What are you saving for? Whether it’s a down payment on a new home, a dream vacation or you simply want to start putting more cash aside, you might not know where to start if you’re basically just covering your monthly expenses. If you are looking for strategies on how to save when you don’t have much to spare, the tips below can help.
Table of Contents
Calculate What You Need
First, you should calculate exactly how much money you need to save and how quickly you want to save it. This will let you know how much you need to set aside each month. Alternately, if your goal is simply to put away more money, you can decide on a monthly amount. Later, you might need to make an adjustment. You might find that you can save more than you thought or that you need to give yourself a little more time, but don’t make any assumptions about how much or how little you can save without first going through the steps below.
Know What You Are Spending
Next, you need to know exactly how much money you are spending relative to what you are bringing in. This includes your rent and your monthly bills, but you should also know exactly what you are spending on coffee, takeout, drinks after work, your regular grocery bill, streaming subscriptions and everything else. You can write down your spending for a few months, but if you’d prefer to use an app, there are a number that will make the process easier for you. Tracking over several months will help ensure that infrequent spending, such as money for haircuts or laundry detergent, is also included.
Reduce Your Monthly Expenses
You can then look at ways to reduce your expenses each month. Depending on how urgent your need is and how much you are willing to give up, this could mean cutting back on some entertainment spending, cancelling subscriptions, riding your bike instead of going to the gym and maybe even trading in your car for a cheaper one or renting a cheaper apartment. You can also look at ways to cut back on the money that you owe. If you are paying off multiple student loans, you might want to consolidate them all into one simplified payment. This may cost you less in interest, and you will also reduce the likelihood of penalties from missed payments with just one bill to pay.
Make More Money
You can also look at ways to increase your income, such as taking on a second job. However, it can be tough to juggle this alongside your regular one, so you might want to look into some kind of gig work instead, which you can more easily work around your schedule. From tutoring to mowing lawns, delivering pizzas to walking pets and more, there are a lot of small jobs you can do for extra money. You could also look into selling some of your belongings, whether at a yard sale, a consignment shop or online.