How to save money on a tight budget.
1. Keep track of your expenses
The first step to saving money is to look at where your money is going. Freedman says it’s easy to lose track of your finances. You’d be surprised how small amounts of money can slip away. Even a few dollars here and there can really make a difference.
Keeping track of your expenses is as simple as saving all your receipts and writing down each of your purchases. Even that 99-cent coffee they gave you while you filled up your gas tank counts.
Once you start recording all your purchases, take an inventory. Maybe it’s a matter of cutting back a bit. Or maybe you’re spending more on certain categories than you realize, and it’s time to be more careful.
Freedman suggests keeping a visual reminder of a financial goal you want to save for, such as a vacation or a new car. That way you will remember that the money you spend now is money you cannot save towards that goal.
2. Find a support system
Navigating the reality of being in a new country is hard enough without having to worry about money. So finding people who can support you and help hold you accountable will motivate you to save.
“We often overlook how powerful the positive influence of a friend or family member can be,” says Henderson. “For most immigrants, family is a big part of why they decide to come to the United States, and using that connection for good is powerful.”
To find a support system, start telling your family and friends about what you’re trying to accomplish. You can even ask them to check in with you periodically to see how your goal is progressing.
3. Create a little weekly savings challenge
Starting with a big savings goal is great, but it can also make you feel overwhelmed and you might abandon your goal altogether.
It is preferable to start small, both in dollar amount and timeline. A weekly challenge allows you to see your short-term financial habits. It also allows you to see the effects of changes in your habits. Then as you progress you can increase your challenge.
For example, start saving $1 and put it in an envelope, then increase that amount to $2 the following week. Keep increasing that amount until you reach a number that is comfortable for you to save each week.
Seeing this amount add up—no matter how small—is proof that you have what it takes to save.
4. Take advantage of the pantry
Most people have items in their fridge or pantry that they don’t know are there. Challenge yourself to use everything in your cupboards, fridge, and freezer before you head to the store.
Freedman has managed to meet this challenge with great success, although on some nights he has eaten strange combinations of foods.
“But it doesn’t matter, they’ll feed you and it’ll be one more night without having to go shopping,” he says.
Take the money you save from your shopping budget and put it in a separate savings account.
5. Use a budgeting tool
There are plenty of free tools available to help you keep track of your money and budget. That way, you can stay on top of your finances and set aside money to save. Banking apps also include budgeting tools these days.
Henderson suggests doing a search online and trying out a few of these tools before settling on your favourite.
Basic Guides to Exchange Rates: 12 Answers to Frequently Asked Questions
Renew your Finances: Three steps to start over
How To Change your Address in the US
A Guide to Inflation and What Causes It In the United States
Why do Health Care Costs Continue to Rise in Latin America
6. Use cash
Using cash allows you to see where your money physically goes. Also, you can’t spend more than you have, unlike with credit or debit cards (if overdraft is an option at your bank).
Using cash will also help you be more mindful of when and where you spend money.
Some people like to categorize their spending by placing various amounts of money in budget envelopes. For example, you have $100 set aside for groceries, and you put that amount in an envelope. Once that money is gone, it’s gone.
7. Examine your biggest expenses
While it’s great to cut costs in all areas of your budget, cutting back on your biggest expenses can help you save money faster.
Take a look at the biggest expenses most people have, like housing, food, and transportation. Can you negotiate your rent or find a less expensive place to live? Or can you reduce the occasions you eat out for the next few weeks?
Some suggestions on how you can reduce your major expenses include:
Negotiate a lower rate on your car or rental insurance plan;
Change your mobile phone company or change your plan (to less data, for example); Y
Negotiate a lower rent if you offer to do some repairs on the landlord’s property.
If you are able to make a cut, take what you would have spent and put it directly into your savings.
8. Sell things you don’t use
Look around you to see what items are not being used that have any value. You can take the profit from what you sell and use it to open your savings account.
Gather your items and start looking for websites, apps, or local stores that might pay you for them. eBay is a popular example.
The most popular items include books, electronics, and even certain brands of clothing. The amount you will get will depend on the demand for the item and its condition.
9. Make comparison shopping a habit
You’d be surprised how many stores have different prices for the same items, online and in your local area. Before you buy, take some time to look online to see where you can get the best deal.
There are also browser extensions and apps that look up coupons and do the comparison shopping for you, which helps when you’re short on time. Inbotta is one of these applications.
10. Invest in yourself
Learning about personal finance and ways to increase your marketing skills will help you in all areas of your life. Maybe that book you picked up at the library can teach you how to negotiate a higher salary, helping give your tight budget a break.
Even learning more about cooking can save you money eating out. Remember to make yourself and your future a priority.
Why is it so hard to save money?
If you have a fairly low income, it’s understandable that saving money feels impossible. Your job options may be limited for now as you are settling in a new country. Not only that, but you have to figure out how to manage your income in order to pay for basic necessities.
Donna Freedman , a financial journalist and author of Living Large on Small Change, for the Short Term or the Long Haul, suggests that struggling with everyday issues makes planning for the future difficult.
“When you live on barely enough to cover your needs, it can feel like you spend all your time putting out everyday fires,” he says. “You don’t feel like you have ‘extra’ money, so you don’t feel like you can save for emergencies and it’s very stressful living this way.”
Even if you earn more than enough to cover the bills (meaning income isn’t the reason you can’t save), your budget may be tight. For example, because you want to help your loved ones, you send a large part of your salary home.
Scott Henderson , a certified financial counsellor, says that how you were raised can also affect how you view savings.
“If you grew up in another part of the world where it’s not customary to save money, it can be difficult to start saving, especially if none of your friends or family usually save,” he says. “Based on my experience working with many individuals and families, this can be quite a challenge.”
For more job updates and recommendations, visit mextechy.com.ng
