Everyone wishes they could save more, even those who are already in a savings habit. Whatever your financial goals in the short and long term, having some form of savings can make things easier and provide financial support when you need it. However, if you are on a tight budget already, it may seem like it will take forever to achieve. If this sounds familiar, here are 5 ways to save money on a tight budget that might help.
Borrow only in Emergencies
If you have a tight budget due to too many financial commitments, borrowing any more will only cause financial hardship. Maybe you have got into a habit of purchasing things on credit, store cards, or buy now, pay later schemes. If you have become overly reliant on credit, it can be difficult to quickly reduce it. Ideally, you should only borrow when you have no other options and only for essential circumstances.
If you can afford to maintain the repayments, 24-hour loans can help you whenever you need them, especially to cover those unexpected bills that take you by surprise. Improving your relationship with money will mean more affordability and more to save, so only apply for credit when you have no other available options and only for essentials.
Budget for the Week and Month
Breaking down your budget from what you have available each month into each week can help you determine a savings amount. This should be from your disposable income to ensure your essential bills are always covered and maintained on time. From this, you can work out how much you have to spend each week and choose an amount you can save. Over time, this will slowly build and become a habit you’ll always maintain. It may be a small contribution but you can then review and increase the savings amount depending on an improved budget and if you have reduced other outgoings.
Reduce Spending Habits
If you like to spend your earnings, you may get too used to freely spending whenever the opportunity arises. This along with not keeping track of your accounts can lead to problems, so reducing where possible will improve how much you can save. It could be that the reason you have a tight budget is not because of your essential outgoings, but spending too much on non-essential purchases.
You can quickly review this by checking your bank statements and totaling up all transactions of this nature; you may be surprised just how much you do spend on clothing, takeaways, coffees, etc. Whilst this may be an eye-opener, the good news is with a few adjustments you will be able to save much more.
Look for a Second Income
To support your existing income, you may want to look into a second job or side hustle. This can be as creative as you want, such as monetizing a hobby you enjoy or taking a part-time job in the evenings or weekends. If your current income isn’t likely to increase and you have already budgeted your spending, a second income can be the best way to improve your savings, even if just for the short term.
Round up Remaining Cash at End of the Week
An effective method of saving where you can is to put any spare cash you have in a wallet or purse and put this into a savings pot. This is great with physical cash, but what if you don’t ever withdraw money? You can do the same thing with your online banking account and some banks can even set up an ‘account sweep’ so you can move a determined amount into savings. If you have a weekly budget and some spare money from this, move it into your savings. This can be done automatically so you won’t have to log in every time to do so. Set an amount you are comfortable with and watch your savings gradually grow.