How To Ensure Savings On A Limited Monthly Salary
Saving comes almost automatically when you earn more than you want or need to spend, but what about those who earn just enough for their needs? This is a dilemma which a lot of people have to face. Fortunately, this is not without any remedy. Even while on a smaller income, saving can be done. Here are some tips:
Be in Control of Housing Costs
Rent is definitely no joke. Housing costs are usually the biggest expense of a person or a family. As compared to mortgage, bills or other expenses, rent can drain your earnings very quickly when you just let it run. However, you are not helpless when it comes to this. When you just rent or buy what you need, you will have more money for savings. A rule of thumb is to keep your total housing expenses to not more than 35% of your income.
If you are renting, try to get a balance of costs when renting a place. One place might seem cheaper, but the additional costs that you might get in this place, as well as the convenience another place can offer, might give you a better bang for your buck. You should also keep an eye on utility costs and cut down at every opportunity that you can.
Take on Bigger Expenses First
[su_quote cite=”Warren Buffett” class=”cust-pagination”]”I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”[/su_quote]
Saving can be a big challenge when you have low income, but you are not excused from doing so. The future can be harder and you will never know when you might need some money. While a lot of money saving ideas do work, one feasible strategy is for you to focus on your larger expenses first so you can make more of a significant impact.
As Mark Twain once said, “If it’s your job to eat a frog, do it first thing in the morning.” This only means that when you do harder and more difficult tasks earlier, you will deal with easier tasks later on.
Guard Yourself Against Entertainment Costs
Everyone needs to get entertained once in a while, but nobody deserves entertainment that push finances to the limit. Eating out, hitting the bar after work, getting some unnecessary coffee and buying unnecessary things might look harmless when viewed individually, but they can damage your monthly budget pretty seriously when they stack up.
You can still entertain yourself, but do be aware of how it impacts your personal finances. You cannot have everything you want and yet be deep in debt. There are a lot of things you can do such as cooking meals at home, watching movies at home and setting a strict entertainment budget which you should follow to the nail.
Get Rid of Unnecessary Expenses
You might still be paying for that landline which you only use for food delivery, which does not always happen anyway. You might also be subscribed to Cable TV, but end up watching the same 4 to 6 channels every day anyway. While you might be used to them, you can live without these expenses. When you get rid of them, you get more money for savings.
Besides, you can get all the news you want from free to air channels anyway and you are also freed from some TV addiction if you happen to have it. You can have more time for a lot of things that matter.
Buy Only What is Necessary
Thinking of just the things that you need can be hard when you have a limited budget. This gets even harder when you have a lot of unnecessary expenditures. While you see what looks like a “steal” for something that you do not really need or if you had a tough week and want to reward yourself through retail, you can just end up harming yourself instead of doing any good.
Humans are always drawn to what is shiny, regardless of the circumstances so it is not a healthy mindset to associate spending with hard work. Make a commitment and promise yourself that you will not buy anything unless it is absolutely necessary.
Your income might be small now, but just keep in mind that things do not always have to be this way. Diligence is the key and saving is a key strategy to get ahead so do what you can to cultivate this habit. What do you think of these habits? Share with us your thoughts in the comments down below.
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