Money Saving Tips

11 Great Ways to Stretch Your Paycheck

11 Great Ways to Stretch Your Paycheck
Written by Oana Schneider

Did you know that more than 70% of workers in the United States still live on a paycheck-to-paycheck basis? This is according to a recent poll conducted by the American Payroll Association.There are two reasons why this is so.First , there are some employees who refuse to stick to a budget or they simply do not know how to live below their means – so they end up almost not making ends meet before the next paycheck comes in.Second, tough challenges in the economy from recent years brought about job loss, home loss, and other economic challenges for those with average salaries.

11 Great Ways to Stretch Your Paycheck

Despite the economy having bounced back recently, it is still quite tough for most families or single individuals to increase their personal savings. The good news is that there are a good number of techniques on how you can stretch your paycheck. According to Washington, D.C.-based Kiplinger, a publisher of business forecasts and personal finance advice, you can use the following chart on how to divvy up your paycheck.

11 Great Ways to Stretch Your Paycheck

The figures are based on national averages, and can be used as a guide for spending your money – after taxes:

35% –  Housing (rent, utilities and insurance)
15% – Food (at home and eating out)
12% –  Transportation (car loan and other car-related expenses, insurance, mass transit)
  8% –  Debt (student loans, credit cards, and other debts)
  7% –  Retirement Savings (excluding employer match)
  5% –  Health Care (insurance and co-payments)
  5% – Communication (mobile phone plans, Internet)
  5% – Other Savings (emergency fund, other financial goals)
 5% – Entertainment (includes cable bill)
  3% –  Clothes

While sticking to a budget, you can find great ways to stretch your paycheck at the same time, which we will learn more about in the next section.

11 Techniques on How to Stretch Your Paycheck

If your goal is to stretch your paycheck, remember that every little bit of saving counts. Even if you only get to save $1 per day, that amounts to $30 or $31 per month – a big deal if you are living on a meagre paycheck.

You should also have the entire household participate in your efforts to stretch your funds, especially when it comes to utilities. If everyone will make the effort to save money on electricity and water, you will have lower bills to pay every month. If you will cut back on entertainment costs and lessen the frequency of eating out or ordering in, you can slash your food expenses.

Here are eleven more specific techniques on how to stretch your paycheck:

1. Complete a W-4 form at work.

If you’re an employee, you really do not have to wait for the year end to enjoy your income tax refund. Every week, employers withhold a certain percentage of your paycheck for income tax purposes. Majority of employees have too much tax withheld, which means a bigger refund at the end of the year.

Since you are stretching your paycheck, you can get that extra amount now by asking your payroll or human resource department for the new W-4 form. This is a document which employers use to determine how much money should be taken out of your paycheck for income tax filing purposes.

You can visit the IRS website and use the withholding tax calculator, so that you can see how much tax should be withheld from your salary. Complete the form, hand it back to your HR or payroll department, and receive a higher amount on your next paycheck.

2. Always pay yourself first.

With your updated W-4, you are bound to have some extra cash than what you’re usually getting every payday. Instead of using the funds to pay a bill or a debt, open a savings account instead. You might think that your salary is only meant to pay the bills, but you are working to earn a living so pay yourself as well.

Whatever extra money you are getting from the updated W-4 form, deposit that in a savings account. At the end of the year, the funds would have already earned interest and you can use the bumped up amount to buy yourself a new gadget, a weekend vacation somewhere fancy, or you can simply keep the money stowed away for future or emergency use.

3. Save on electricity with just one or two degrees.

Almost half of your electricity costs come from heating and cooling.

During the summer season, adjust the temperature by a couple of degrees and use a ceiling fan as back up to make the cool air circulate around the room.

During the winter season, still wear warm clothes inside the house so that you can turn down the temperature by a notch or two. Better yet, use a programmable thermostat so that you can save money on electricity.

11 Great Ways to Stretch Your Paycheck

4. Get rid of any unnecessary subscriptions.

Are you still paying for landline services even if you are hardly ever using it? If yes, do consider ditching the monthly fees and use your mobile phone and Internet to communicate instead. On your mobile phone plan, pay only for the service that you are using the most.

Stop paying for unlimited mobile data if you are always using public Wi-Fi connections, anyway. If you frequently place calls look for a plan that’s focused on that. You should also consider ditching your cable or satellite TV subscription to stretch your paycheck. If you have fast Internet connection at home, you can simply use streaming services to pay for premium TV content. You will save a lot of money doing so.

