Got $0 in Your Savings? Here’s What to Do First

There’s a reason we’re all supposed to have a healthy savings account balance: You never know when unexpected expenses might pop up. Or, you could lose your job and need money to cover your bills until you find a new one. In fact, as a general rule, it’s a good idea to have an emergency fund with enough money to pay for three to six months of essential living costs. But what if you’re nowhere close?

A lot of people struggle to save. Many find that life’s circumstances make it next to impossible to bank any amount of money. This holds especially true if you’re grappling with a limited income and find that your basic expenses eat up your monthly paycheck.

But having $0 in savings puts you at risk of debt, credit score damage, and leaves you with no safety net. That’s why it’s important that you try to amass some cash reserves over time. Here are a few ways to start out.

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1. See if there are any expenses you can cut back on

If you don’t have a lot of income and are pretty much only paying for the basics, cutting back on spending may seem like an unreasonable ask. But it still pays to examine your spending and see if there’s any wiggle room — even if it’s just a few dollars here and there. Start by setting up a detailed budget that maps out your various expenses, from rent to food to utilities. That way, you’ll see exactly where your money goes month after month, and you might see some cost-saving opportunities.

For example, say you typically spend $300 a month on groceries. Hunting down sales and clipping coupons might help you shave that total down to $280. And make no mistake about it: Saving $20 a month is much better than saving nothing at all.

2. See if you qualify for government aid

If you constantly max out your paychecks with essential expenses and you’re not spending frivolously in any way, then it could be that you need outside help — and there’s no shame in that.

There are several types of government benefits you may be eligible for, depending on your income and household size. SNAP, for example, will help you cover your food costs, so it pays to see if you fall within the income limits to qualify. You can also apply for help with your utility bills through the Low Income Home Energy Assistance Program (LIHEAP). Your best bet in this regard is to use the LIHEAP database to contact your local office for details. Finally, it pays to see if you qualify for a rental assistance program.

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If you are eligible for government aid, you might then manage to free up a little bit of money to put into savings. Then you’d have a cushion for those times when extra expenses creep up on you.

3. Look into getting a second source of income

It may be the case that you’re currently underemployed and are struggling to boost your earnings. If so, see if you can piece together a more robust income by getting a second job. You could try picking up a few shifts at a local business, or seeing if there’s a job you can do more independently. The latter may be more feasible if you have children you need to care for. For example, doing medical billing for 10 hours a week from home may be a better solution than working two nights a week if you’d have to pay for a babysitter. That way you wouldn’t lose a chunk of your earnings to pay for childcare.

Don’t give up hope on saving money

A lot of people don’t have money in savings, so if that’s your situation, rest assured you’re not alone. The key, however, is to take steps to slowly but surely accumulate some cash reserves so you’re not left in the lurch or forced into debt when unplanned bills come your way.

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Remember, you don’t have to build a solid emergency fund overnight. In fact, it might take years to save up enough to cover a full three months of bills. But if you manage to save some amount of money in the near term, you’ll have that much more protection from life’s many unknowns.

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