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Why saving money feels impossible and how to adjust

When everything is more expensive, here’s how to save smarter.

You’re not alone if you feel like saving money is impossible. Between the cost of living, student debt and inflation, saving cash can feel like an insurmountable hill to overcome. While skipping an artisan coffee each morning won’t impact your budget much, there are other things you can do to start saving today without breaking the bank.

Everything is actually more expensive

If you feel that the cost of living has increased dramatically in the last few years, you’re not imagining things.

The national Consumer Price Index (CPI) is an economic metric that measures the average change over time in prices for consumer goods and services. From 2021 to 2022, the CPI rose 7.5%. From 2022 to 2023, it rose another 6.4%. Overall, prices for consumer goods and services are nearly 14% higher than two years ago.

Graphic source

To add insult to injury, the federal minimum wage is still an abysmal $7.25 — or about $15,000 gross annually if you’re full-time and work 50 weeks per year. Some states have raised their minimum wage, like California, which is currently $15.50 per hour. But many states like Alabama, Indiana, Iowa, Kentucky, Mississippi and Texas still have their minimum wage set at $7.25.

Using Texas as an example, the average cost of a one-bedroom apartment is approximately $755 per month. With minimum wage in Texas yielding approximately $1,256 gross per month, paying $755 for rent means you’ll have less than $500 for food, health insurance, utilities, car payment and all expenses — possibly leaving little to nothing for you to put away in the bank.

Student loan payments are also resuming

There are over 45 million people with student loan debt. To everyone’s dismay, the Department of Education has announced that student loan interest will resume in September, and payments will resume in October.

The average federal student loan debt is over $37,000 per borrower, and private student loan debt averages over $54,000 per borrower. If you have student debt and set up a repayment plan, the average monthly student loan payment is estimated to be $503 per month and takes an average of 20 years to pay off.

3 ways to start saving money despite the challenges

While the statistics I’ve mentioned aren’t exactly moral boosters, there are small things you can start doing to set yourself up for the future or, at the very least, establish an emergency fund.

1. Open a Roth IRA

Unlike 401(k)s, a Roth IRA is available to anyone with earned income — as long as your Modified Adjusted Gross Income (MAGI) is under $144,000 as a single filer.

Roth IRAs can get you tax-free income in retirement, and there are no required minimum contributions, so you can put in what you can actually afford. There are no rules on account balances or how much you’re required to put away each month, so you can start small and work your way up over time. To make saving easier, you can also set up automatic transfers from your bank account.

2. Get an HYSA

Storing money under your mattress means your money has no way to fight back against inflation. But if you deposit it into a high-yield account, your money can grow while keeping up with inflation.

A high-yield savings account (HYSA) is a savings account with a high annual percentage yield (APY). The average savings account has a rate of 0.42%, which doesn’t yield that much over time. Comparatively, HYSAs often have APYs around the 3% to 5% range, giving you way more bang for your buck.

It may also be wise to set up automatic transfers and get an HYSA that’s not tied to your everyday checking account, so you’re less tempted to spend the funds. But if you think you might need to access it for emergencies, consider a money market savings account, which often comes with a debit card for easy access.

3. Improve your credit score

This one takes time, but improving your credit score can help you save a lot of money over time. That pesky three-digit number heavily determines the interest rates and loan amounts you can qualify for.

A poor credit score can result in higher payments for credit cards, car loans, personal loans and other types of credit. It could also lead to loan rejections, which can hurt if you really need financial assistance.

Aim to get your credit above 670. This is usually the cutoff for what is considered a “good” credit score. Taking the time to work on your credit can really boost your chances of getting approved for loans and also save you money on interest charges when you borrow.

Saving something is better than nothing

Try not to beat yourself up if you’re struggling to save. Whether you’re living paycheck to paycheck, working to pay off your student loans or putting all your energy into saving up for a down payment on a home, you’re not alone. The numbers don’t lie — everything really is more expensive than it was not too long ago.

If you start by saving $5 per paycheck and deposit it into a Roth IRA or a savings account, coupled with efforts to improve your credit score, it’ll gradually accumulate over time. Though results may not be immediate, it pays to be consistent.

About the Author

Bethany Hickey is a personal finance writer at Finder, specializing in banking, lending, insurance, and crypto. Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance and AOL. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt. Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others. Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine.

This article originally appeared on and was syndicated by

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