Creative Ways to Save Money on a Tight Budget — I

There isn’t a person on this Earth who hasn’t thought, “I wish I could save more money.”

However, wanting to save money and learning how to save money are two very different things. Many of us want to have better financial habits and dream of long term wealth. Yet, those initial steps often stop us.

Saving money, it turns out, can be a challenge at first. But, that doesn’t mean it’s an impossible skill to learn. Once you learn how to save money, it gets addicting. You start to wonder how you can save in many different aspects of your life. You watch your savings accounts grow and then your savings enable you to pay off debt. Suddenly, after months and years of good savings habits, you find yourself with excess money that you can generously give to others and make the world a better place.

The key is to learn the basics of saving money first, which will help you organize your finances. Then, it’s time to do a deep look inward at how you view money emotionally. Once you realize your triggers and how your spending habits affect your life, you become more aware and more willing to make positive changes. Then, once that’s done, you can learn how to save strategically in just about every area of your life, from buying a car to lowering your electric bill.

All of this information is below, listed one step at a time. By the time you’re finished reading this, you’ll not only understand the mechanics of saving money, but you’ll have a strong understanding of why it’s important to you and how to get there.

How to Save Money: Start with the Basics

Before you can enjoy seeing piles of cash in your bank account, you have to learn the basics of how saving money works.

1. Know Your Exact Income and Expenses

Without a doubt, the best way to start saving money is to learn exactly how much money you have coming in and exactly how much money you have going out. On accounting term it’s like Cash Flow statement of your own. Now, you probably have a rough idea of what your income is or how much your paycheck has on it each time you get it. But, it’s time to look even closer.

What number exactly is hitting your paycheck each payday? Then, what number exactly is going out in bills and expenses? There are several ways you can track your expenses.

Use An App: There are quite a few apps e.g. Mint

Use a Pen and Paper: Go old school with a handy notebook and write down everything you spend. I know many already do, the problem they don’t track it well time to time.

Create an Excel Spreadsheet (Or Download one Online): Lots of people like using excel to see their progress over time. It can also generate trends and predictions if you can program it well

2. Create a Budget Spreadsheet

Once you have a strong understanding of your income and expenses, it’s time to make a budget spreadsheet and apply the information you just gathered. For example, maybe you found out that you spend INR500 more than you earn each month. With a budget, you can input your income and your expenses, scan the list, and find categories where you can cut back.

For example, you might see that you have a high cable bill or a high car insurance bill. Those are companies you can call and try to get your bills lowered to create more breathing room in a budget. Just negotiate. I strongly believe you can bargain with anyone to lower your cost. Yet, you won’t know to even do this or attempt to in save money until you see all the numbers at one place.

Knowledge is power, and the more you know, the more you realize where your budget is weak, which will allow you to be more aware day in and day out as you go about your regular spending.

3. Automate Whenever Possible

Younger generations are big fans of automation, and yet I find older generations are still skeptical about it. I personally pay every single bill I have automatically. It saves me time, and in many cases money also. Even my baby diapers is also on subscription from Amazon. And Amazon takes care of it very nicely for me. In last 6 months alone, I saved almost INR500 total. I also like to save automatically. Thats almost 12% reduction on total cost. Don’t forget your saving account interest rate is just 2–3% if you are lucky.

Human beings are emotional creatures and sometimes we know what’s best for us financially but we don’t do it. We know we should save some of every paycheck but then other things come up. When you learn more about automating you can ensure you save without having to think about it. That’s when saving money becomes relatively simple.

4. Daily, Weekly, and Monthly Check Ins

When it comes to the basics of saving money, the last component is to check in with your money. It’s not enough to create a budget or automate your savings. You have to look at everything regularly. At first, that might mean daily tracking of your spending. Then, it might ween weekly tracking. Eventually, you might be able to check in once a month.

However, you do need to make sure you aren’t being charged twice for something, that all automatic bills really did get paid, and to check for fraud. This habit will help you catch any financial inaccuracy, which can definitely save you money in the long run.

THE SERIES WILL CONTINUE →