According to recent data, most employees make less than $50,000 every year and live from paycheck to paycheck. These numbers are slightly higher for the families that have higher pay. So, when you live from one paycheck to the other, you get a hard time finding anything to cut from your tight budget.
Most of the time, people get a tough time saving money due to the way they spend their earnings. But the good news is that there are various ways you can reduce your monthly expenses and save money.
Track your spending
This is usually the first step to reducing your monthly expenses. Money requires discipline when it comes to spending it. Ensure that you keep a record of all your spending. This way, you will be able to know where you can cut your expenses.
For this step to be practical, you will have to account for every dollar you use. Use a spreadsheet or notebook to record your expenditure. Doing this for a single month will give you the needed information for your next step.
Update your subscriptions
This is another easy way to reduce your monthly spending. Ensure that you cancel any magazines, memberships, or streaming services you are not using. If months have gone by without using these products or services, consider finding the cheapest versions. And if you loved watching the history channel on Roku, you can always re-subscribe when your money is not tight.
Email newsletters might not cost you a lot of money; however, they might tempt you to make unnecessary purchases, unsubscribe and sign up again later when you need them.
Use cash only
If you really want to cut back on your spending, you will have to switch to cash only. Doing this will allow you to account for every penny you use. And according to various studies, people tend to buy things on impulse when they use their credit cards. So, using cash only means that you can’t live above your wages.
To save more, ensure that all your bills, rent, and utilities are paid via automatic withdrawals. This way, you will be limiting the rest of your spending to cash only.
Make a budget
Living on a budget might be difficult for many people. However, if you have a hard time controlling how you spend your money, a budget with really be of help to you. Having a budget allows you to allocate every penny you earn to something constructive.
This means that you must have a very comprehensive budget that will specify how much you want to use and how much you want to save. However, if you cannot use the process of allocating every penny to a project, consider using the 50-30-20 rule.
This rule means that you will allocate fifty percent of your wages to your requirements, thirty percent to your needs, and twenty percent to savings.
Freeze your credit cards
When you are trying to save money by reducing your expenses, avoiding your credit cards will be necessary. However, you don’t have to get rid of all your credit cards; you will obviously need to build a positive payment history to build good credit.
The best thing to do when you want to avoid temptation is to freeze your card. You will have to freeze the card in a block of ice practically. This means that you will have to wait for the ice to melt before using the card. You will then be able to think well about what you want to buy.
Don’t wait for a project to save money. Instead, start now by updating your subscriptions and watch movies for free, freeze your credit cards, make a budget, use cash only, and track your expenditure.