Saving money is difficult, and it’s even more challenging if you’re already on a tight budget. However, that doesn’t mean it’s impossible.
This post will teach us practical ways to save money even with a smaller paycheck.
- Tip 1: Prioritize Needs over Wants
- Tip 2: Use Public Transportation
- Tip 3: Prepare Home-Cooked Meals
- Tip 4: Save on Utilities and Subscriptions
- Tip 5: Build the habit of saving what’s little of what is left.
- Conclusion
Tip 1: Prioritize Needs over Wants
The most important thing about saving on a tight budget is knowing the difference between your needs and wants.
For instance, a new cellphone is necessary if your old phone was broken or lost but a luxury if you just want to buy the latest iPhone out of FOMO, or worse, out of envy. This goes with other things or activities you want, like expensive food or expensive travel. So, before spending the money you want to save, you must ask yourself, “Is this a want or a need?”
You must know how to distinguish a necessity from a luxury because you’re on a tight budget and must tighten your belt.
Tip 2: Use Public Transportation
Public transportation can still be a viable alternative to using or buying a car, especially if traveling shorter distances.
Though public transportation in the country can be a hassle, you can save a few hundred by riding buses, trains, jeeps, or tricycles. In addition to the gas, you can save on parking and toll fees, plus the environmental benefits of not contributing to pollution.
Before taking out a car loan, consider the added costs of owning a car.
Tip 3: Prepare Home-Cooked Meals
Food is one of your biggest expenses if you’re working in the office and buying cooked meals close to your work.
By preparing meals before leaving for work, you can save up on buying your usual fast-food meals. Cooking will also allow you to save more if you live with your family. Aside from saving money, you’re also doing your body a favor.
Home-cooked meals can save you as much as P2,000 if you regularly buy a P100 lunch.
Tip 4: Save on Utilities and Subscriptions
You can save money by conserving water and electricity and canceling subscriptions.
The great thing about saving on your utilities is that it requires little effort. Simply turning off your unused appliances, unplugging your devices, and closing your water faucet can all add up to a decrease in your overall monthly consumption. You can also reduce your redundant video streaming or music subscriptions and select the ones you always use.
Saving on your utilities and canceling unnecessary subscriptions will help you increase your savings rate.
Tip 5: Build the habit of saving what’s little of what is left.
Saving money is a habit you’ll build once you start now and with discipline — regardless of your salary.
If you’re an entry-level employee, saving can be a problem because of a lower-than-expected salary than your expenses. However, building your saving habits even with as little as P100 per month or even just P10 per week is still better than saving nothing, worse, if you’re going into debt. This exercise aims to change your mindset about saving and tell yourself that you can indeed save.
If you can save money on a tight budget, just imagine how you will save if your salary increases.
Final Thought
Saving money is possible even if you’re on a tight budget or earning less. You need to learn how to prioritize your needs over your wants, save on some of your regular expenses, and build the habit of saving.