Top 7 Tips to Save Money When You’re on a Budget
Are you trying to save money but struggling because you’re already on a tight budget? Don’t be too hard on yourself. Many people struggle to save money, regardless of their financial situation. In fact, only15 percent of Americans say they’re definitely saving enough money.But don’t be discouraged by this statistic. The reason many people struggle to save isn’t that they don’t have the means–it’s simply because they don’t know how to do it! To learn how to save money while on a budget, read on.
1. Be a Smart Shopper
Think about your routine when you go to the grocery store. You probably buy the same brands you always have without giving it a second thought.Well, it’s time to put more thought into your shopping and start doing things a little smarter. Whether you’re buying food, clothes, or appliances, always look for sales online and for coupons online or in the newspaper.For food, switch from name brand to generic. The quality and taste are often very similar if not the same. As far as clothing goes, check out thrift stores or try to shop out of season so prices are lower.
Then, take it a step further by comparing the original price to the price you paid by shopping smarter. Take the leftover money and transfer it to your savings account.
It may not seem like much in the beginning, but those dollars and cents will quickly add up.
2. Switch up How You Save
For most people, saving means buying what you need for the week or month and then transferring what’s leftover into your savings account.
Well, try doing it in reverse instead.
As soon as you’re paid, put the majority of your paycheck into your savings account. Then you can make a recurring weekly transfer to cover all your necessary expenses.
It may seem odd at first. But this will help prevent you spending extra money that’s just sitting in your checking account that you could be saving instead.
3. Make It Automatic
Sometimes the seemingly simple act of transferring money over to your savings account is enough to make people forget to save.
To make saving money something you don’t even have to think about, set up an automatic transfer to your savings account. You can start with something small, like an automatic transfer of $50 a month, then gradually increase it.
Also, if you haven’t already, enroll in direct deposit through your work. Set it up so that part of your paycheck goes to your savings and part goes to your checking.
These are easy ways to save without even thinking about it.
4. Use Cash for Daily Expenses
There are some bills, such as your rent or utilities, that simply aren’t practical to pay in cash.
But switching to cash for other expenses, such as groceries, entertainment, and gas, can seriously help you cut back on your spending.
Withdrawing a certain amount of cash weekly or bi-weekly puts a hard limit on your spending and will help you cut back on unnecessary expenses. This may mean putting back that Ben and Jerry’s at the grocery store or watching a movie from home instead of going to the theater.
And while these luxuries may be hard to cut out in the beginning, soon you will learn how to stretch your dollar so you can afford little luxuries every once in a while.
5. Categorize Your Budget
Categorizing your budget can help you realize what areas you’re overspending and where it’s possible to cut back more.
For example, by categorizing, you may realize you’re doing great with your grocery bill but that your entertainment budget is out of control. Then, you can look into why. Maybe you’ll realize that instead of going to 3-5 movies per month, you should be limiting yourself to one to save more money.
Take a look at every category and try to find a way to cut back $5- $10 in each one. Maybe from your utilities, you could cut out the cable or turn off the air conditioning when you leave the house.
To cut down on your gas bill, you could try carpooling to work, taking the bus, riding your bike, or walking. A few dollars here and there in each category will go a long way.
6. Cut Back on Big Expenses
Oftentimes, when we talk about ways to save money, we talk about little things we can do here and there.
But it’s also a good idea to look at your big expenses as well. For example, could you move to an apartment with cheaper rent? Or is moving in with a roommate an option? If you live in a big city, could you sell your car and take the bus instead?
Making big expense changes should be your last resort. But remember that many of the big changes you can make are temporary and will help significantly.
7. Make More Money
Seem obvious, right? But how can you make more money when you’re already working a strenuous 9-5 job?
It’s easier and less time-consuming than you think! Here are just a few ideas to pocket some extra savings:
- Pick up freelance jobs online: Writing, graphic designing, consulting– there are tons of opportunities out there!
- Scour Craiglist: Craiglist has tons of side gigs for good money such as construction work, participating in market research studies, or bartending/serving events.
- Sell your things on eBay: A great way to clean out clutter.
- Rent out your spare room/couch on Airbnb: Yes, budget travelers will pay to stay on your couch!
- Have a garage sale: Sell off all that junk in the garage or attic for extra cash.
These are just a few ideas that are simple to do and that can all be put towards your savings account. For more in-depth info on making money on the side, check out this article.
How to Save Money: Wrap Up
By following these tips, you should start seeing your savings grow–no matter how tight your budget is.
For more tips on how to better handle your finances and keep your spending in check, be sure to check out our blog.