Saving extra cash on a small budget can seem impossible when you’ve never done it before. But like any new skill, all you need is time, patience, and dedication to learn how it’s done. Think of budgeting like riding a bike. At first, you’ll need the support of some training wheels, but once you have some experience behind the handlebars of your budget, saving will become second nature to you.
Start your saving journey with this guide. It outlines five easy ways to save— no matter how small your budget is.
1. Take a second look at your budget
A budget should never be a thing you let rot somewhere in a hidden folder on your desktop. You should check in with it often, and update it as changes to your income or expenses happen.
When you take the time to review your budget often, you’ll become familiar with your spending habits. Regular expenses on things you don’t need drain your bank account of money. Once you eliminate them from your routine, you can put this cash into a savings account.
If you’re having trouble finding these patterns in your spending on your own, you can use a money management app like Mint to help. It keeps track of your cash for you and sends notifications when you’re overspending. After a couple of weeks, it’s able to analyze your spending habits, and it uses its findings to send personalized savings tips.
2. Automate your finances
From the posts you see on your Facebook feed to the Starbucks chatbot that lets you pre-order your latte, so many of the services you use in your daily life are already automated. You might as well embrace what automation can do for your savings.
It can be hard to commit to a regular savings schedule. All that cash sitting in your account calls your name, begging for you to spend it. If you can’t resist the urge to spend money you’ve devoted to savings, automating these contributions can take it out of your hands.
You should try setting up an automatic transfer between your checking to your savings on your payday, or see if your employer’s payroll department can split your paycheck deposit between different accounts. It’s hard to spend cash that was never there to begin with, so this helps prevent overspending.
3. Be goal-minded
Saving without direction is risky. It’s hard to commit to anything if you don’t understand how you stand to benefit, so make sure you attach a goal to any savings. You should choose something that will remind you of why you’re cutting out those fun but ultimately unnecessary purchases from step one above. Whether it’s an emergency fund or new shoes fund, this label can help you keep your focus and avoid spending money on other things.
4. Choose financial services wisely
Traditional banking rarely benefits people on a small budget. Conventional bank accounts come with terms and conditions that include expensive monthly fees, overdraft charges, and minimum balances. A lot of the times, these charges are hidden in complex financial legalese that only serves to confuse the average customer. While the biggest retail banks like Citibank and Bank of America are the most popular ways to save your money, they aren’t the only ways. There are alternatives companies that offer no-fee checking accounts and simple personal loans online.
Mobile banks like Chime don’t have any physical storefront, and the money they’ve saved in overhead means they can offer free accounts with no minimum balance. Likewise, a lender like MoneyKey does their lending online. They offer fast payday loans online that are uncomplicated and easy to understand. Clarity is essential when you’re searching for a personal loan. When you know the full extent of your agreement, you can avoid taking a payday loan that isn’t in your ability to repay.
5. Shop better
Spending your money is a part of being an adult with responsibilities. But just because you need to pay for things like shelter, food, and clothing doesn’t mean you have to pay full price for each item on your list. You can find a deal on almost anything if you’re willing to put a bit of time into it. Here are some ways you can cut down the final price on essential purchases:
- Comparison shop: Most groceries stores will match the price of their competitors if you can prove they’re selling an item for less. This will take time, as you’ll need to find flyers or print outs as proof.
- Couponing: You don’t have to spend your Sunday afternoon clipping coupons to find deals. You can find coupons and rebates using the apps on this top 7 list of shopping apps.
- Timing your purchases: If it’s not a “need right now” item, then waiting to purchase something until it goes on sale can help you save. Keep track of popular sales, like Black Friday, Cyber Monday, or Amazon Prime Day to maximize your dollars.
- Buy in bulk: Going to Costco could save you some cash if you need a lot of one item. Costco hours are wide and flexible, so you can shop during non-peak hours as well. Non-perishable household items like toothpaste and laundry detergent are great to pick up in bulk. Just keep an eye on its price per unit to make it’s cheaper than at the regular grocery store.
You aren’t destined to live without savings just because you have a small budget. You can find ways to set aside cash no matter how tight your finances are, as long as you’re willing to put in the time. Once you get used to these strategies, start looking for more ways to save. You can transform yourself into a saver faster than you think.