It’s really hard to save money when you have bills to pay.
Many people don’t know how to live at or even below their means. One of the biggest mistakes a lot of people make in regards to saving is that they don’t make saving money a priority. People need to learn how to manage their personal finances much like any business owner would manage his/her business. If a business is not turning a profit then that business might as well close its self down.
A business cannot be in business without making money. In other words, it makes no sense for a business to have its doors open without making any profits. Although an individual can live without having any savings, if your job is only paying enough to cover your living expenses without having anything leftover, you’re pretty much a slave to your job. This means that you’re limited by however much your job is paying you and however much it costs you to survive day to day.
No one wants to live a restricted life so therefore, it is important to make sure that you do your best to maximize the amount you’re able to put into your savings each month. Like in any business, the only two ways to add more money into your bottom line is to increase your income or control your spending.
How to control your spending:
Prepare a budget and try to stick to it
A budget is an allocation plan for your living expenses. Budgets help you to understand not only how much your spending but where the majority of your money is going. Basically, in order to come up with a budget you need to list out all of your bills and how much you owe for each one. You also need to make a list of all your variable expenses which would include estimations for things like groceries, gas money, money for entertainment, etc. An important factor to include in your budget is saving.
Remember to pay yourself just like you pay everyone else
This can be a set amount from each paycheck or a percentage. Just make sure that you don’t forget to pay yourself and once you’ve set that money aside, don’t touch it.
See what bills you can cut down on or what expenses you can cut out
Once you create a budget, you can try to cut down on some of your bills, particularly your variable expenses such as your food costs, your entertainment costs, and maybe your utility costs. How you choose to cut down is up to you. For some, it might be downgrading from premium services to more basic services such as with a cell phone carrier or cable company. Perhaps you might even cut out your cable expenses altogether and just use the internet for your viewing entertainment.
There are many online websites where you can view tv shows, movies, and news without having to be hooked up to a cable box. If you normally go to a gym, try working out at home or at the park. Take as many opportunities as you can to save on transportation costs by either walking or investing in a bicycle to get around town. Save money on food by using coupons, buying in bulk, or even shopping online for some of your items.
Don’t forget about dollar stores which can have many of the same or similar items as the regular grocery stores but at a much lesser price. How you choose to cut down on your expenses depends on what things are most important to you and how much you value your current lifestyle. In order to see your savings account begin to grow, you have to pay attention to what you put into it.
How to increase your income:
Once you have done all you can to control your spending, if doing so wasn’t enough to make a difference in the amount you are able to save, you have to find ways to increase your income. Although there are many ways to find more money, the two basic ways are either you will have to get a job or start a business.
Get a job
A lot of people choose to work more than one job to be able to add money into their reserves. This can be an easy solution but it is also very stressful and requires a great sacrifice in time. For someone who has a family, is enrolled in school, or just has a primary job which leaves them exhausted as it is, working two jobs may not be conducive.
Time is much more valuable than money because you can never get time back whereas money will always come and go. If you choose to work two jobs, make sure that the second job you take is either something that you enjoy doing or something which is simple and won’t take too much out of you.
This can be tutoring children at an afterschool program if you love working with kids, working as a waiter if you love making tips and working on your feet as opposed to sitting all day, working as a secret shopper where you get paid to visit stores and eat at restaurants, or as a pizza delivery person who basically rides around in their car all day making pizza deliveries and listening to their car radio.
If you want to work 2 jobs, make sure that while doing so you do whatever you can to prevent burning yourself out.
Start a business.
The notion of starting a business doesn’t have to mean starting a full-fledged business. Starting a business basically means creating money for yourself without having to work for someone else.
There are many ways that you can attain. If you have extra living space in your home, you can consider becoming a landlord and subletting a room in your house. You can also find products to buy and sell on websites like ebay or craigslist or via garage sales and/or flea markets.
You can come up with a service business idea such as creating websites, writing research papers or business plans, doing hair, or walking people’s dogs. Consider whatever your talents are and how you can make money from them. If you love creating art, maybe you can sell your artwork or do portraits for people. If you love to write, consider freelance writing online.
Consider making money from online methods such as by creating mini websites that generate advertisement revenue. If you build several websites generating around $30-40 per month passively, you can make enough money to pay some of your bills without having to work.
In closing, the truth of this matter is that people spend money just as different as people’s personalities are different.
Each person will value different things which will cause them to have dissimilar views on the importance of saving money as well as what lifestyle habits they see as necessary or luxurious.
Regardless of how much a person values having a saving, part of being a responsible adult is being able to have money to take care of themselves and also to be able to pass down to their children and family members who will come after them.