It's not easy to save your first $500, but the first step is the hardest. Here are four steps anyone can follow to begin putting money away (no matter how little you earn).

Half of my friends—even ones with good-paying jobs—live paycheck to paycheck. Saving even $500 seems like an impossible task.

I know because I used to do the same thing. It’s hard to put money into savings when you’re paying off student loans, credit card debt, and use the air conditioner during summer. Just a couple of years ago, The Wall Street Journal reported that twenty-somethings had a negative 2 percent savings rate. Things have turned around in the past two years, with different surveys reporting that Millennials are now actually out-saving older generations by a considerable margin, and socking away anywhere between 5 and 7 percent of their annual income.

Even if you’re budget is razor thin, you can and should save money for the big things in life, like a house (assuming you want one) or old age (which will come whether you want it to or not).

And if you have some savings, you won’t have to pull out a credit card when your car breaks down, or some other emergency pops up.

Here are some simple ways to save your first $500 fast.

1. Open a savings account now. Right now.

I spent a decade hustling to make more money in my career, make extra money on the side, and save money.

I accomplished the first two goals, but I never saved a dime.

Looking back, I realize why—I never had a savings account.

I guess I thought that I had the self-restraint to just leave a few hundred dollars in my checking account.

But psychologically, that’s the equivalent of buying a pint of ice cream, sticking it in the freezer and not eating it.

If you want to save, you need to open an account that’s specifically for savings.

Think twice before you open that account at your bank. You’ll be able to access the money with your debit card.

Instead, try an online savings account. When you want to access the money, it takes a few days to transfer it into your checking account.

Translation? You can’t get the money to indulge a whim.

When you open that account, deposit $20 into it right away, and set up automatic withdrawals for your next few pay periods—even if it’s just $5 per paycheck. “Get that emergency fund going right away,” says Beverly Harzog, consumer credit expert and author of “The Debt Escape Plan: How to Free Yourself From Credit Card Balances, Boost Your Credit Score, and Live Debt-Free.”

You can also look to a tool that automates your savings, like Wealthfront. The Wealthfront app, through their Self-Driving Money™ feature, puts your savings efforts on autopilot, helping you seamlessly save money for any goal you set — like buying a house, taking a trip around the world, or even just building up a much-needed emergency fund.

Figuring out how to save more might take some time. But don’t waste even more time in the interim.

2. Cut $10 a month—somewhere, anywhere—and put it in that savings account.

Even if you’re living paycheck to paycheck, you can find $10 a month.

It took me a decade to start saving because I also didn’t want to look too closely at my financial situation. It made me feel bad.

But then it occurred to me that budgeting money is no different than grocery shopping. It’s just something big girls and boys have to do.

And, unlike grocery shopping, I can have a glass of wine while I do it.

Beverly recommends that you do this:

“Write down your expenses. Then go line by line and ask yourself questions about each expense,” she says. “When you decide you can live without something, put that money in your fund.”

I did this after talking to Beverly, and realized that I never really use my Hulu subscription. At first I thought, “What difference will $7.99 per month make?”

But then I discovered I’d been paying $2 per month for an app I never use. Looking at my cable bill, I realized I was still paying for HBO, even though I stopped watching Game of Thrones awhile ago. (Every male character looks the same to me.)

Boom! There’s my $10 a month.

Then, before I knew it, I had nearly $30 to add to my savings account each month.

“Find $10 savings in different areas. If you do that in five places, you’ve got $50,” Beverly says. “Don’t get upset by small amounts. And nothing is off the table, even something that seems like a fixed amount.”

For example, Beverly suggests taking a closer look at your car payment. “Maybe you can refinance that loan and get a lower payment,” she says.

Related: See if you can save money by refinancing your car loan

Here’s another tip—don’t let anyone else tell you what expenses you should cut. “If a latte is super important to you, cut elsewhere,” Beverly says. “If you cut too much, or the stuff that really matters to you, you’ll go on a binge.”

But what if you have credit card debt? Should you pay that off first? Or fund your savings?

Beverly suggests doing both, with the majority going to your debt. “If you find an extra $50, put $35 towards the debt and $15 to savings,” she says. “And if you can transfer a credit card balance to a card with 0 percent interest, do that.”

In Money Under 30’s 6 Steps To Financial Success, we recommend saving a “bank account buffer™” of $500 to $1,000 first—even before putting extra toward your debt.

