You know the importance of saving money, but every time your paycheck comes in, all of your bills and other responsibilities take their share.
When all is said and done, you barely have anything left to save.
So how do you begin saving when you’re on a tight budget?
It won’t be as easy as having plenty of extra cash left each month, but it’s possible. Follow these steps to make the process easier.
1. Track Everything
When you’re trying to save money on a budget, you need to know where every dollar is going each month. It’ll give you a picture of your total spending so you know how much to save without failing to cover your expenses. Plus, it makes finding expenses to cut much easier.
You can track your income and expenses using pen & paper or a spreadsheet, but one of the most convenient ways is to use a software tool like Mint.
2. Cut Out Subscription Services
Subscription services are popular nowadays due to convenience. So popular, in fact, that you might still be paying for one or two without even realizing it.
That’s money down the drain every month.
Spend some time combing through at least one year of bank statements (in case any subscriptions are annual) and write down every subscription service you see.
Then, make a note of if you’re still subscribed to it, how much it costs, and how much you use it.
From there, you can slash subscription services you never use. As for those that you use sparsely, the extra money in your pocket might be worth it. You can always resubscribe later.
3. Automate Your Savings
Some struggle to save out of forgetfulness. Others find it hard to lock hard-earned money away in a savings or investment account.
Both problems can be remedied by setting up auto transfers to your savings or investment account. Once you’ve tracked your spending and figures out how much to save each month, set that as the transfer amount. Have your transfer occur at the same interval that you get paid.
4. Refinance Debt
Interest costs quietly eat away at your money because that interest isn’t getting you anything in return.
With that in mind, refinance debts if at all possible. Refinancing involves taking out a new loan with a lower interest rate than one or more old loans and paying off those loans. It’s a free process, and with today’s technology, you could be approved for a refinancing loan in minutes.
You’ll save plenty on interest and possibly pay off debts faster with more payments going toward principal.
Just be sure that your new interest rate is lower than the weighted average of your old rates. If that sounds confusing, don’t worry — there are calculators online to help you out.
5. Negotiate Bills and/or Switch Providers
This one can sound scary, but negotiating your bills isn’t that bad. After all, you have the power — you’re the one paying them money.
Before negotiating, do some research into other competitors. See if they have lower prices. Bring that information to the table — as well as the fact that you’ve been a loyal customer for however long — and make your case.
You might just score a few bucks in savings.
