When you have financial goals, learning how to save money is at the top of your priorities. However, doing it on a tight budget may prove to be challenging. After all, it’s already hard making your way around your limited finances, and now you’ll have to adjust it even more.
But, saving despite a tight budget doesn’t necessarily mean that you’ll have to set aside a hefty amount for your savings account. Instead, you can simply create some minor changes here and there so you can set aside money, little by little, for your future. Here are a few easy ways to do just that.
Switch to cash.
Using cash for your daily expenses provides a more definite limit to your expenses. But, of course, paying your bills, such as rent via cash, may not be practical. That’s why we only recommend switching to cash for your daily spending since it helps you become more aware of your choices. Some examples include groceries, entertainment, shopping, and eat-outs.
Probably the only hurdle when it comes to this method is when you’re tracking your spending. Here, you’ll have to keep receipts and jot them down manually.
Cut back on big expenses.
It’s time to take another close look at the big expenses in your budget. Through it, you may notice how your car payment is taking too much out of your budget. Maybe it’s time to find another cheaper place or find a roommate to help you with the rent. If you can find a way to keep your monthly bills at a lower cost, you have a better chance of increasing your savings.
However, if you can’t afford to cut down your big expenses, then cutting bits from every category of your budget may just work. For example, you can cut back expenses on unnecessary items from your budget or drop off a few things on your grocery list. Other methods include taking public transit or walking (if feasible) instead of spending on gas.
Cut back on eating out.
You don’t necessarily need to put a stop to dining out immediately. It’s an excellent way to treat yourself and bond with loved ones. However, try eating out less. Realise that eating last night’s leftovers costs less than dining out.
Other than limiting your trips to restos and coffee shops, you may also consider cutting back on meat and other expensive items on your list. But, again, this does not mean that you’ll have to stop eating meat. Instead, you’ll just have to be creative and find other meals that will not cost you but will still provide you with the necessary nutrients. Again, try creating a meal plan and set a budget for the ingredients.
Cancel some subscriptions.
Do you have gym memberships, music, television, newspaper, cloud, and other subscriptions? Then it may be time to cancel some of those. Out of all of them, which one do you use the most and are there alternatives for others you don’t want to let go of? Say you have a gym membership and you don’t want to stop your fitness routine; there are many free online sources that you can use to continue working on your fitness.
You may also choose not to cancel your entertainment subscriptions. Try and pick one, then switch it with another every month. You can enjoy Netflix this month, then maybe Hulu the next.
Take the no-spend challenge.
One of the easiest ways to kickstart your learnings on how to save money is doing the no spend challenge. This method allows you to reevaluate your postponed purchases. Let’s take a quick look at how it works:
First, set a period when you won’t be spending any money. Then, define the necessary allowances that you need for that period. This includes gas, food, bills, etc. Next, determine the non-essential items that you definitely should not spend any money on. These are new clothes, eating out, online shopping, and more.
Now that you know your essentials prepare them ahead of time. You can stock up on groceries and, of course, always leave a budget for an emergency fund. It’s also essential to keep your family in the loop so that they can support you.
The hardest step is to avoid temptation, especially when you see ads catered for your interests on social media or a sale. Finally, to give you motivation, decide on where all the unspent money will go. Will it be for your savings account, emergency fund, or paying off loans? Jot them down and keep them in mind when temptation goes your way.
Set a budget for yourself.
Always set an allowance for yourself. Otherwise, you’ll be stretched thin and risk yourself getting on a spending spree. So, try and set a budget that you allow yourself to spend on. These are guilt-free expenses you can use to have fun with your loved ones.
Create goals and always track your spending.
The keys to learning how to save money are your goals and always keeping track of your spending. The goal is your motivation to stick to your budget. Meanwhile, tracking your expenses will help you see whether you are doing it right and if you need to make some adjustments. This also doesn’t necessarily mean that you need to keep track of ALL your expenses. Instead, you just need to track your general spending so that it won’t burn you out so much.
Learn How To Save Money with Professional Advisors
Learning how to save money is just one of the many financial management techniques that you do to have a more stable life in the future. That’s why to become more knowledgeable in this area, let certified financial experts help you.
As finance experts, Raeburn Advisors will provide you with financial advice and practical recommendations when it comes to your saving goals. Contact us today to schedule a confidential and commitment-free session.