7 Ways to Stretch Your Money and Paycheck

Woman depositing her check electronically
••• RyanJLane/iStock

Most people can do more to stretch their money to cover more of their expenses. It would be nice to wave a magic wand and suddenly have enough money to cover all of your bills with plenty leftover for fun. The truth is that prices are going up and you may need to do more to stretch your paycheck to cover rising costs. Raises, even cost of living raises, are not as easy to get when the economy is in a downturn. And many people are grateful to just have a job. If you are being paid with a prepaid debit card, you may struggle even more because of hidden fees.

It is time to embrace a frugal lifestyle. Learn some easy ways to stretch your paycheck.

1. Budget

This may not seem like a way to stretch your paycheck, but if you carefully plan how you want to spend your money, you will have more money to spend on the things you want to. If you do not have a plan, your money will quickly disappear as you try to cover your expenses. A budget is one of your strongest money management tools. It can be as flexible as you need it to be so that one month you spend more on your vacation expenses and cut back on eating out or in other areas. Planning allows you to prioritize things the way you want to so that you can succeed.

Your budget and establishing an emergency fund are both important if you want to stop living from paycheck to paycheck. You can try these ​15 ways to start saving today to help make budgeting easier.

2. Look at Your Withholdings

A flexible spending account, monthly retirement contributions, and your health insurance premium can reduce the amount the IRS takes out, and you may not find a big cut in your paycheck. Open enrollment for these programs usually runs in the fall, and you ​should take advantage of them now if you haven't already.

A flexible spending account allows you to set aside money for healthcare or childcare expenses before you are taxed, saving you money. You are reimbursed for these expenses once you pay them or your company may have a debit card that you can use for them. If you do not use them up, you will lose the benefit.

Retirement contributions come out before taxes if you have a traditional 401(k). Additionally, you are not taxed on what your employer contributes to the account, so you should take full advantage of your company match, which is money for your retirement that you do not need to contribute.

3. Shop for Better Plans

It is worth shopping for a better rate on your cell phone, your cable provider, car insurance, and your gym membership each year. New customers are offered better deals than existing customers. If you sign up for a contract, then you should shop each time your contract is up for renewal. This can lower your monthly bills, without much work, and make your money go farther. Additionally, you may consider reducing your plans minutes, or the channels to reduce your monthly deal, especially if you do not use them all each month.

4. Avoid Debt

You can make your money go further if you do not need to pay interest to a bank. Think about it, if you use a credit card to buy an item because it is on sale, but only make the minimum payment you are going to pay much more in interest than you originally saved on the purchase. Paying with cash (or debit cards) gives you more spending power for your dollar. If you do not need to make any monthly debt payments then you will have more of your paycheck to spend and save each month.

5. Split Costs When You Can

In your 20s, bulk buying does not usually make sense. If you are single or even a couple, you may have a difficult time using up what you purchased before it goes bad, and if you throw enough of the products away, then you really are not saving money. You can solve this problem by doing a co-op with a few friends, where you buy the bulk items together, split them up and divide the cost with each other. This can save you money on food, but you won't be stuck with too much food and no place to store it.

You can also set up a meal co-op, where you take turns feeding each other since it is less expensive to cook a larger meal than several little ones. These are all frugal options you should consider.

6. Look for Free Activities

Take advantage of any free activities or services that you can. Your library is a great place to get books, and even DVDs to watch. This can save you money. Many cities offer free outdoor concerts in the summers or outdoor movies that are a lot less than going to a theater. You can also look for free or cheap dating ideas to save money. These options can be fun, and reduce the amount you pay to have a good time. Also spending time outside hiking, swimming at the lake or the beach can save you money on entertainment costs while allowing you to be outside and workout at the same time.


7. Use Your Bonuses Wisely

You should not use your bonus to cover your daily expenses. When creating your budget, you should never use your bonus as part of your budget. Although your bonus may seem consistent, it can change in both amount or frequency. Instead, you should look at your bonus as extra money to put towards your goals when you receive it. It is important to create a spending plan for your bonus so that you use the money wisely. You should continue to find money within your daily budget to work towards your goals in case you do not get your bonus every year.