If you’re on a tight budget and are finding it hard to save money then you’re not alone. Around 60 percent of New Zealanders have less than $10,000 in savings.
But often we’re not always aware of how much money we spend unnecessarily. By sticking to a strict budget and shopping around, it’s possible to start saving small amounts each month and put this money to better use.
Did you know that it’s still possible to save money even when you aren’t making a lot? Here are some tips on how to save money on a tight budget.
Here are some great tips to show you how to save money on a tight budget.
Keep a Record of Your Expenses
Before you can devise a budget you need to know exactly where all your money is going.
Start by recording your regular necessary expenses. Go over old utility bills and work out how much you pay on average each month. Factor in your rent or mortgage payments, telephone bill, and other monthly payments.
Make a point of keeping all your receipts for a month, no matter how small the purchase. At the end of the month, put your expenses into categories such as ‘entertainment’ and ‘food’, and calculate the totals.
It’s likely that there are some expenses that aren’t easy to cut down on without making drastic changes, such as your rent. However, when it comes to other expenses, there are probably a few purchases that you could have done without.
Seeing your outgoings in black and white can really help you get a handle on your finances so that you can plan how to save money on a tight budget.
Make a Budget and Stick to It
Sticking to a set budget can be difficult, but it’s the best way to discipline yourself into saving.
Now you’ve determined your fixed expenses such as rent and utility bills, you can look at working out how much you need to cover other expenses such as food, transport, and clothes.
Set yourself a weekly budget for these categories and challenge yourself to stay within that amount.
It will mean that you will have to wait a few weeks to buy anything more expensive, such as an item of clothing. However, delaying the purchase might make you think twice about whether you really want it.
Pay Into Your Savings First
The best way to make sure that you save money each month is to set up a free savings account and transfer money into it as soon as you get paid.
But how much should you save? Many financial experts recommend saving 20 percent of your salary. However, this could be difficult to achieve if you’re on a tight budget.
Instead, decide on an amount that you think you can afford. It doesn’t matter if you can only save a small amount like $50 a month, it’s still a step in the right direction. You may then be able to increase this amount when you have a better idea of your monthly outgoings
Save With Purpose
It can be difficult to commit to putting money aside if it’s just for general savings.
If you have a clear goal that you’re saving for, such as a new car or a family trip, thinking of this at times when you’re tempted to splash out can help you focus.
Stick to Cash
A simple but very effective way to learn how to save money on a tight budget is by switching to buying everything in cash.
Swiping a card doesn’t give you the same emotional response that physically handing over cash creates. And, it’s easy to spend small amounts on a card that go unaccounted for, but these small amounts can really add up at the end of the month.
Following your budget, take out a set amount each week to pay for everything and avoid using cards as much as possible. As well as making it easier to keep track of spending, you can’t spend what you don’t have so it’s much less likely you’ll go over your budget!
Keep a Savings Jar
Another way to make your cash work for you is to keep a savings jar on a shelf at home. It might sound old-fashioned but it’s a physical reminder of your savings goals that you’ll see every day, and can really motivate you to save more.
You could use it to put in any odd change that you want to clear out of your pockets or purse. Or, you could make a point of saving specific coins for the jar, such as 50 cent coins or anytime you get a $2 coin.
When it comes to sticking to your budget and making the cash you have to spend go further, shopping around can save you a lot of money.
Pick up leaflets and brochures in supermarkets to check out what deals are coming up, collect coupons and see which shops are cheaper for certain items.
Buy items like toilet rolls in bulk, and always take advantage of special offers on frozen foods, tinned foods, toiletries and cleaning products.
However, you should reassess how you buy fresh food and whether you could actually save by buying smaller packs to avoid waste. Alternatively, cooking in batches and freezing food is a great way to save time and money.
Don’t be afraid to shop around when it comes to other expenses too. Check out switching to another internet provider, and if you go to the gym, see if you can pay less by restricting your membership to just mornings.
And instead of just let your insurances renew, ask if your company can reduce your premiums and find somewhere cheaper if not.
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Learn How to Save Money on a Tight Budget
Money might be tight in your household, but these tips show that with good planning and careful spending it’s still possible to put some money aside into your savings every month.
And with a clear goal of exactly what you’re saving for, whether it’s a mortgage deposit, a new car, or a holiday, you’ll be even more motivated to save up.
What are you planning to save up for? Do you have any tips of your own about how to save money on a tight budget? Let us know by commenting below.