Saving Money While on a Budget
Income in, expenses out. Rent, groceries, transportation, utilities, cellphone – what we earn normally ends up flowing to these main expense categories throughout each month. And if you jotted down on a piece of paper all your income and then a list of all your monthly expenses, you might find after subtracting one from the other that not a lot is left over for savings.
Living on a tight budget is never easy. You might assume saving money is not possible on such a tight budget. When budgeting closely and using all available income to pay bills, expenses, and debt repayment, it might feel like stashing away some cash for the future is not something you can afford to do.
It is important to remember that having some sort of savings strategy is critical. With no emergency fund or savings account, you could be leaving yourself vulnerable. If something unexpected happens, and you have no savings, you could end up unable to pay for a sudden expense. This will mean that you will end up having to take on debt to make ends meet, which could lead to financial trouble in the future. If you are on a tight budget right now, you do not want to find your budget eaten up by high interest payments going forward.
The good news? There are ways for you to put some money aside, even if you find yourself on a tight budget. Here are a few ideas which might help get you saving:
Determine Which Expenses You Can Negotiate
It can often be tough to find places to shave expenses when you are living on a tight budget. However, one strategy that might help is to look at your spending and see if there is anything you can negotiate. Obviously, rent is a non-negotiable expense, but some of the utilities could be negotiated. Cable and internet packages, phone plans, and various subscription services (such as HBO, Disney+ and Amazon Prime) are all potential places to start. You do not have to cut these services entirely, but you may wish to make some adjustments where possible.
For example, do you find yourself using only a portion of the monthly data allocated to your cellphone? If so, you might be able to downgrade to a cheaper phone plan (or switch providers entirely) and save money each month. If you are paying for cable channels you never watch (some people get sports channels but are not sports fans, for example), consider switching to a different (less expensive) cable package. The same is true for music and movie subscription services. Many of us subscribe to several different services, but you may not end up watching or listening to everything you are paying for. If you find you are not using a service or option fully, reach out to the service providers and ask for an adjustment to your subscription plan.
Start Cooking at Home
Eating out at restaurants can be expensive. And during the past 18 months (during the pandemic) going to restaurants was not only expensive, but it also just was not safe to do so most of the time. Many of us turned to cooking to continue eating healthily. Not only will you find you can save quite a bit of money by cooking your own meals, bringing leftovers in your lunch to work (instead of buying fast food), you will hone new skills in the kitchen that will serve you well for years to come.
Cooking for yourself does not have to be complicated or time consuming. There are so many different recipes to be found online (and dozens of cooking shows to watch and learn from) and many recipes are quick and easy. Start your culinary journey with a few simple-to-make dishes, do some meal prep in advance to save time throughout the week, and hopefully you will also begin to see a drop in your spending on food over a few months. Grocery stores do not require tipping (which is 15% to 20% right there) and it is always cheaper to make healthy, delicious meals at home than paying a restaurant to make them for you. The savings in your budget can go straight into your savings account.
Review Your Utility Bills
Have you ever sat down and reviewed your utility bills? Most of us can certainly save money each month by being more energy efficient. Adjusting the temperature a few degrees warmer in the summer and colder in the winter could be barely noticeable to us all but this change can make a big deal when it comes to the heating and cooling costs in your budget.
Electricity usage is another area you can find some savings. If your electricity provider charges different amounts depending on the day of the week and time of day (often called “time of use billing”) find out their schedule and do energy-intensive chores when electricity is less expensive. For example, this could mean running a washing machine and dryer, or a dishwasher, on evenings and weekends, rather than during “prime time” in the middle of a weekday.
Look for Free Activities
If you have already trimmed your entertainment expenses, you may need to find some free activities in your area to supplement the drop in subscription content. Turn to your local library (a valuable resource) where you can now borrow more than just books — and at no cost at all. Most library systems now offer a host of DVDs, music, eBooks and more. These free options can be a wonderful way to entertain yourself while giving you some extra cash to put in your emergency savings fund. Free Android and iOS apps such as Libby by Overdrive (which link to local libraries and allow you to reserve popular e-books, music, and movies) are ideal for accessing content and are supported by a variety of computer platforms so you can download the content to your phone, tablet, or computer with ease.
Remember, every little bit counts when you are working with a tight budget and need to find some extra savings. If you follow even one or two of our suggestions here you could start saving some real cash each month, which you can then stash in your savings account or emergency fund.
And if, after reviewing your budget and scaling down some of your monthly expenses, you find that you are still struggling, there is help available. Please CLICK THE FREE CONSULTATION BUTTON, below, or give us a telephone call today to set up a no-obligation meeting with one of our licensed Farber professionals. We are here to help you.