5 Urgent Things To Do If You Have No Savings

By Zach Buchenau

Last Updated: May 12, 2020

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What to do if you have no savings | Be The Budget

Are you wondering what to do if you have no savings?

Well, you’re in the right place.

Let’s face it, when you operate your financial life without any savings, you encounter a number of difficulties. First of all, you always have to rely on your next paycheck to get by, which basically puts you in a permanent state of financial stress. And second of all, you lose the ability to ride out any financial emergencies, which leaves you vulnerable to the burden of debt and long-term financial struggles. It’s an uncomfortable way to live, at best.

The good news is, you have the ability to turn things around, and begin moving in a more positive financial direction. Which, I’m guessing, is the exact reason you’re reading this post.

So, if you’re ready to improve your financial life and finally build up some savings, stick around.

What follows are the 5 most urgent things you need to do if you have no savings.

Let’s get to it!

1. Isolate Your Savings Account

One of the biggest reasons people don’t have any savings is that they don’t have any financial boundaries in place to restrict them, or at least make it inconvenient for them to pull money out of savings.

And seriously, what’s the point of putting money into your savings account if you’re just going to take it back out and spend it? There is no point.

That’s why it is incredibly important to isolate your savings. In other words, open a savings account at a completely different bank than your checking account. This is the easiest way to restrict your ability to freely transfer money back and forth between the two.

Here’s the thing, when you keep your savings in a completely different bank, transfers typically take a few days to become available. So, even if you do decide to transfer money out of savings, it forces you to take some time to think through whatever purchase you want to make. And trust me when I tell you that this little layer of inconvenience is often enough to keep you from spending your savings.

Now, on an equally important note, if you decide to open a new savings account, it’s critical you do so with a bank that offers a good interest rate. I mean, why would you opt for an interest rate of 0.1% when you could open a savings account that earns 10x – 15x that amount? Depending on how much savings you build-up, that can add up to hundreds of dollars per year.

If you’re looking for a good, high-yield savings account, I recommend the CIT Savings Builder. It offers a nice interest rate and a low minimum opening deposit, which means it’s really easy to get started.

2. Get On A Written Budget

After you open a new, isolated, savings account, it’s important to get your entire financial life out into the open. Then, get organized. And the best way to do that is to create a well-defined, written budget.

Now, if you’re new to this blog, you should know that we believe in the zero-based budgeting method. So, if you’re unfamiliar with this budgeting technique, allow me to explain.

As opposed to the traditional method of budgeting where you group your money into large, undefined groups (or percentages), zero-based budgeting gives a purpose to every single dollar of your income. You basically take your total income, and plan out every single expense for the month until you are left with $0. This might seem tedious at first, but you’ll find it leaves very little room for waste, and forces you to assess every one of your expenses; which is exactly what you need to do if you want to build up some savings.

Living on a budget is one of the most important financial habits you can adopt. And the sooner you create one, the sooner you will start building your savings.

If you want to learn more about budgeting, be sure to check out some of our other posts on the subject:

3. Cut Your Expenses To The Bone

If you want to finally build up some savings and set your financial life on a better path, you are going to have to make some sacrifices. I mean, your savings account isn’t going to magically grow on its own. Rather, you have to make cuts in other areas of life in order to free-up some money for savings.

So, now that you know exactly where every dollar of your income is going, it is time to find every expense you can live without, and cut it from your budget.

Now, obviously, the more cuts you are willing to make, the faster you will be able to build your savings. And since living without any savings is incredibly risky, early on, you need to cut as much as possible. In other words, it’s in your best interest to cut your expenses to the bone.

As a general rule of thumb, you should live on the absolute bare essentials until you have the equivalent of at least 3 months worth of living expenses sitting in your savings account.

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4. Save Before You Spend

In most cases, when people get paid, they focus on their expenses first, and savings second. In essence, they save whatever money is leftover at the end of each month.

The problem with this all-too-common method, is that it places a higher priority on spending money than it does on saving money. And if this is the way you have been handling your finances, it is likely the reason for your lack of savings.

If you want to finally stop living paycheck-to-paycheck, you need to get in the habit of paying yourself first. In other words, whenever you get paid, the first thing you should do is actually move the amount of money you want to save into your savings account. Then, use your budget to live off the remaining amount.

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5. Learn From Your Mistakes

The fifth thing you need to do if you have no savings, is to figure out, and learn from the mistakes that cause you to end up there in the first place. Beyond that, you need to take steps that ensure you don’t repeat them.

For example, if dipping into your savings was the biggest culprit, then I hope you isolated your savings account in order to make it less convenient to do so in the future. If spending money on credit cards was your biggest mistake, then I hope you cut them up and only use your debit card. Or, if you placed saving money at the bottom of your priority list, then I hope you reverse that, and save before you spend.

As with anything, it’s important for you to learn from your mistakes. Otherwise, you are likely to repeat them.

5 Urgent Things To Do If You Have No Savings | Be The Budget


5 Things To Do If You Have No Money In Savings | Be The Budget

Zach Buchenau

About The Author:

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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  1. Thank you so much for this information! I’m just now trying to wade through all the possibilities as I prepare to launch my own business. I’ve been overwhelmed frankly, and you are such a blessing. Thank you!

    1. Thanks Rachel! I love that you’re starting your own business. Just take it one step at a time, and try to take at least one positive step each day. Over time, all the little steps you take will add up to success.

  2. I really liked your article. Something should be said about Costco’s extremely good return policy .

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