When it comes to budgeting, the common excuse I hear from people is that they don’t have the extra money to set aside. Once they get paid, and take care of all of their important bills, there is simply nothing left for them to put into savings. Does this sound like you?
If so, I have a few suggestions for you that will get you saving in no time.
Tip #1 – Always pay yourself first
What do you consider to be an “important bill”? Your mortgage/rent? Your car payment? Insurance? Of course, these are all bills that absolutely must be paid each and every month, but what about the bill of YOU? Aren’t you important?
Growing your savings is so very important for your financial future and you need to make this a priority. Do so by treating your savings as one of those “important bills” that absolutely must be paid each month. Ideally, it should be the very first “bill” you pay so that your brain knows that this bill is important. To make it easy on yourself, set up an automatic withdrawal from your chequing account each month (or week), so that a pre-determined amount of cash goes into your savings account without you having to lift a finger.
Tip #2 – It doesn’t matter how much you save (in the beginning)
The hardest part about saving money is simply getting started. How much should you save will depend greatly on your life goals, but also, on your current financial situation. If you are only working part time, or you are a one-income family, you may not have very much money to save each month. Don’t get discouraged and whatever you do, do NOT say you will “start saving when I make more money”. Save money right now, regardless of how much you make.
Even if you are only saving $5 each week, that’s still $240 a year that normally would have just slipped through your fingers. As you start to bring in more money, you can increase your savings amount, but in the beginning, start small if you have to. Don’t dismiss saving money just because you have a low income.
Tip #3 – Eliminate all unnecessary expenses
This is obvious, but I feel I should mention it anyway, because I know so many people who complain about having no money to save, yet they go out to the movies every weekend, buy new clothes with each paycheck and have a $300 monthly cable bill when they rarely even watch television.
Stop paying for things that are not necessary and save that money instead. Don’t buy new clothes if you already have a closet that is bursting at the seams. You don’t need to completely eliminate cable (unless you want to), but at least scale back on the cable package that you have – why pay for something you’re not using? As for entertainment, stop over-spending. Consider frugal entertainment ideas instead (or in combination), or commit to only going out once or twice per month.
Tip #4 – Make more money
Again, this is obvious, but if you really want to start saving money, you need to seriously consider if it’s worth it for you to start bringing more money home. This doesn’t necessarily mean you need to take on a second job (although that will help, of course), though.
There are many ways that you can make extra money. If you’re looking for a few ideas, check out this article that I wrote recently: 7 Ways to Earn More Money.
Just because you don’t have a lot of money, doesn’t mean that savings is something you should ignore. You need to start saving money as soon as you start earning it (however young that may be when you start working!). The golden rule is to save a minimum of 10% of your gross income every month, but like I said in tip #2, you don’t have to start saving this much initially.
Start saving whatever you can and gradually increase the amount. The key is to never give up. Never stop saving, no matter what your circumstances may be.