We hear it all the time: save, save and save! But that is tough when bills are due, unexpected expenses come your way and taxes seem to reduce your earnings to nothing.
Nevertheless, you must find a way to save. Whether you earn $20,000 or $200,000, here are five ways to save on a tight budget.
Start a savings habit
I don’t care if it is $5 per month or $500, get into the habit of saving something. Just saving $40 per month can give you $500 for the entire year. That is merely $20 every two weeks.
You will be amazed how quickly your money can grow when you save consistently and diligently. The key is doing it month after month.
Contact your financial institution to set up an automatic draft to save a sum of money periodically. That way, you will be able to save with little effort.
Forgo the gadgets
I know many people say they are on a tight budget and simply cannot afford to save. But these same people mysteriously find money for items they desperately desire.
If you have nothing in your savings, it is time to forgo anything that is not a necessity until you have reached your savings goal. Commit for the next three months to restrict purchases to items you absolutely need. In addition, use any extra money to build or establish your savings fund.
Slash your overhead
Review household bills to determine where you can save money. Whether it is your auto or home insurance, utilities or cable bill, shop around to determine whether another provider offers a lower cost.
Also, determine whether you are able to enroll in programs that can help reduce your bills. For instance, many auto insurance companies offer discounts for enrolling in safe-driver courses.
Create a system for your money
Keep your mind on your money. Create a system that allows you to budget, track your expenses and monitor your progress. Apps can help you do this, or you can use old-fashioned pen and paper.
Pay your bills on time
Over the long haul, late charges can take a toll on your money. Careful planning can help you avoid those fees.
For example, if you are paid on the first and 15th of each month, set up your bill payments to correspond to those dates. Any bill due between the first and 14th is paid using the first paycheck, and any bill due after the 15th is paid using the second paycheck.
Kemberley Washington, CPA is a personal finance expert, former IRS agent and professor. Visit her blog at Kemberley.com. Follow her on Facebook or connect with her Twitter. Like, Love, Tweet or Share this post!
Another version of this article was published in Bankrate.com.