Everyone is taught to save money to have more later in the future. For most people, that’s easier said than done. Spending on loan repayments, utility bills, and other daily expenses, it would even be a miracle if they got any money left.
So, how do you get to save money when you’re on a tight budget? Here are six ways to do just that.
When people are working on a tight budget, the standard practice they do is pay bills first. Afterward, they save whatever is left. That is if there is anything left.
To start saving even when on a tight budget, set aside a portion just for savings. It doesn’t have to be big. Even $10 a month is a great start. By the end of the year, that would be $120.
Get rid of what you can
“Knowledge is power.” The best way to start saving even on a tight budget is first to know where your money goes. For the next 30 days, list down every single instance when you spent your money.
Start with your loan repayments to your latte from your favorite coffee shop. Include your pack of gum too. You will be surprised on how much you’ve been spending on stuff that you either don’t need or can live without.
Enroll in loyalty rewards program
Many department stores and supermarkets now have their loyalty rewards programs. These enable you to earn points every time you shop there. These points can then be used to pay for your groceries. They can also enable you to get an additional discount on certain items.
Store up your loose change
When you’re on a tight budget, every cent counts. At the end of each day, store up any loose change, even if they’re just dimes and nickels.
Over time, these nickels and dimes add up and become dollars before you know it.
Check if you qualify for Earned Income Tax Credit
Most people who struggle with tight budgets are those that earn a moderate income. Sounds depressing, until you learn that people within this income bracket are more likely to qualify for what the IRS call an Earned Income Tax Credit.
Those who are eligible for this can get over $1,000. This can be used to pay off outstanding debts or add to their savings. Although not everyone with a moderate income is granted this credit, it’s still worth giving a try.
Open a time deposit account
Many savvy investors will squint their noses on this suggestion. After all, time deposits don’t earn that much interest. But if you’re on a tight budget, a time deposit can be helpful for some reasons.
One, you are not allowed to touch your money for a period of time of time unless you want to pay a hefty fee, so you’re not tempted to use that money on impulse
Second, the lock-in period is relatively short. Unlike other investments that have your money locked in for years at a time, you only have to lock your money in just a few short months. Sure, the interest won’t be too high, but at least it earned a bit extra for you to roll over and continue saving up.