3. Turn your hobby into an online business.

If you’re living paycheck to paycheck, you’re simply not going to get ahead by cutting spending alone. You have to earn more money. And the fastest way to do that is to find a side hustle.

Whenever friends complain about being broke because they don’t earn enough at their crappy jobs, I gently—very gently—encourage them to think about ways they can earn money on the side.

They instantly start complaining they don’t have any time between commuting, working, and all the other stuff you have to do in life.

Bull.

The typical adult spends 11 hours per day playing around with digital media. Instead of posting pictures on Instagram, use some of that time to turn something you enjoy doing into a side gig.

A friend of mine, San Diego resident Cathy Parrish, always loved scrounging around garage sales, flea markets, and thrift shops for eccentric home décor. Other people told her how much they loved her knack for interior design. A few years ago, it occurred to her she could make some money off this hobby.

So she started buying unique stuff for next to nothing, cleaning them up, and marking up the prices. She’d hawk the goods at craft fairs, hold private parties, or rent a space inside resale shops. “For a few years, I made a couple hundred bucks a year this way,” she says.

But the overhead associated with brick and mortar establishments cuts into your profits. Like Cathy, you may find it’s less expensive to start a website.

You can read more here about how the founder of Money Under 30, David Weliver, started from nothing and grew this blog into a six-figure business.

Need some help getting started? Weebly and Wix are two web site builders that will allow you to run a fully-functional, e-commerce site for under $25 per month.

If you’re not selling actual products through the site—just advertising your side gig—the site will cost even less each month. If you don’t care about the URL, the site will be free.

The best part? You don’t need to know a lick of coding, or the first thing about web design to start and run an online business through one of these services.

But there are some downsides to online businesses. Cathy’s website (she didn’t use Weebly or Wix, for the record) was hacked by spammers. After spending dozens of hours trying to fix the issue, she ended up taking the site down.

Rather than risk going through that stress again, she started a store on Etsy.

Selling stuff through Etsy or eBay, rather than running your own web site, has its perks:

  • They already have a huge online audience, saving you hours of time trying to market your e-business
  • They handle security issues on your behalf
  • They only take a small cut of each sale you make

For instance, Etsy only charges:

  • $0.20 to list an item for four months, or until it sells.
  • 3.5 percent of each item sold.

There are a few other fees. For example, if buyers pay through PayPal, they’ll take a cut too—2.9 percent of the sales price and an additional 30 cents.

These fees don’t really add up to much. As this Etsy calculator shows, if you sell something for $20, and the buyer pays through Paypal, you’ll still pocket $18.22.

Of course, you have to consider shipping costs. At one point, Cathy sold large wreaths. “They are an odd size for the Post Office, so they charge more,” she says. “Plus, you have to purchase and store the boxes.”

Her advice? Sell small things.

While you can always charge the buyer for shipping, people have come to expect free shipping. According to a recent study from Accent, 88 percent of buyers said they’d be more likely to buy from a web site if they were promised free shipping.

Most importantly, to make sure you actually save any money from your side gig, link the accounts you accept money through to your new savings account, not your checking account. “I always had a business account,” Cathy says.

4. Electronically deposit your tax refund and other windfalls directly into your savings.

Side gigs have another benefit—you can often itemize deductions at tax time, which will usually result in a refund.

For example, because I’m a freelance writer, I deduct a portion of my internet bill, cable bill, subscriptions to publications, meals I have with editors, and costs associated with my home office come tax time.

For years, I had this refund electronically deposited into my checking account. And even though I was positive I’d save at least some of the money, I never did. Because it was money I wasn’t counting on, I splurged it all away before I realized what I’d done.

Finally, two years ago, I updated my account information with the IRS to add my savings account. Goodbye urge to splurge.

You can treat yourself a little with that refund. The IRS will allow you to divvy up your refund between three accounts (you decide how much goes to each).

Summary

Saving your first $500 isn’t easy—especially when you’re living paycheck-to-paycheck—but the first step is the hardest. If you do even one or two of the steps above, you may find even more savings than you thought.

Read more:

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About the author

Total Articles: 39
Patty Lamberti is a freelance writer and Professional-in-Residence at Loyola University Chicago, where she teaches journalism and oversees the graduate program in digital media storytelling. If she doesn't know something about money, you can trust she'll track down the right people to find out. You can learn more about her at www.pattylamberti.com. And if you have any story ideas, or questions about money etiquette that you'd like her or an expert to answer, email her at [email protected]