Tips for Saving on a Small Budget
We all have dreams of someday buying a house or taking that trip of a lifetime, so it makes sense that the majority of us would like to save money to make those things possible. When you are struggling to make ends meet or are living paycheck to paycheck, this may seem difficult.
There will be times when money is tight, but even then there are methods to put money aside for things that your family may need in the future like college and retirement.
If you are serious about saving money, you can do it even on a modest wage. Here, we show you how to save on a tight budget.
Best Ways to Save with Very Little Money:
Remember to pay yourself first
Making savings a top priority is the first step towards really starting to save. There will never be any money left over at the end of the month to put towards savings, so it is important to put aside some of your earnings as soon as you get paid, whether in a bank account or under your mattress. Put yourself first when making financial decisions.
You should save anything you can, even if it’s just R100 per month. If you put away R100 per month for a year, you’ll have R1,200 in December. Or at the very least, keep a coin jar in a drawer and put your spare change in it. You won’t believe how quickly the money builds up.
If you can set aside R300 every month, you can put that money into a variety of investment products and watch it increase over time as interest is added.
Look for ways to earn extra money
If you’re struggling to make ends meet each month and have no money left over for savings, it’s time to be creative about how you may bring in some extra cash.
Get a part-time job on the weekends, babysit for others, sell purses or jewels from a catalogue, make and sell a dish that is popular among your friends and neighbours, or sell your old clothes and keep the proceeds.
Be clever with the way you shop
Learn how to save money while still getting the meals you need. Invest a weekend into researching where to find the best deals on necessities, then stick to shopping there whenever possible. It’s also a good idea to check out their weekly deals and stock up on these if you’re able to.
In fact, it’s possible to form a small group with one or two other people in your neighbourhood, pool your resources, and make wholesale food purchases to share. Don’t forget to tally up your savings from budget purchasing and put that money away for a rainy day.
Keep track of your data use
Users of smartphones in South Africa now have access to a magnificent new world of connectivity and capabilities. However, due to the large amounts of data used, the fantastic services available on smartphones can soon drain your airtime.
Make sure the “auto sync” settings are switched off in every app on your smartphone. This implies they will not communicate with each other until specifically instructed to do so. Rather than using your airtime for checking email and social media, it is more cost-effective to get a data bundle.
Avoid buying on credit
You can’t afford to buy items on credit if you can’t afford to save. When you make a purchase using credit, you must pay back the money plus interest every month.
You’ll end up spending more money on this than you would have if you had just saved it. It’s straightforward: put money away FIRST, THEN spend it.
Cut back on big expenses
What more can you do to cut costs aside from the obvious measures like eating in more often and skipping the gym or DSTV subscription? If you want to make a real difference, your efforts would be better spent cutting back on major expenditures rather than minor ones.
Most people’s biggest monthly bill goes towards mortgage payments, therefore homeowners might benefit from lowering their interest rate by refinancing or from renting out a spare room or parking space.
Invest in your health
Spending on medical care, medication, and time off work may add up quickly when you’re unwell. Washing your hands frequently can significantly reduce your risk of contracting a virus, and while there is no foolproof strategy to avoid becoming sick (or everyone would be doing it), it can help.
Wash your hands before and after preparing and eating food, before and after caring for someone who is sick, after using the restroom, changing a baby’s diaper, coughing, sneezing, or blowing your nose, and before and after handling garbage.
The immune system can be strengthened by consuming fresh fruit and vegetables, which are less expensive overall.
Commit to a savings percentage
You should first settle on a monthly savings goal. The recommended initial amount is 10% of monthly income.
You can cut back if you need to keep a roof over your head and food on the table, but don’t make any hasty decisions. Set goals and readjust as needed.
Set a budget
Establishing and sticking to a budget is a great method to reduce financial outlays. Create a budget including all of your monthly expenses and income. After you’ve paid for your basic needs, you’ll know how much discretionary spending money you have.
Frequently Asked Questions
This refers to the habit of immediately apportioning some of your pay towards your savings, rather than waiting to do so at the end of the month.
Try to aim for 10% of your income each month, where possible. So, if you earned R4 000 last month, try to put R400 of that into a savings account and budget the rest.
Get creative, and see what you can sell in your community. Get a part-time job on the weekends, babysit for others, sell purses or jewels from a catalogue, make and sell a dish that is popular among your friends and neighbours, or sell your old clothes and keep the proceeds.
You should only consider taking out credit if you can also afford to apportion some of your income to savings. If you can only do one, rather save than buy credit.
Look at the most expensive items first that can be eliminated from your list, such as things you don’t need and that could rather go into saving money – such as your DSTV account.