Broker Check
How to save for retirement when you have no money?

How to save for retirement when you have no money?

May 29, 2018
Share |

26% of American adults have no savings and 36% of American adults have no retirement savings. (Source)

This is a scary statistic, but the truth of the matter is that not everyone can save for retirement. However, there are ways, even if you live paycheck to paycheck, to put some money away for retirement.

Using some of the tips below, I believe most people can find a way to get started.


The most important thing you could do in this scenario is to create a budget. Here are the basic steps:

  • Write down your income
  • Write down your necessary expenses (bills, utilities, food, etc.)
  • Write down any fun money you want to utilize (keep this low)
  • Compare total expenses and income, and make adjustments as needed.

For a more in-depth look at creating a budget, click here.

Track and cut expenses

Where is your money going every month? Look back at the past few months and write down every penny that went out and where it went to. Categorize it by the following items:

  • Housing
  • Utilities (gas/electric/water)
  • Food
  • Around the house/toiletries
  • Transportation
  • Entertainment (eating out/bar/movies/shows/etc.)
  • Medical expenses
  • Debt
  • Savings

Tracking your expenses will give you a good idea of where you need to make improvements. Keep an eye out for easy to spend, expensive categories like eating out. You may do it once per week, but that can really add up.

Keep cutting

Once you have cut out any unnecessary spending, like going to the bar and eating out, it's time to make further cuts. Take on a frugal lifestyle. Commute less than necessary, cut cable, keep food spending at a minimum, and do what you can to save on utilities.

For more information on how to live frugally, click here.

Get rid of debt

When any of your monthly income goes towards paying off debt, it hurts. If you could magically get rid of all your debt, how much money would that free up each month? $200? $500? $1,000?

Some people could have even more available for other endeavors, like saving for retirement. Do whatever you can to get rid of your debt.

If you have credit card debt, come up with a debt repayment plan. The two most popular methods are:

  • Snowball method - Using this method, you pay down your lowest balance first. You pay the minimum towards your remaining debts and put every dollar possible towards that small balance. Once that is paid off, you funnel that extra money towards your next lowest debt. Repeat until you have nothing left.

  • Debt avalanche - Using this method, you tackle the debt with the highest interest. Similar to the last method, you pay the minimum towards your other balances and every available dollar goes to the balance with the highest debt. Once that's paid off, you re-direct that money towards the next highest balance.

  • Balance transfer - If you have credit card debt with very high interest, see if you qualify for a 0% APR balance transfer. The zero rate is for a limited time only but could last up to 21 months. This could save you a lot of money on interest.

If you have student loans, you could try refinancing.

For more information on getting rid of debt, click here.


Automation is a very important tool in personal finance. You should automate as much as you can. Automate your bills so you don't run the risk of paying late, thus incurring a late fee.

Automate your savings to take place at the beginning of each month. That way, you save what's needed before you have the chance to spend it all.

If you are serious about saving for retirement and improving your finances, this is a great way to get started.


Saving for retirement can be a difficult thing to do sometimes. This is especially true when it seems all of the money we make goes towards bills, food, and other necessary items.

Retirement, however, is very much a priority. Social Security will only get you so far, and if you don't have a pension to count on, it's you who needs to provide for yourself in retirement. Work hard and save now so you can relax and enjoy later.