s Eating Your Money!)
Debt can make saving feel impossible. High-interest debt (like credit cards) drains your cash fast.
Here’s what to do:
Make a list of your debts to see what you owe – This can help you understand your financial situation and decide what to focus on.
Call your lender – Ask if they can lower your interest rate or give you a better payment plan.
Avoid only paying the minimum – If you can, pay a little extra each month. It will save you a LOT over time!
If you’re struggling, IE Hub can help you manage your debts and share your information online.
Quick action: Call one company you owe money to and ask if they can reduce your payments.
Bring in a Little Extra Cash
If your income isn’t enough, finding extra money can make saving easier.
Sell things you don’t use – Clothes, gadgets, old furniture—sell them on Vinted, eBay, or Facebook Marketplace.
Side hustle for extra cash – Try small freelance jobs like writing, babysitting, or dog walking.
Check for benefits – You might be missing out on financial help you’re entitled to. Use IE Hub’s free benefits checker to find out.
Quick action: Look around your home and find three things to sell. List them online today!
Build a Small Emergency Fund (Even £100 Helps!)
An emergency fund stops small problems from turning into big money disasters.
Car breaks down?
Unexpected repair in the hose?
Vet bill?
If you have savings, you won’t need to rely on credit cards or loans.
How to start saving on a low income:
Set a small goal first – Aim for £100, not £5,000.
Keep it separate – Open a different savings account so you’re not tempted to spend it. Some banking accounts restrict the ability to withdraw cash instantly, which can help you avoid dipping into your savings for non-emergencies and keep your money growing for when you really need it.
Quick action: Open a savings account (if you don’t have one) and move £5 into it today!
Final Thoughts: How to Save on a Low Income
Saving on a low income isn’t easy, but it’s not impossible!
Start small – Even £1 a day is progress.
Make saving automatic – Set it and forget it.
Cut tiny expenses – They add up over time.
Check if you’re owed benefits – Many people miss out on extra help.
The best time to start? Right now. Choose one action from this list and do it today!
Need help with budgeting or debt? IE Hub is a free tool that helps you manage your money and share your budget with companies.