How to Save More Money When You’re Broke
You don’t need to be rich to start saving and investing your money. Even a little extra cash stowed away each week can make a major difference to your future.
If you’re having a hard time finding money to save each month, then you’re not alone. About a quarter of all US citizens don’t have even $1,000 to put towards emergency costs, according to recent studies. Whether you’re a student struggling with debt, or you’re an employee dealing with low wages, saving for big goals like a new house or car can seem practically impossible.
The good news is that there are ways that you can save money, even when you’re broke. Here are a few tips to get you moving in the right direction again.
Start with the Right Attitude
If you tell yourself that there’s no point in saving until you’ve got a lot of extra money, then you’re not going to make much progress. On the other hand, if you recognize that no amount of cash is too small to start saving, then you’ll be amazed by how much you can accomplish.
Start by putting as little as $5 a week away into a separate savings account whenever you get your monthly wages. It might not seem like much at first, but you’ll be making a lot more progress than you would be if you weren’t saving anything. Don’t worry about what you think you should be saving, and remember that the faster you get started, the more you’ll benefit from things like compound interest.
Challenge yourself
If your problem is that you think budgeting is boring, consider making saving a personal challenge. For instance, think about how you can set more money aside by telling yourself that you’re going to take public transport twice a week or set yourself the challenge to find new ways of getting to work that cost you less than using your car. You could also set yourself a goal of a certain amount of cash to save on your grocery shopping each week by trying different brands.
When you stop looking at saving as a boring chore and start thinking of it as a chance to be imaginative and creative, you get to have a lot more fun with your money.
Put Savings on Autopilot
If you’re worried about your impulse to spend all your money as soon as you get paid, make sure that you don’t have the option to do that by putting your savings on autopilot. Decide on an amount that you’re comfortable saving from your wages each month and establish a direct transfer from your current account into your savings account.
If you have your bank do the hard work of squirreling your money away for you, then you’re less likely to spend the cash that you don’t have. Additionally, you’ll get a more realistic overview of how much money you actually do have left to spend each month.
Tackle your Credit Rating
A lot of budgeting articles tout the benefit of tackling your debts and getting rid of them as quickly as you can. This is a good idea, as the quicker you pay off your debts, the less you’ll need to spend each month on interest. However, don’t underestimate the benefits of improving your credit rating too. Taking steps to increase your credit score now will ensure that the next time you need to apply for a loan, you can get a better deal.
Since there’s a good chance that you’re going to need a loan for something in the future, even if it’s just your mortgage, getting a good credit rating will help you to save a lot of money throughout your life. Start by talking to a financial advisor about your options.
Track Everything
Finally, if you want to make a real difference to your financial situation, then you need to start by being honest with yourself. Set up a system that allows you to keep track of every expense that comes out of your bank account each month. This will reduce your risk of overspending on things that you don’t need. It also means that you’ll have a chance to see where your problem areas are when it comes to over-spending.
The more you track your money, the more you can start to make informed decisions about where you should be cutting back with your cash, and where you can afford to spend more.
