This year, thanks to the pandemic, people have seen a lot of layoffs, pay cuts, shutting of businesses and so much more- making our financial lives tricky and exhausting. During these stressful financial times certain underlying family dynamics tend to come to surface as well. Guess it is time to take charge of the situation and set things right (almost).
Even though you are on a tight budget, saving money is still possible; all you need is a little effort, and you can tide over these tough times.
Here are few tips on how you could save some money on a tight budget:
1- Gather around the table
It is time to have a family meeting. Gather all the members and ask them to pen down their monthly needs and expenses. Calculate the total monthly expense of the household and make sure that every area of expense is discussed and how much is left over per month. And then set a budget. This might call for certain cuts and adjustments which need to be agreed upon by every family member. This is the most important step for the budget plan to run smoothly.
If you wish you could set aside a small amount for a bit of indulgence, but ensure that you do not cross the budget unless absolutely necessary.
2 – Identify your needs from wants
It’s time to prioritize. Needs are expenditures that are absolutely required to for you to live. And on the other hand, wants are expenses that provide leisure and help you live more comfortably. Wants and needs might vary from person to person. Your needs are likely to remain constant every month. You could call them the fixed expenses.
However, it is best advised to prioritize your needs over wants. Like, try eating at home and avoid outside lunches. Reduce your coffee shop visits. If you are travelling, then opt for affordable lodging.
If you want to budget for both needs and wants, Nerdwallet recommends the 50/30/20 budget.
3 – Track your expenses and make room for change
Tracking your expenses could be the easiest way to know what is costing you the most. Once you identify your fixed expenses, sticking to your budget and saving money becomes easy. Once tracked, you can make adjustments accordingly. It would be really helpful if you can get all the family members to stick together and accept the change. And if you find yourself struggling with this change, make sure that you share your anxieties with your family members.
There are several apps available that can help track your expenses. In case you aren’t a big fan of apps, then spreadsheets would be the next best thing.
4 – Check your insurance rates and refinance mortgage
Yes, really. Compare your insurance plans and switch your plan if you find better rates available in the market. This could save quite a lot of money.
Also, if you find better mortgage rates then it would make a lot more sense to pay the penalties for breaking your mortgage and refinance at lower rates.
5 – Get rid of unwanted subscriptions
It would be prudent to cancel subscription to magazines, monthly boxes and even the gym. Working out at home is as easy and there are loads of videos available online that could help you with your workouts at home. Again, analyse and prioritise and it could help you save a lot when you are on a budget.
6 – Detach from cable
True, it’s easier said than done, especially if you have an elderly member at home. Having said that, cutting the cable could substantially cut down household expenses. You could opt for digital antenna so that you could watch your local channels for free. You can also go for cheaper options like Netflix, Amazon Prime or Hulu.
And if you think that this isn’t a great option for you then do consider changing your cell phone plan. There is always some or the other deal going on.
Either ways, you will end up saving a good amount of money.
7 – Avoid monthly bank fees
If you are paying a fee for your checking or saving account, then you could switch your bank and opt for ones that offer free checking and savings accounts.
8 – Make a shopping list and stick to it
Make a list before you decide to go grocery shopping. Make the list at the beginning of the month and stick to it. Curb the urge to spend on unnecessary items. Look for discounts or opt to buy in bulk. Buying in bulk could help you save up to 30%.
These days you would find a lot of sellers offer attractive discounts to encourage buying. This is a great way to buy things at lower prices. You could also opt for switching brands to ones that are more cost effective.
It is wise to avoid impulse buying. Stick to the list so that you don’t end up spending of things that are not really necessary. Evaluate your need before you buy something that isn’t on that list.
Such little savings would provide great respite in case of emergencies.
9 – Use cash back apps
There are a few cash back apps that would help you scan your receipts and get immediate cashbacks on certain products. You could receive up to 30% on certain items.
10 – Focus on conscious consumption of energy
When it comes to saving energy there are a lot of ways one can go about it, however, it will vary from household to household.
Switch to energy saving power strips. Plugging the electronics to an efficient power strip will reduce the amount of energy you consume and help you save a lot. Also, avoid preheating the oven and broiling food, until absolutely necessary. This will help you save a decent amount of energy and significantly lower your bills.
Apart from the ones listed above, there are a myriad of other innovative ways one can think of saving money, when on a budget. These little tips and tricks listed above are but a snapshot of what might work for most and are possibly the easiest to put into practice.
And even if you are not on a budget, it would behove you to be mindful of your spending, given the current times.
After all, these days there are a lot of uncertainties regarding our political, economic, and personal futures. Hence, saving money for the rainy day would certainly equip you adequately to weather the storm!