Managing With a Tightened Budget – What You Should Know
There was a time when people lived only on what they earned and they still managed to save up enough for any sudden needs. Dresses did not cost £100 back then and you could easily get coffee for way, way less than £3. People did not earn much but managed to have a good enough house and even a car while even saving up.
Today the costs for the usual daily consumption items have increased to such a great extent that they are interfering with our ability to live as we would like to, forget saving up for our children’s education or our retirement. We are usually unable to make do with what we have and constantly looking out for better earning opportunities. There is certainly nothing wrong with wanting to earn better, don’t get me wrong there. It is, in fact, a good thing that you want to move ahead in life.
What I am trying to say is that you do not have to fret about having less and you can certainly do better with what you already have. Have a look at your lifestyle and I am sure you can come with ways to trim the costs. Let me introduce you to some of these tips.
Evaluate Your Spending
The first step to take is to evaluate your spending. You need to see how much you have been spending over the past couple of months and what on. See if you can justify all those costs; that is, whether the money you spent fulfilled any of your wants, your needs or nothing at all. Make sure to include as many purchases as you can remember, no matter how insignificant. You just have to find out how much you are prone to spend and on which.
Make a Budget
Next is to make a budget. This is extremely important as it helps you see how much you can spend without going overboard. You know how much you have and you know what the necessary expenses are. This helps you to plan out your income. Make sure to set out a certain percentage of your income and deposit it in your savings account. When you will keep it out of your sight you will be less prone to spend it.
When you are out shopping, try to get deals and see if you can bargain rather than simply paying for what the retailer asks you. Chances are that the seller would agree to a lower than retail price without much hassle. Another tip when shopping is to use cash instead of card. When you spend cash it hurts and when shopping with a card you don’t really care at that moment since it is plastic you are using; it is a psychological thing. Using cash will likely make you spend less.
If you are under debts, for example student loans and home mortgages, try to clear them out at the earliest. If you have defaulted on your loans there are organisations out there who can help you with loan rehabilitation. They also help with loan consolidation and getting you monthly repayment options as per your current financial standing and your income.
If you are way too much under debt try to get rid of your more expensive possessions; for example your luxury car which, besides costing a lot, also requires you to spend a lot on maintenance. It is definitely more important to be debt free than to drive an expensive car.
When you will finally be debt free you would be grateful to yourself for having taken this step because your income would no longer be subject to debt repayments and you will have more to spend and save. You can also make extra payments; even just one or two extra per year would help you save over the years.
Back To You
Do your work yourself. This includes gardening, window cleaning, walking your dog, making your coffee yourself rather than buying it, and so on. You could even end up growing your own vegetables and fruits, of course only those you can easily manage. Besides saving up on your grocery you would also be doing a favour to your body by taking in organic, pesticide-free food.
And finally, there are always coupons and value cards available to take advantage of. You cannot imagine the kind of savings these eventually lead to. Even gift cards are a great way to get what you want without spending a lot. If you don’t plan to use your gift cards you can always sell them off.
All this would probably appear to be a bit difficult, but start gradually and small. It will all soon become a part of your daily life and you will not even feel it. Besides, you will be surprised at the amount of savings you will end up with.
By Rachael Everly
About the Author: Rachael Everly is an undergraduate student of finance who loves to write on the topics related to Money Management and Loan Forgiveness. Follow @RachaelEverly for further updates.