Just breaking even every month? It’s time to take charge of your financial life and stop living paycheck to paycheck. Check out this article to learn how to save money when you’re living on an already-tight budget.
When you’re living on a tight budget, saving money can seem impossible. My husband’s income fluctuates from month to month. There are times when we manage to get by with ease, but there are also times when we barely make it until the next paycheck without charging expenses on our credit cards. I used to think that saving simply isn’t in the cards for us, at least for the time being. Until one day, when I decided to religiously track our spending for the next couple of weeks. The results? Although we hardly ever afforded to buy things impulsively, I discovered there were still a few little ways to cut back in order to set some money aside.
First off, managing your money on a low income takes a lot of careful planning. You need to know exactly what money is coming in and what’s going out. Drafting a budget and sticking to it gives you a clearer picture of where your cash goes and helps you determine where you might have a chance to save. It also helps you live well within your means and avoid any pesky credit card debt.
Once you know what’s what, refine your priorities. While you likely can’t cut back on food and electricity, you can surely live without that to-go coffee you buy every morning or the weekly restaurant dinner you have with your friends. Here are a few tips on how to save money when you’re not making much. They helped us finally establish an emergency fund and escape the paycheck-to-paycheck lifestyle.
Increase Your Income
Of course, this isn’t always possible, but it’s at least worth a try. For instance, when’s the last time you asked for a raise? Prepare a speech in which you highlight your recent accomplishments and approach your supervisor. After all, you’ve got nothing to lose. If it doesn’t work, consider starting a side business. There are several business ideas that require little or no overhead – you could freelance on the side, make jewelry, start a blog, or offer your services (run errands for others, walk dogs, and so on). Taking on temp gigs from time to time will also do the trick; so will selling items you no longer use online or organizing a yard sale.
Save on Groceries
There are many ways to save at the supermarket. Start by meal planning, so you know exactly what ingredients you need to buy and you avoid wasting food. Take advantage of sales and use coupons. Buy in bulk when possible. Avidia Bank has a great article on the subject. You can check it out here. You’d be surprised with how much you can save just by comparing prices at various stores and stocking up on items when they are on sale.
Reduce High-Cost Debt
Short-term, high interest debt (like credit cards) is a big no-no, as it only brings other debt into your life. Avoid it as much as possible. If you’re already compromised, make a repayment plan as soon as possible and stick to it. Also, consider calling the creditor and negotiating the interest rate or transferring the balance to another card, with a lower one.
Look For Little Ways to Cut Back
There are so many little ways to save cash that don’t even require that much effort or sacrifice from your part. To set money aside, I and my husband started by looking for cheaper means of entertainment instead of going out once a week to hang out with our friends. We now invite them over for game nights or pot luck dinners, and we always look online to see if there aren’t any free events going on around town. We stopped driving that much and started biking more. We always brown bag our lunches for work, and we have coffee at home instead of grabbing a to-go cup on the road. Plus, we started to pay more attention at our household bills and we took a few measures to lower them.
Living on a low income is challenging, but it shouldn’t stop you from working towards accomplishing your financial goals. No matter how little money you manage to set aside, it’s still better than nothing. The next time you have to cover an unexpected expense, you will congratulate yourself for being smart enough to think ahead.