How to save money when you're in debt

If recent statistics tell us anything, it’s that Americans are thrill-seekers. We live on the edge. We go skydiving without parachutes. 

OK, maybe not literally

But, given the fact that 49 percent of Americans don’t have an emergency savings account, we are living dangerously close to the edge … of financial ruin, that is. 

It was recently reported that nearly half of all Americans are just one emergency away from financial disaster. And, really, who wants to face unmanageable levels of debt because of a cavity? (Been there, done that!) 

So in honor of America Saves Week, I challenge you to begin funding an emergency savings account – regardless of your situation

And while I normally recommend maintaining an emergency savings account of at least three to six months’ salary, I understand that can feel like an overwhelming challenge. Especially when you’re probably already thinking: 

How am I supposed to save money when I’m already trying to pay off debt, keep up with my bills, and stay current on my mortgage?! 

So I recommend starting small. Aim to save – and maintain – a fund of $500 to $1,000 for life's little emergencies. The following are five simple ways for ANYONE to start saving: 

  1. Make saving automatic. Have part of your paycheck automatically deposited into a savings or share account or set up regular transfers from your checking to your savings account. Trust me, if you don’t see the money in the first place, you won’t miss it! 
  2. Save your loose change. Putting aside fifty cents a day over the course of a year will allow you to save nearly 40 percent of a $500 emergency fund. And putting aside just $2 a day for a year will leave you with more than $700 saved by this time next year!
  3. Get rid of cable. If there’s one money-saving tip I swear by, it’s this one. Getting rid of cable was the best decision I ever made. And with so many cost-effective alternatives to cable, like Hulu and Netflix, there's really no reason not to! Do this and you could have your emergency savings account funded in a matter of months. 
  4. Save a portion of your tax refund. Use tax form 8888 to split your return. 
  5. Bring lunch to work. If buying lunch at work costs $5, but making lunch at home costs only $2.50, then in one year, you could afford to create a $500 emergency fund and still have money left over. 

I want to hear your savvy saving tips! Share yours in the comment section below! 

Jessica Horton is a former copywriter and community manager at MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

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  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

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  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.