How to Stretch Your Paycheck and Make It Last Longer

paycheck jeans pocketWhen I think of different ways to make my paycheck last longer, my mind typically contemplates the little ways to save money like canceling cable TV, going without my daily latte, or cutting coupons. But while it’s true that little things can add up to big savings over time, there are other ways to extend a paycheck that don’t involve cutting back on minutiae. In other words, you could keep the cable and still not feel the pinch.

Let’s take a look at 9 ways to stretch a paycheck that a typical person might not readily consider.

How to Make Your Paycheck Last Longer

1. Increase Your Withholding Allowances

While getting a huge tax refund every year may seem like a nice bonus, you are actually letting the government use your money interest-free until they return it after you file. Most likely you could’ve been using this money instead. Or better yet, you could’ve been investing it and actually making money with it!

Basically, if you get a huge refund at year’s end, you’re having too much money withheld from your paycheck. To correct the situation, file a new W-4 form with your employer to adjust your federal income tax withholdings. Talk to your HR department or employer to make these changes and check out the IRS withholding calculator. Be careful though not to claim too many exemptions or you could end up owing the IRS a huge tax bill instead.

2. Ask for a Raise

It never hurts to ask for a raise if you think you deserve it, and sometimes asking is the only way you’ll get one. But before you ask, be prepared to state your case. Research what others in your field are getting paid by checking, itemize your accomplishments, and be ready to discuss your long-term goals at the company. A prepared employee is far more apt to get a raise than someone just casually asking.

3. Save Your Raise

It never hurts to have an emergency fund or to invest for your future. If your pre-raise salary covered the bills, put your raise towards a savings, retirement, or 529 college savings account for use later. Or maybe you’d like to take a big trip next summer – save for it now so you aren’t tempted to use too much plastic when the time comes.

And if you’re investing for the long term, your “raise” is doing double duty by actually making you more money through investment earnings and gains. If you’re able to, investing in a well-rounded portfolio can be an excellent way to seriously stretch your paycheck.

4. Start Budgeting

Budgeting your money can seem like a lot of work. But by setting a budget for each paycheck or month, it’s easy to see where your money goes, which in turn makes it easy to adjust your spending habits. Budgeting can also be a great incentive to try out new things

For example, I really can’t do without my morning latte, but I also can’t afford the $80/month it costs me at my neighborhood coffee shop. Scary, huh? By budgeting, I saw where my money was going (to lattes) and that it actually made sense for me to buy a good home espresso machine (for around $80) and avoid the coffee shop. Now I save money daily, still get my latte-fix, and am an excellent barista. Take a few minutes to learn about and make a budget at free budgeting websites like

earnings statement paycheck

5. Get a Part-Time Job

When I was a kid, my dad worked a part-time gig at the local bowling alley after his full-time job. Once he was able to support his family with his primary job alone, he quit the alley. But he did whatever he needed to make ends meet until then.

If your income isn’t enough, look into finding a second part-time job. You could find something with a local business, such as a hardware store, coffee shop, or grocery store. These days there is a wealth of legitimate ways to make money from home as well. Even just a few extra paid hours a week can go a long way towards helping out with your finances.

6. Increase Insurance Deductibles

How high are your auto, home, and medical insurance deductibles? Do you know? A deductible is the portion you’ve agreed to pay in the event of an insurance claim and you could be paying a higher monthly premium to keep them low.¬†Basically, the higher the deductible, the less premium you pay for insurance.

I keep my car insurance deductibles at the max for my state which is $500; in California, I always kept them at $1,000. This was because it made my policy cheaper and I had a savings account set aside with the deductible amount in it.

If you want to stretch your weekly paycheck, call your insurers tomorrow and ask how much you can save if you make your deductibles higher. That said, it’s important to have the deductible amount on-hand should an accident happen or health concern pop up.

7. Stick to Cash for Purchases

It’s very easy to spend money you don’t have when you don’t use credit cards wisely. I know because I have done it myself. The bill doesn’t show up for a month and no cash is taken out of your checking account. These items seem almost free sometimes in our minds, but they usually come with high interest rates and, if left unpaid, can result in high balances. Use cash or a debit card linked to your checking account so you can feel the impact of how much you are spending. Your paycheck won’t go very far if you have to pay high interest amounts on credit card balances.

8. Refinance Your Mortgage

Interest rates are currently at or near all time lows. Are you taking advantage of it? Refinancing can save you a ton of money, both on a short-term and a long-term basis, by lowering your monthly mortgage payment and reducing the total amount you spend to pay off your home. By speaking to your local banker or institutional lender, or by checking, you can see current rates, estimate how much you can save each month, and discover tips and advice on refinancing.

9. Start a Home Garden

Everyone loves a fresh garden salad, right? But why pay $10 for one at your favorite restaurant when you could have all the fix-ins in your own backyard garden? For an initial investment of a few dollars in seeds, you could be growing your own lettuce, tomatoes, cucumbers, and carrots. It doesn’t take much time or work to start a home vegetable garden, even if you don’t have a green thumb. Check out Seeds of Change and Botanical Interests and buy organic and non-GMO seeds that will grow healthy plants for you and your family.

Final Word

So there you have it, my nine ways to make your paycheck last longer. Each of these practical yet effective ideas has the potential to help stretch your income farther every month.

What other tips do you have to make your paycheck last longer?

  • Karmella

    I need a good cash tracking system, because cash just kind of slips away from me. I tried getting out $500 cash (about 10 times what I would normally have) as a cash only experiment, but looking back I can’t account for it all – I tried using an app, I tried writing it down, it just is not working. But I should give it another try, because you make good points.

  • Stephan

    Love the money accountability buddy. It works in everything else, why wouldnt it work for money. I think this would be especially great for couples, and I am going to try and get my partner to go along with this so both of us can fix our spending habbits and improve our savings habits!

  • Ariel

    @Karmella Ever tried an envelope system? Might be up your alley, I am thinking of trying it. More info on the general principle here:

    • Karmella

      Hi Ariel – you know, I have heard about that system but never actually tried it, and I think you might be right, it could work for me. I am going to the bank today and I will get out cash and pick up some envelopes – maybe if I keep the receipt for each purchase in the corresponding envelope with remaining cash that would help me solve some issues…


  • Debt

    Great tips. I particularly like the one about saving the raise for other purposes like retirement and college savings account. I’m just in my early twenties and I honestly wouldn’t have thought of that idea. Thanks for sharing that info. I have to follow that advise when the time comes.

  • KMaria Mosley-Settles

    These last few years have been rough. The trend is now to neglect COLA and raises and make the employee feel grateful just to be employed at all. Even big companies like GE who can afford raises are following said trend. Montgomery County Government in the DC area is also following suit. They take in $40 per camera ticket all over the area in droves but still has no money to give their employees steady raises or COLA adjustments. They threw us a bone of $2K as a one time SHUT YOUR MOUTH bonus which came and went to pay bills so now we’re back where we were with our stagnant pay and wondering what will come down the pike for us. Thanks for the tips, though. Maybe I will grow a garden out back of my town house.