Living On A Low Income? Here’s How To Stretch Your Money
Did you know that 25 million American households are living paycheck to paycheck? If that sounds like you, now’s the time to get smarter about your money. It doesn’t matter how much you earn, but how you live. You can stretch your dollars and save money for the future. Here’s how.
One of the biggest mistakes you might be guilty of when trying to improve your finances is looking at your bank account instead of your lifestyle. Chances are there are things you’re using money for that you really don’t need. An example is your morning coffee you buy on the way to work every day. It might not seem like a big expense, but it adds up. Just by making your own coffee in the mornings, you can save around $2.50 per day, which adds up to almost $1,000 in a year.
Here are other tips to help you get a better handle of your finances.
Cut Corners At Home
There are many ways you can cut costs on your home bills on a daily basis. Taking a shower instead of a bath saves water and energy. Hand-washing your clothing instead of using a washing machine is also a good idea. If you have to use a washing machine, set it to a cold temperature. Up to 90 percent of the energy in a washing machine is used to heat up the water, so you can save approximately $150 every year just by changing your temperature setting.
Get Help With Utilities
If you’re really battling to pay for your utilities, the U.S. Department of Health and Human Services Low Income Home Energy Assistance Program (LIHEAP) offers assistance with managing costs associated specifically with energy bills and energy-related home repairs. For instance, in Florida LIHEAP programs helps you pay your bills when it comes to natural gas or propane, provided these are your main heating sources in the winter months. Visit the U.S. Energy Information Association website for more information on how to get help paying your bills in your state.
Save On Auto-Pilot
It’s not easy to save money every month. The minute it enters your bank account, it has to go to pay for something. It’s so frustrating! A way to deal with this is to ask your bank to transfer a specified amount of money into a savings account automatically every month so that you stick to your savings plan without feeling the hit. Once the money’s out of sight, it’s like it never existed, and you won’t be tempted to use it for something else that crops up.
Stick To The Budget
If you don’t have a budget, it can be easy to let too much money go to one thing or lose track of small spending that add up. Here’s an easy budget rule to follow: the 50/30/20 rule. It means that 50 percent of your income after tax must go to your fixed expenses. That is, payments like rent and utilities that you need to make every month. Then, 30 percent goes to monthly costs that vary, such as grocery shopping and entertainment. The final 20 percent should be allocated for savings.
By the way, it will be much easier for you to stick to the budget using PocketGuard.
Stop Using Credit Cards
If you whip out your credit card for every purchase, you can easily live beyond your means. When you use your credit card, it feels convenient and like you’re not liable for the payment. This can cause you to actually spend more than you should. By forcing yourself to use cash and leaving your cards at home, you’ll get into the healthy money habit of focusing on where your money is really going. You’ll also cut down your debt, which is one of the biggest foundations of healthy finances.
When money’s tight it’s difficult to save or manage your finances, but there are easy things you can do daily to cut your expenses and put some money away for a rainy day. Start now! You’ll not only have a better portfolio but peace of mind.
Written by: Jackie Edwards