How can I save when there is more month than money?

Key takeaways

  • There are just two rules to create space to save:
    • Spend less than you earn by setting a realistic budget.
    • Pay yourself first. 
  • Your first priority is an emergency fund.
  • If you have debt, pay it down first to create room in your budget to save.

Living from pay day to pay day is a stressful way to live.

In the beginning of the month you are flush, but by the end of the month you can’t afford essential items and may even be borrowing on a credit card, overdraft or from friends and family.

So suggesting you save money seems laughable, right? How can you manage that?

Maybe you believe you are not paid enough – or it’s just a tough time you are going through. You may have convinced yourself it will get better.

Believing this, however, means you have to wait for your luck to turn – for someone to decide to pay you more, or for the things that are costing you money to stop happening.

Take charge

Hopefully good things will happen to you, but it is better to take charge of your own financial life and make them happen for yourself rather than rely on factors beyond your control.

There are no tricks to taking charge of your financial life, just two simple rules:

  • Spend less than you earn by creating a realistic budget and sticking to it.
  • Pay yourself first by automating a transfer to your savings and investments as soon as you are paid.

Listing your income and expenses will show you if you are spending more or less than your income, and enable you to identify the expenses you can reign in so that you can spend within your means. Read more: How can I draw up a budget that works for me? and use the Smart About Money Budget Calculator

When you have created a space in your budget – no matter how small – it is time to save.


If the sacrifices you need to make to stick to a budget make you unhappy or you believe you are not paid enough, make a plan to move forward. Can you look for a better paid job or start a side hustle? Do you need to study further to get a better job? Should you save for the cost of a further qualification or could your studies be funded?

Start small

Start small if it is all you can manage. Your first priority should be building up an emergency fund that will keep you from incurring debt when an emergency arises. You should have enough money set aside so that you can replace your car tyres or a critical appliance without going into debt.

Once you have this fund in place, you should aim to grow a more substantial emergency fund of at least six times your monthly take home pay. This would give you at least six months to find a new job should you lose yours. Read more: How do I set up an emergency fund?

If you are considering buying a new fridge, television set or cell phone, instead of buying it on credit, use what you would have paid in credit repayments to save up enough money to buy these items cash. This approach will save you substantial amounts of money in interest payments.

Once you have achieved your short-term savings goals, it is time to start investing so that your money can start working for you by earning a return above inflation. Use the Smart About Money Goals Calculator to set some savings goals.

If you are paying off lots of debt

If you have debt – the costly unsecured short-term debt like credit card debt, an overdraft, a personal loan or a loan with an unregistered lender – your first priority should be to pay down that debt and give yourself some relief from the interest that accumulates each month.

Paying down debt also involves a commitment to spend less than what you have left after your debt repayments, and to channel the difference into repaying the debt.

If you do not have enough left to pay essential costs after your debt repayments, you may be overindebted and can seek relief by agreeing to go through debt counselling.

Debt counselling is a serious step, however, that takes you into a legal process over which you do not have control and will prevent you from accessing credit until your debts are repaid. This can prevent you from getting a loan to start a business or to buy a house or fund a child’s education when your finances start to improve.  

The fact that you are in debt counselling will be recorded on your profile and it will cost you in fees. Think about whether you can resolve your issues by, for example, downscaling your lifestyle.

You can pay off the smallest debt or the most expensive debt first, but as soon as you have done that, channel the money you no longer need to spend on that repayment into the next debt until you only have debt on your home loan and possibly vehicle finance.

Then it is time to move on to saving and getting financially stronger.