Specific Money-Saving Strategies
How to save money on a low income?
Strategies to Save Money In today’s world economy, saving money has become very important and challenging at the same time. Whether you’re looking to build an emergency fund, save for a big purchase, or simply reduce financial stress, implementing effective money-saving strategies can make a significant difference.
In this blog post, we explain Top 5 tried and tested strategies to help you save money strategies better this year
Saving a Percentage of Your Income
Strategy Number 1: Save 10% of Your Take-Home Pay
Make this a non-negotiable. Often, we have a kind of backwards mentality with this, where we do all the budgeting for the things, and then we throw savings at the bottom of the barrel. Switch it up and put 10% minimum at the top of your priority list.
So, let’s get specific. If you have a take-home pay-off, say, $3,000, you actually have $3,000 that hits your bank every single month. You’re going to do 10% of that. 10% of $3,000 is $300. So, you’d be looking to save $300 every single month for your take-home pay. Now, if we break that down even further, if your goal is to save $300 a month, divide it by four because it’s four weeks, mostly in a month. That’s $75 a week.
What have you got to do to save $75 a week so that you’re saving up 10% of your take-home? Do you go out to eat once or twice a week with your spouse? That could be it right there. That’s the money. There’s the $75 Cut it out for a bit. If you’re already not going out to eat, you’ve got to find a way to prioritize this 10% of your take-home so that this is just a no-brainer. You make it a priority. Don’t wait until the end of the month to see what’s left. Factor this in at the beginning.
Common areas to cut expenses:
- Dining out
- Subscription services
- Cable or satellite TV
- Impulse purchases
- Utility bills (by conserving energy)
Please note, these strategies to Save Money only work if you are 100 percent in it and pay attention that I am saying a minimum of 10%. If you are earning way more, and you spend below your means, try to increase the margin between what you earn and what you spend as much as possible. If you can save 20%, 30%, I know people that save up to 50% of their take-home. I know, right now, to some of you, that might sound impossible.
Building an Emergency Fund
Strategy Number 2: Stockpile one month of expenses into your checking as soon as possible.
How are you going to do that? Follow step number one. If you’re going to stash away $300 a month times 12, by the end of the year, you’ll have saved $3,600. Now, some of you might be thinking, “Oh, I need to save more than that.” Okay, great. You’re going to come up with a plan to get a higher savings rate. But let’s say right now things are tight and even that 10% is a real push. Think about at the end of the year, if you keep plugging away at this, and you stay consistent, you will have saved $3,600 that maybe you’ve never had available before.
When you establish this stockpile of money with one month of expenses, things will be a little less stressful in your life. You blow a tire? Ah, not the end of the world. Unexpected vet visit? Ah, not the end of the world. When you’ve got that solid stash of one month of expenses, you can take that weight off your shoulders a little and breathe.
Choosing Your Circle Wisely
Strategy Number 3: Choose wisely who you spend most of your time with.
Best Strategies to Save Money? You want to save money, and you want to live below your means. It would be wise to surround yourself with those that are encouraging of your goals, are supportive, and those that don’t tempt you to spend more than you make when you are struggling to save money. Because other people don’t have the same goals as you.
To Save Money, you need to choose the right friends
If you’re a person, that’s trying to save money and say you’re in a financial crisis right now, and you keep spending time with those that are just throwing the money everywhere, maybe they’re highly in debt. You’re not going to move much further ahead in your finances if you continue to spend a ton of time with people that are fiscally irresponsible. And that goes for picking your partner, your spouse. That’s a vast deal that you pick somebody that has similar goals to you that you don’t have to fight with for the rest of your life over.
Filtering Influence and Managing Time
This is not to say you can’t have friends and family members who don’t have the same aspirations as you. Of course, you can, and you can spend some time with them. But if you’re genuinely trying to get serious about your goals, you need to either find a technique to filter out that influence that’s coming at you all the time. Or spend just a little less time with the folks that make you spend out of control. Be selective about who has access to you and your energy regularly.
Strategies To Save Money: Focus on Solutions
Strategy Number 4: Focus on solutions, not problems.
Here are some suggestions for creating a budget:
- List all sources of income.
- Track expenses meticulously.
- Differentiate between needs and wants.
- Set realistic savings goals.
It is so easy to go into this kind of deprived, whiny, compliant attitude when things are not going our way financially. But as Marie Forleo taught us, everything is figureoutable.
This book will help you pick the best strategies to Save Money
If you are ever in the mindset where you’re like, ‘I don’t know what to do.’ for finances, I’m going to tell you, it’s typically one of three things that are the solution. Either earn more, spend less, or do both. Think about it. In the end, that’s what it’s going to come down to.
Do you need to make extra money? Do you need to spend less money? Or can we do a combination of both to solve this problem? Don’t get trapped in difficulties. It’s very easy to do. Focus on solutions.
The Importance of Debt Management
Step Number 5, and this is extremely specific: Avoid debt at all costs.
There’s this wonderful book that I have read. It’s ‘The Simple Path to Wealth’ by JL Collins, and one of my favourite books.
JL Collins says, avoid debt at all costs. He thinks bearing debt is as enticing as being covered with leeches and has much the same effect. I realize that’s really dramatic, he thinks, strongly, about no debt. In the book, JL Collins is pointing out that if you have 3% interest on any loan or less, that one makes sense to not pay off the debt, like a mortgage.
Best Strategies to Save Money This Year
When you think about the typical credit card interest rate, I would say right now it’s between like 21 and 25%. So, let’s consider a scenario: say you have a $1,000 loan, and you’re paying 5%, that’s like $50 a month that you’re paying on that $1,000. Consequently, you have a $1,000 debt, you’re paying $50 additional dollars a month just to hold that debt.
Take full control of your finances with these budgeting apps. Pick what you see is fitting your lifestyle: it’s easier than you think, find the one that fits your lifestyle and money-saving goals. With the right tools, you’ve got this.