‘Save money’, they say. Well, it’s not as easy as it sounds.
We all know how much effort it takes to save some bucks, especially if the earned income is low. Saving money requires smart planning – to maneuver around your expenses – and determination to stick to what you have planned.
Listed below are the top tips on how to budget money on low income
How to budget money on low income
Make a budget
Although it seems daunting, it is a blessing in disguise. Budgeting will help you allocate money for all your necessities and the extra endeavors. Make a list of recurring bills, subscriptions, and the inevitable monthly expenditures. Once you have a figure, keep some for emergencies, and the rest will be your savings each month. Saving money on a budget is a very safe and reliable option.
Cutting your housing cost
Another way of saving money is to reduce your household expenses. There are tactics you can use in this regard:
- House rent takes away a big chunk of your earnings, so renting a smaller apartment or house will make the most significant difference.
- Real estate prices are dependent upon the location where you reside. A better option is to rent an apartment or a house in a less posh area
- If you have a big house, you can let out some rooms to minimize your housing cost.
- Always make a grocery list before you go shopping and stick to it! It will ensure you don’t buy unnecessary items.
Pay off your debt
This might not seem like a great tip right now, but it makes sense. Debt dents your savings. It also puts a strain on your mental health. It is better to prioritize paying a small amount in debt every month. Once you’ve paid off all your debt, save money for your future.
Avoid or limit dining out
How much you spend on food is another essential factor that affects savings. Food businesses are booming, and millions of people are eating out. Avoid eating out frequently, if you want to save money.
For instance, try to calculate how much money you spend to dine out monthly, and then compare how much it would cost to eat at home. If you want to, you can dine out once or twice a month. That’s enough. Practice it for sometime, and you will have saved a good amount of money for yourself.
Next time you see McDonald’s, remember, there’s food at home.
You can save a significant amount of money if you avoid expensive entertainment.
Leisure activities are an integral part of our lives. Just because you’re trying to save some extra bucks does not meet you can’t have fun!
Here are some examples:
- Want a dinner date or a small party? Host a dinner at home rather than going out with your spouse or friends
- Go to a movie matinee
- Go hiking
Adopt a Cash envelope method
This method helps you keep track of your spendings. The cash envelope method involves dividing your cash for weekly use. Take out one envelope every week and spend the money until the next week. This practice helps you identify your actual expenditures.
If you are unable to track your expenditure, use a cash envelope method to help you with budgeting.