For some people, the only way to save more money is to earn more money. While there is nothing wrong with saving more as your income increases, many don't have the luxury of relying on this strategy. For this reason, they get stuck looking for creative ways to save a buck here and there. Living on a tight budget doesn't have to be difficult.
Before you make any changes to your budget, you need to review your current spending and saving habits. How much money are you spending every month on essentials? How much are you spending on things you just don't need? And just as importantly, how much are you saving when you subtract all your expenses from your total income?
You may be surprised to find that shaving a few expenses from your monthly budget can leave you with $100 or more in your pocket.
How to live on a tight budget:
Don't know where to start? The following five expenses are dragging down many others, and may be doing the same to you every month:
1, Daily coffee stop on the way to work
Are you the type of person who is always stopping at Starbucks, grabbing a cup of your favorite coffee to start off your day? This is a habit that could be costing you hundreds of dollars a month.
This story touches on the finer details of a Starbucks addiction, including how much it could be costing you every month. Hang onto your seat, as the numbers may shock you!
2, Vending machine runs throughout the day
In the morning you head to the vending machine for a pack of donuts. In the afternoon it is time for a soda and a bag of chips. And don't forget about that candy bar for the drive home.
Since you are only feeding the machine dollar bills and change, you may not feel like you are spending that much. However, this can really add up. Even if you only spend $.50/day, by the end of the month it works out to $10 or so. And that is if you only spend $.50/day, which is much less than the average person consumed by this habit.
3, Eating out everyday at lunch
Just because this is something your coworkers are doing it doesn't mean you have to follow suit. There is nothing wrong with meeting up with coworkers at a local restaurant for an afternoon bite. There is something wrong with doing this every day of the week.
To calculate savings, try using a lunch savings calculator. With this calculator, you can compare the cost of taking your lunch to work to eating out. Even more so, you can see how much your savings could earn in interest over time. Once you run the numbers with this calculator you may never again stop at your favorite restaurant for lunch. Buying your groceries on a budget is one useful way to never exceed your allotted food allowance.
4, Another fill-up
Even if you use tools to find the lowest gas prices in your area, the cost of one more fill-up a month can break your budget. This is even more so the case if you drive a truck or SUV with a large tank (that Cadillac Escalade is expensive).
Things come up over the course of a month that require you to drive. From daily trips to work to carting your kids around, you will likely spend a lot of time behind the wheel.
Imagine this: if you could cut one tank of gas from your budget every month, you would likely save $40 or more. For those with larger vehicles, the savings could be in excess of $1,000 by the end of the year.
Rather than drive everywhere, look into options including but not limited to: public transportation, walking, riding a bike, and car pooling.
5, Extra cable channels
In today's day and age, everybody loves to watch television. From sports to movies and everything in between, there is always something good on.
Did you know the cost of all those extra channels could be holding you back from reaching your savings related goals?
Comcast, for example, offers a variety of cable TV and internet packages. By simply dropping down one level, from 200 channels per month to 80, you can save $40/month.
Tip: take the time to go through every channel available to you, making note of which ones you do and do not watch. You may find that you are paying for channels you don't have any interest in. Living on a budget means being conscientious of all resources.
If you are able to shave just one of these five expenses from your monthly budget you will save big. Imagine if you can get rid of several. Soon enough, you may find yourself with hundreds of dollars in savings every month. Share these tips for living on a budget with all your friends and family to make the world a more prosperous place.