7 Ways to Stretch Your Money and Paycheck

Woman depositing her check electronically
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Who wouldn't want to wave a magic wand and suddenly have enough money to cover all their bills, living expenses, and debt payments, and still have enough money left over for fun?

While getting a raise or a higher-paying job may not be realistic for you right now, there are ways you can stretch your money to cover more of your living expenses. Learn how to embrace a frugal lifestyle with these easy ways to stretch your paycheck.

Learn to Budget

Budgeting isn't the most exciting thing in the world. But it's important to remember that if you carefully plan how you want to spend your money, you will have more money to spend on the things you want to.

A budget is one of your strongest money management tools. Planning ahead and keeping track of each dollar that you earn—and spend—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.


Budgeting can help you stretch your money, especially when an unexpected event or crisis comes up.

Look at Your Withholdings

A flexible spending account (FSA), monthly retirement contributions to your 401(k) or IRA, reduce your taxable income, which can help you find a few extra dollars 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 (FSA) allows you to set aside money for eligible healthcare or childcare expenses with pre-tax dollars, thus 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 these funds before your annual deadline, you will forfeit them.

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.

Shop Around

You likely pay a monthly cell phone, cable, and car insurance bill. But it's worth shopping for a better rate on these monthly expenses. Remember, new customers are offered better deals than existing customers. If you have a contract, then you should shop each time your contract is up for renewal.

Shopping around can lower your monthly bills without much work, and make your money go farther. Additionally, you may consider reducing cell phone's data plan or cutting back on cable to save money.

Avoid Debt

Another way you can make your money go further is if you do not waste money on interest payments on debt. 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.

Split Costs When You Can

In your 20s, buying bulk does not usually make sense. If you are single or in 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.

Look for Free Activities

Take advantage of any free activities or services that you can. Your library is a great place to borrow books or DVDs or even books on tape. This can save you a lot of money in the long run.

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. 

Use Your Bonuses Wisely

If you receive a bonus, you shouldn't use it to cover your daily expenses and 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 financial goals, such as buying a home or saving for retirement. It is important to create a spending plan for your bonus so that you use the money wisely. Use these tips to find extra money in your budget to put toward your long-term financial goals.

Updated by Rachel Morgan Cautero.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Internal Revenue Service. "Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans," Page 16-17.

  2. Internal Revenue Service. "401(k) Plan Overview."

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