5. Do clip those grocery coupons from magazines.

This may sound like an old-fashioned way of saving money but surprisingly, it still works! Check out the local paper and magazines so that you can clip out coupons for your next trip to the grocery. Just make sure that you are using them only for products that you would be buying in the first place – otherwise, you will not enjoy real savings.

You can also go online and sign up for newsletters from manufacturers or shopping websites so that you can get discounts on products.

6. Brew your own coffee.

If there’s a coffee shop near your office, you might be tempted to always grab a fancy latte to get your caffeine fix first thing in the morning. The cost of these drinks do add up, so it’s cheaper to brew your own coffee at home.

Buy a coffeemaker with a timer so that the scent of brewing coffee will wake you up and perk you up in the morning. Use a travel mug to get your coffee to go, while paying a fraction of the price than what you would at a chain coffee shop.

7. If you’re a parent, know how to cut back on child care expenses.

For families with kids where the parents are both working, child care costs can eat up 20% of their overall budget.

How can you cut back on this without worrying about the safety of your child?

If you’re an employee, check with the HR department if they are working with a local child care provider. There’s a growing number of companies offering discounts or vouchers for the child care of their employees’ kids. You can also file for federal tax credit for child care expenses if you have kids who are under 13 years of age.

You can also trade child-sitting services with relatives, neighbors or friends whom you can trust to take care of your kids, and offer the same convenience to them if they need a babysitter in a pinch.

11 Great Ways to Stretch Your Paycheck

8. Track your spending.

Websites like and , or downloadable apps allow you to create a budget for the week or for the month. You can even go old school and simply track your spending by writing down what you have spent and need to spend on for the month. After creating a budget, find areas that you can cut back on so that you can stretch your paycheck.

9. Boost or save your income.

If you can’t find an aspect of your budget that you can cut back on, consider giving your income a boost. Conduct an inventory of your closet and sell the items that you haven’t worn for a long time at a garage sale or online. Do the same thing with the electronic appliances or any other extra stuff or collectibles that you have.

You can also take on a part-time job or look for an alternate income source.

10. Carefully monitor your credit card usage.

Credit cards, when not used wisely, can put a huge dent on your monthly budget with the bills that you have to pay. By monitoring your credit card usage, you can stretch your paycheck and simply use the money to be spared for more important expenses.

11. Always take advantage of any saving opportunities.

Finally, don’t hesitate to grab freebies, discounts or price slash offs which are offered by manufacturers and business establishments to lure customers.

When going out with friends, schedule your date during the happy hour so that you can get great discounts on drinks. Get those flyers distributed on the streets if they double as coupons or discount vouchers for local restaurants.

When buying a big ticket item, ask the sales staff discreetly if they will offer it on sale anytime soon.

You only need to be creative to find ways to stretch your paycheck. In so doing, you can free up a good amount of money from your monthly salary, and use it for your savings or to buy other things that you need.

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About the author

Oana Schneider

Oana Schneider is a published author located in Chicago, Illinois and was part of our team as a communication specialist and blog editor. She writes about lifestyle, family budget and has a degree in Communications.


  • These are some great suggestions for stretching your paycheck. I’ve found that scheduling meals and other entertainment outside of the home is much cheaper when planned around happy hours, special deals such as BOGO dinners/lunches and through using coupons. I’ve taken second jobs in the past when I needed an income boost, or when I’ve needed to save for something special. I think one of the best ideas in the article is about adjusting withholding levels with the IRS and being sure to pay yourself when you get your check, so you can make sure that money goes into savings or toward something important, such as paying off debt.

  • It is amazing just how much money you can save on your bills just from giving them a little thought. As you suggest here, just lowering your heating by a tiny amount can help a lot, and this means that you then no longer have to worry about getting a shock when your bill comes in. This is something that is more than worth it in the long term, and you should find that your bank balance thanks you for your actions!

  • We live off every fortnightly paycheck. Stretching 2-week salary and budgeting it is a little struggle and quite challenging.

    We have eliminated the use of our credit cards and have availed of the balance transfer with 0% interest with 2 banks. We are now paying off. We are now careful to pay cash on groceries, save for any item we eye for buying –only when money is available.

    Heating during winter these three months has been difficult to control and handle. We have firewood, and we try to minimize the use of electric heaters. Some bitter cold days and nights are hard to keep warm.

    We stock up on bulk raw food and buy only what is needed for 2 weeks of use til next payday. Our small TV has been broken for 16 years now. And we haven’t replaced it since.

    We’ve limited to eliminated using credit cards. When we do for paying bills using electronic funds transfer through credit card. And then, we pay cash immediately to avoid interest. We try not to buy things if we do not have the money.

    Decluttering our house offering to sell to buy-swap-and-sell

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