Have you ever had to rebuild your savings from scratch?

Happy Thursday, Penny Hoarders! Today I’m trying to answer a letter from a reader who needs to rebuild their savings from scratch. I was wondering what tips you all have.

The reader writes: “After going through a major sickness (cancer), four operations and numerous hospitalizations. We went from a two-salary household to a one. I have cut most of our expenses - cable to streaming, budget our utilities, etc. I need another pair of eyes that is not in this situation.”

What tips do you have for saving money when you’ve already cut to the bone? When I was up to my eyeballs in debt and barely making any money, it was really tough because the big expenses are the ones that are hard to cut. I was already living in a pretty cheap small one-bedroom apartment, but even if I could have found a cheaper one, I still would have had to pay the costs of moving and a security deposit, which I didn’t have.

Do you have any tips for trimming expenses when you feel like you’ve already cut back everywhere you can? If so, please share!

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Yes! It’s a tough situation.

12 years ago I lost my job and also had cancer- it took awhile to get back on my feet. I applied for assistance- food stamps, childcare assistance, housing assistance, etc. (Housing was a several years long waitlist, but food and childcare was granted.) I had an absolute bare bones budget- rent/electricity/food/gas/childcare. Sold my vehicle and got one with no payments. ANY ‘extra’ money went to savings and I didn’t touch it. And by extra, I mean rebates, tax returns, gifts. No vacations, clothes were thrifted, fun times with the kids were game nights at home. And we did have fun! HOWEVER, I knew that this was temporary! And we all did alright!

What I am trying to say, is that it often it seems that we can’t cut back any more, and we find that we do spend money we don’t realize. Or we have additional income that we don’t pay attention to because it is sporadic or unexpected. Over time, it adds up! And every little bit added to savings, can be encouragement to add more. I didn’t take on a second job because I had young kids I wanted to see. But I found a new job that was family friendly and eventually earned more there.

I tell the people that I work with to TRACK ALL SPENDING AND INCOME. It is not fun and it’s a real pain, but track every penny for at least 1 month and get a more accurate picture of what you are working with. Then make a plan. And know that a super restrictive plan will likely be short term, and that’s helpful to remember. And if it is to the point that you need assistance, then apply for assistance! That’s temporary too, designed to help you get back on your feet. If you worked, you paid taxes for it so utilize it.

Good luck to the reader! :four_leaf_clover:


I love all of your suggestions, @kellyfromkeene.

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Oh yes, I’ve had to rebuild my savings many times. I followed a lot of the tips suggested by @kellyfromkeene. Tracking is fundamental.

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good morning i so glad you got through all your medical i became a single income when my husband passed away eight years ago i didn’t want to depend on my children so i work part time and i was able to get help from heap which pays my Gas and Electric i was getting thirteen dollars a month on snap but they took that away when i got a raise in social security ,so each pay check i put away twenty five dollars to make sure i can pay bills and buy food god bless you and hope fully this great community has good ideas to help

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Savings on a tight budget is extremely hard, especially with inflation cutting back any effort. The biggest issue, I suppose is keeping the money put aside for savings and not needing to use it.
The first and hardest thing to do is to realize your actual spending costs and your actual income. The two must equal out—in other words you can’t spend more than you have. Today there’s so many apps that will help you get a running total of your spending if you prefer to do this digitally. I don’t because I don’t want some app to have my access to my financial data, so I have forced myself to make a hard copy record of every single transaction I have done, whether it is paying a bill or an impulse purchase. It forces me to not buy anything by an impulse without evaluating whether I can afford it. My priority is to pay the necessities cost first before anything else—rent, utilities and food—and then all debt costs—credit cards. My goal is to eliminate all debt to less than 30% of my credit by eliminating/lowering the totals on each card with some of them being paid off entirely without closing down the account. Each year I have reduced or eliminated the debt despite inflation raising the interest rates and prices on my food and utilities bills. But half the battle is to not impulse buy but delay the purchase until you evaluate the need.
Predicting your costs and maintaining that you are not going over your budget will eventually give you some money to put aside for savings. Don’t plan on saving a large amount unless you have that much extra money available after you have paid your necessity bills. All those stories that I have read where people “claim “ that they “saved and paid “ off large debts—none of them were paying big necessity bills like the rent or a mortgage. If I wasn’t paying my housing costs, I’d probably have most of yearly income saved up in a nice high interest account but I don’t have that option, so I do it the slow way. Works for me.


@maria.rose I don’t like the apps that access my bank accounts either. Pen and paper works best for me, and like you said, just by writing it down makes me take a second to think about what I’m doing.

Do your best to not have monthly payments for anything.
Don’t have auto pay on anything. That could easily make matters worse.
Here’s a tip.: CapitalOne 360 pays the highest interest for a savings account. I’ve been banking there for years. I first got it when I was very broke and could not afford monthly bank fees or minimum balance, etc. You’ll make money on money that’s just sitting in the bank.
Also, if there are things you need but can’t afford - sites like Nextdoor ( a great sharing site for your neighborhood) - search for FREE stuff in the sales section. Craigslist too. Many people give good stuff away. I know I do.

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These are all such great tips! I especially love the part about how you still had fun, even in tough times. Seeing a situation as temporary instead of your forever new normal can make such a huge difference as well.

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We’ve been cleaned out twice. Besides tracking our spending, which is essential, and budgeting, we found using cash really helped us keep things like food costs down. We built up a reperatoire of inexpensive meals. We started to (and continue to) garden, can and scratch cook. We negotiated medical expenses with the physicians and hospital. We worked out a payment plan, no interest, and paid faithfully. We also used WIC and joined a bulk food coop. We stopped spending where we could, (ie replacement clothing), and made do by mending, managing with less or repurposing. At that point I eliminated or reduced paper product use. Still kept with tp, but used old t shirts and worn towels for cleaning rags and made napkins from an old tablecloth. It really stretched our creativity.

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