One of the hardest ways to save money is to start. However, having a plan ahead of time can be a gamechanger! Armed with a budget and the right financial resources, saving money can be a snap!
1. Keep Track of Your Monthly Expenses
This can be the most important place to start. Creating a budget simply means to track your expenses and compare them to your income. Are you living within your means? You should include every time you spend money, even on small items. These include:
- Morning Coffee
- Household Items
- Cash Purchases
- Credit Card Purchases
- Eating Out
You have two kinds of expenses throughout the month: your fixed expenses and your variable expenses. Your fixed expenses will not change throughout the month. These can be items like your mortgage payments, bills, payments for car title loans, or other set expenses that stay the same. Whether you chose to get your car title loan in Palm Coast, Florida or Portland, Oregon, the payments should be a priority for your budget.
Your variable expenses are the opposite, as they are items that will fluctuate throughout the month.
Evaluating your monthly expenses by comparing them to your monthly income is crucial to saving money. It can help any budgeter identify where you are overspending, and where you need to downsize or cut back if you are living beyond your means.
2. Start Budgeting for Savings
If you aren’t already including a dedicated portion of your income to savings in your budget, it might be time to start! You should plan for at least 10%-15% of your monthly income to go into your savings. This is just in case of job loss, cut hours, or anything unexpected like an emergency expense. By setting up an automatic transfer of your monthly paycheck into your savings, it can help establish a safety net in your budget.
3. Be Mindful of Your Habits
Your lifestyle can be a way to cut back and save money. Even if you are not living outside of your means, cutting back by implementing small changes can save you thousands a year. Take coffee, for example. If you are purchasing a cup of coffee from a retailer every workday, it can cost you over $200 a month. By changing that one habit by bringing your coffee into work, you’re already saving over a thousand a year!
4. Cut Down on Non-Necessities
Chances are, you have nonessentials in your budget that can be cut back. These could possibly be:
- Subscriptions You No Longer Use
- Cable or Cellphone Plans That Could Be Cut Back
- Excessive Reliance on Eating Out Instead of Eating at Home
Even though your cellphone plan or cable subscription may be fixed expenses, it can be a cancelled or adjusted expense. Cutting back on your plans to a more frugal or basic one can help keep your pockets full.
While eating out can be tempting, it can be quite expensive- especially if you are in a multi-person household. Cut down on eating out by limiting yourself or household to once a week to help save money in your budget.