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💡Friday Finance: Can I Save Even if I Don’t Make Much Money?

The short answer is YES!

Yes, you can. As financial advisors repeat: as long as you’re earning something, it’s possible to save something. The key to success is building the habit of saving early in your income producing years, and not waiting for “someday,” when you think you’ll have enough money to start saving.

Saving isn’t about how much you make. It’s about how well you manage what comes in.

🪣 Step One: Look at the Whole Paycheck

Every time money hits your account — whether it’s every two weeks, once a month, or a commission check — think of it as a whole pie you get to divide up into the appropriate categories. And instead of wondering where it all goes, decide where it’s going to go before you spend it. We call this decision budgeting.

The easiest way to do this budgeting is by actually splitting your income, no matter how large or small it may be, into three buckets:

🏡 Bucket 1: Needs – 50%

Half of your paycheck should go toward the “things” (items and places) that keep your life running — the non-negotiables. That list usually includes:

  • Housing (rent or mortgage, property taxes, basic maintenance) – ideally around 27–30% of your total income
  • Transportation (car payments, gas, bus pass, bike, car repairs)
  • Groceries, basic food and beverages
  • Cell phone and internet
  • Clothing you actually need
  • Health care and health maintenance

Note: if housing alone is eating up more than 30% of your take-home pay, it’s worth taking a hard look at other areas and trimming costs. Mortgage and bank lenders follow the same logic — they usually won’t approve a mortgage if housing costs are higher than that 30% mark. And when you go to buy, if you can, put 20% down with the purchase, that’s instant equity working in your favor. (It also saves you private mortgage insurance fees.) If you can’t afford the 20% downpayment, (money you save in your Bucket 3) pay as much as you can, and borrow the rest.

🎟️ Bucket 2: Wants – 30%

This is the bucket where a lot of people lose control, but it’s also the one that gives you joy. These are the nice-to-haves — things you enjoy but don’t need to survive:

  • Going out to eat
  • Concerts, streaming services, subscriptions
  • Extra clothes, shoes, accessories
  • Vacations and travel upgrades
  • New gadgets, toys or fashion splurges

If something on this list is truly essential for you in your life to fully function — like a smart phone wireless plan or reliable transportation — then move it into Bucket 1. Otherwise, keeping “wants” in check gives you financial freedom and flexibility over time.

💰 Bucket 3: Savings – 20%

This is where future-you benefits. The goal is to set aside 20% of every paycheck, no matter how big or small, for savings before you do anything else. That might sound ambitious, but the habit matters more than the amount. Even if you start smaller and work your way up, you’re still building momentum. The first rule of personal finance is to PAY YOURSELF FIRST, and this forced savings puts your benefits at the top of the list and not the last consideration at the end of the month.

Here’s what goes in this bucket:

  • Emergency fund: Life happens — the car breaks down, the cat needs surgery, the water heater dies. Having cash set aside for those moments keeps you from taking out a loan and going into debt.
  • Retirement savings: Company sponsored 401(k), Traditional IRA (before tax dollars), ROTH IRA (after tax dollars) or other investment accounts that grow over time.
  • Future goals: College funds, vacations, a business idea, or a down payment for a home.

If you’re paid irregularly — say, by commission, or bonus, or receive unexpected amounts — say, lottery winnings or inheritance dollars — the same rule applies: pull 20% aside from every check, no exceptions. You’ll be surprised how quickly it adds up.

🧠 Why This Works — Even If You Earn Less

The real secret is that saving isn’t about hitting a certain number — it’s about creating a savings habit. If 20% feels out of reach, start with 10% or 15% of those paychecks. What matters most is that every time you get paid, something moves into that savings bucket. Over time, those small amounts grow — and so does your confidence in managing your income and paying yourself first.

And once saving becomes automatic (direct deposit of income is a good idea), you won’t even think about it. It just becomes part of how you manage money — like paying rent or buying groceries — except this “bill” is a payment to your future self.

📊 The Big Picture

If you make money, you can save money.

Dividing your paycheck into Needs (50%), Wants (30%), and Savings (20%) isn’t about restriction — it’s about stability, it’s about direction.

This saving approach gives your dollars a purpose, builds financial resilience, and creates options for the future — no matter what your paycheck looks like today. Dollars with a purpose go a long way to having that vacation, college, and retirement savings you want, when you need it.