Who does not want to live a better life? The overwhelming majority of Americans is living from paycheck to paycheck instead. We have a solution, but along with these tips, you'll need some discipline, patience, and diligence to make significant changes in your finances and take control over your life.
The best financial advice you can get is to live within your means. This sounds almost impossible with a low monthly income and a list of recurring expenses. However, you can meet all your expenses without resorting to quick payday loans and borrowing no matter how much you make every month. In fact, you can save a few dollars every month for emergencies. You may wondering how to get by until the end of the month? Here are some tips that will help you live on a low budget and actually save some money every month.
1. Create a Budget and Follow it Strictly
One reason why it seems impossible to save or survive on a low income is spending without a plan. Every item at the store seems like a basic need when you do not have a plan. Create your personal budget and allocate a specific amount of money to each item.
Start with the basic items such as:
- utility bills
Give an allowance for each item in case prices or rates change within the month. Adjust your budget every month to reflect the prevailing rates. Discipline yourself to spend your income based on the budget, especially if your income level remains the same.
2. Evaluate Housing Costs
Many families spend a high percentage of their income on housing costs. Be realistic about your financial situation and look for a house that you can afford. Do not shy away from moving to a cheaper neighborhood if you have to apply for a bad credit payday loan to borrow money every month to keep up with your expenses.
Of course, moving to a cheaper house may not be an option if you are on a mortgage. However, as a borrower you have the right to refinance it and get a better repayment plan based on your current income. Refinancing can help you save some money if you do it right.
Warning! Your housing costs should not take up more than 25% of your net income.
3. Avoid Credit Cards
Credit cards can be addictive if you do not have a sound financial discipline. You can easily spend way over your income when paying with a credit card. If you are trying to get through the month, avoid credit cards at all costs. You do not want to accumulate debts and worsen your credit score. Discipline yourself to pay for every item in cash. You will not only limit your spending to your budget but also avoid the interest rates and fees charged on credit cards.
4. Cut Down Your Expenses
Creating a budget helps you to keep track of your expenses. Evaluate each item on your budget and look for ways to save money. For instance:
- You can cut down your food expenses by carrying your snacks and lunch to work instead of buying every day. Eating out is in most cases more expensive than preparing meals at home. Prepare your food no matter how tiring that might be for you.
- You can cut your transport costs by riding a bike or walking to work. You do not have to drive or take a bus every day if your office is near your home.
- You do not need cable TV or a landline when you are working on a tight budget.
- You cannot afford to spend half of your income on clothes, electronics, road trips, and parties every month.
SuggestionHave a budget for your social life and entertainment and stick to it.
5. Buy With Coupons
Use coupons when shopping for your groceries and other household items. You can save hundreds of dollars every month if you know where to find coupons. Some stores double your coupons when you shop consistently while others give you points that you can redeem for items. Consider buying items on sale especially on holidays. Many stores give huge discounts on various items in a festive season. If you do not have the full amount, save for several months and then buy the item in cash.
Warning!Avoid buying items on credit because you end up paying a higher price for the same item.
6. Buy Second-Hand Items
You can save thousands of dollars every year by buying used items. You can find a second-hand item that functions as good as a new one. Sometimes people sell off items before using them just because they did not like them. Instead of buying a new car from a dealer, look for a used car of the same make. You can also buy second-hand furniture and electronics to improve your home instead of spending all your money on new items. You will upgrade them later if you must as your income level increases.
7. Find an Alternative Source of Income
While you try to keep your expenses as low as possible, think of alternative ways of earning and saving money every month:
- Consider a side business in your area of specialization or in any other field.
- You can do part-time jobs during your off hours and earn more money.
- Explore various ways of making money online like essay writing, tutoring, and blogging.
You may have to cut down your social activities to manage both jobs but you will have more income to spend. However, while looking for a side business or part-time job, ensure that the new venture does not affect your performance at your current job.
8. Be Diligent
Controlling your spending and saving require more than a desire or will. You must be committed and determined to make your personal finances work. Diligence is critical because you may have to apply the strategies outline above for several months before you realize tangible results. Do not give up and go back to your old habits just because you miss the mark in the first few months. Give yourself enough time to adopt new spending habits. Learning will take time but financial discipline will eventually become part of your life.
You can live a better life today instead of living from paycheck to paycheck if you implement the tips outlined above. Discipline, patience, and diligence are necessary for you to make significant changes in your finances. However, every step that you take in the right direction will bring you closer to achieving your financial goals.