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7 Tips To Live And Save On a Shoestring Budget

Posted: August 11, 2018 at 9:09 am   /   by   /   comments (1)

Living on a small income—or surviving times when there is no income—is a big challenge for some and a breeze for others. Your success at living happily during trying times depends greatly on your mindset and how quickly you’re able to adapt to your new circumstances.

Not having enough money can indeed be frustrating, but even when you feel there is no scope to cut your expenses further or to save when you’re having a tough time paying the bills, there is still a small possibility somewhere to do more. Here’s how:

Set your priorities and stick with them

When living on a small income, it is essential to define your priorities and share them with family members. Cooking at home versus eating out; watching movies at home; spending on essential clothing items than on the latest fad—decide what’s more important, allocate money to each expense that is essential to your survival, and ditch the unimportant indulgences until you can afford them.

Teach yourself the basics of financial planning

Today there is no dearth of resources to learn a skill, and financial planning is something that everyone should learn early in life. You may be great at creating a simple budget, but the tips and tricks of professional financial planning can help you gain greater insight into your spending and help you build an even more effective income-expenditure plan. Look for free online courses on frugal living and money management.

Set up automatic savings

This is a great way to save even when you feel you’re hardly able to pay your bills. Set a small savings account where a specified sum will be auto-transferred from your checking account the day your salary or income is credited. Even a $25 compulsory saving each month will leave you with $150 at the end of six months.

Also explore money management apps that help keep track of income and spending—some will also help you automate your monthly savings.

Save windfalls and income tax refund

Save any unexpected income (including gifts and prizes), extra income (such as income from freelancing, bonus pay, overtime, and yearly increment) as well as your income tax refund for times when you’ll need more cash than usual. 

Also, make it a habit to collect all the coins lying around the house and put all in a jar where you can see them. Watch your savings grow, and when the jar is full, use it to buy an item of need or for some rare, much-needed self-pampering.

Cut out avoidable expenses

Magazine subscriptions, cable subscription that you use rarely, health club membership (opt for running instead), take-out meals, coffee, junk snacks, packaged beverages, bottled water—if you look close enough, several of your regular expenses can be reduced or plain removed from your life without impacting the quality of your life. In fact, doing away with many of these will only make your lifestyle healthier. So make a list of such items, review it, add the expenses you left out in the original list, reduce or remove them gradually—and watch yourself saving hundreds of dollars each year.

Minimize expenditure on health problems

This is a simple and effective way to save money yet something that requires consistent effort. Adopt a healthy lifestyle, take care of your physical and mental wellbeing, make your happiness a priority—and you’ll see yourself falling sick a lot less often. This would mean fewer medical and drugstore bills and a more charged and happy you ready to take on all sorts of challenges.

Avoid using your credit card as much as possible

Make it a habit to live within your income and spend only what you have. Avoid buying essentials on credit and redo your budget in a way that minimizes the scope for using credit card for buying groceries, paying the bills and fueling up your vehicle.

If a situation arises when you’ve exhausted all your options and need instant cash to meet a contingency, payday loans are an option worth considering. As the name indicates, these are short-term instant-cash loans that are to be repaid on your next payday, which ensures that you will not get entangled in a long cycle of debt, as with credit card debt. You do have the option to carry forward a payday loan; however, that may attract high interest, so it’s better to borrow an amount you can pay off in the next month or so.

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