Merely recognizing that saving is important amounts to nothing if you cannot take the required practical steps to actually make it happen.
Although it is easier said than, especially when you are living from paycheck to paycheck, saving money is the only way out of this financial stalemate.
Let us help you with these five tips to save money when finances are really tight. You can save $1,000 in three months if you simply follow these five steps.
Track your spending
Learning to track your spending is an important first step in your journey to save money. If you happen to be like the one-third of your fellow Americans who have a budget, pat yourself on the back.
If not, it is time to maintain a meticulous record of your monthly cash flows, and take a hard look at your regular expenses such as utilities, internet, cable TV, shopping, entertainment, and transportation. Collect receipts for all your purchases, download an expense tracking app, or simply maintain a spreadsheet to record what you spend.
Automate your savings
Based on your monthly expenditure and spending patterns as gathered from the data you collected, figure out how much you can save on payday. Set up auto-pay from your checking account into your savings account.
Setting up regularly scheduled transfers into your savings account is the best way to make saving a compulsory but effortless habit. And if you are disciplined enough to not give in to the temptation of taking out from the pot, you will see your money grow substantially.
Learn to be frugal
When you start tracking your spending diligently, you are more than likely to identify any unnecessary regular expense or non-essential spending. It could be the items you keep buying online that you do not really need, or food that you keep on pushing back deep in the freezer while you restock it.
Start by cutting down all your non-essential expenditure for a month. It might prove to be difficult at first, to curtailing spending, but the results would make it worthwhile.
Pay off debt
Debt interest payments deprive you of your income, which in turn makes saving money more difficult. Debt is a reason why you are unable to save. Pay off your debt to attain true financial independence.
High-interest debt can be debilitating and needs to be tackled first, if you have multiple debts. This will help you save money on interest charges and high fees. Cutting down spending can free up money to repay debt, and repaying debt frees up money that you can then divert towards savings.
Save small and watch it grow
Little things can quickly add up, and much faster than you think is possible. Once you are able to build a small nest egg with your savings, it creates momentum of its own.
Try to see how much you can save each month by collecting all your loose change. Use round-off apps to save money while shopping with cards. Apps such as Chime round off each spend on your card and move the spare change to savings.
If you use a round-off app for a year and see the results afterward you will be pleasantly surprised with the amount that you can manage to stash away.