Overspending is an easy but dangerous habit to get into and a tough rut to get out of. If you are guilty of spending extravagantly, you know how hard it is to break the habit off and think of ways to improve your financial health. As a result, how can you afford to save money when you’re already on a tight budget?
Fret not; it’s still possible! As long as you are determined to save as much as you can and cut down unnecessary costs, you will be able to achieve your financial goals.
In the sections below, we will share five tips on how you can save money even when living on a budget:
1. Cut down on every category of your monthly expenses
You might have already done this before, especially if you’re watching your pennies, but saving $5 to $10 per category in your monthly expenses and putting that money aside will help you grow your savings.
Before doing your grocery shopping, create a grocery list, and stick to it. Don’t give in to impulse buying and get only the items that you need. Furthermore, you can cut down your transportation expenses by taking public transit or even walking. On top of that, use your electrical appliances and water wisely, so you can also lower your monthly utility bills.
2. Examine your subscriptions
Another easy way to save money on a tight budget is to check your current subscriptions, such as your television and music streaming service. You may not have noticed it, but many big-name cable TV providers have raised their prices in early 2020.
Avoid going over your budget and save more by switching to a cheaper alternative. Additionally, you might want to consider getting a family subscription plan so that you can split the costs among family members who are interested in purchasing the same service.
3. Avoid dining out
Going out for lunch may seem fast and convenient for you, but not for your budget. According to data gathered in 2019, the costs of eating out are rising much faster than the price of groceries.
It may be time-consuming, but doing the grocery shopping and food preparations by yourself will allow you to save more while also making you mindful of your food choices. Preparing your food means that you personally select the ingredients that go into what you eat every day, inspiring you to make healthier decisions.
EXTRA TIP: Some healthy and cost-effective options are frozen or canned fruits, beans, and vegetables.
4. Use cash for your daily expenses
While you can leave your card to handle your rent or utility bills, it’s a smart idea to switch to cash for your daily expenses. Holding cold cash and handing it over during your purchase makes you feel that pain of paying, a concept commonly discussed in behavioral economics. However, this pain is significantly reduced in credit card purchases because you don’t see or feel the loss right away.
Paying in cash can help you curtail your expenses and keep your spending in check because the loss is visible and more noticeable. You’ll be regretful for an unnecessary purchase as soon as you see your wallet becoming thinner!
5. Pay off your debt as soon as possible
You might have been an extravagant shopper before, carelessly spending your hard-earned money on non-essential items. If you’re now facing overwhelming high-interest debts, know that not all hope is lost!
The first step is to forgive yourself and learn from the experience, and then to start paying off your debt – make it a priority. Leaving your debts to accumulate can eat up your monthly income because of the interests. On the other hand, settling your debt as quickly as possible allows you to use your money for other important payments.
Saving even the smallest amount when you’re on a tight budget may seem like an impossible task. However, the truth is it’s doable. All you have to do is to be more mindful of your cash flow and be more intentional about saving money where you can by following the tips shared above.
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