Everyone’s career has its own path, its own high points and low points. This is just the way of the world.
You may find yourself in a situation where you aren’t posed to earn a significant amount of money for at least the next few years.
That doesn’t necessarily mean that you’re doing anything wrong or that you’ve made mistakes in your major career choices.
But it does mean that creating and sticking to a budget will be essential to assuring your own financial security for the near and distant future. And you’ll have to do everything you can to save as much money as possible in the meantime.
Below you’ll find a guide on how to budget and save money on a small income. Try to implement some of these tips today to get started on making for a more financially stable future.
Analyze Your Spending
Before taking any significant steps to establish a new budget based around your limited income, you’ll need to take an honest look at your income, your spending habits, and your realistic financial needs.
Sign in to your bank account overview online in a secure location, preferably at home. Try to limit your distractions and focus solely on your financial records.
Certain banks provide in-depth breakdowns of your spending based on broad categories such as housing, bills, entertainment, and food.
Take a look at what percentage of your monthly income you end up spending on non-essential items.
Draw Up a Revised Budget
Based on your own spending patterns, try to find areas where you could cut back. You don’t have to live like a monk from the Dark Ages, but there are likely a few areas where you could spend less.
These areas will depend on your personality and preferences, but everyone has something that they’re probably spending too much money on that isn’t necessary to their wellbeing.
Don’t Eat Out Often
One very easy way to cut down on unnecessary spending is to limit the number of times you eat out at a restaurant each month.
A good rule of thumb is to only eat out about once a month. And when you do go to a restaurant, try to keep your meal, including drinks, under $30.
This may feel difficult at first, but it can also provide an opportunity to focus on cooking at home.
Watch some helpful YouTube cooking channels to enhance your skills and find new, interesting recipes that can be made for relatively little money.
This will make cooking at home more fun and is a great way to add some variety to your diet without breaking the bank in the process.
Try to Sell Unnecessary Items
The next step in cutting out the fat from your lifestyle is to look around your home and determine which of your pricey possessions you don’t really need anymore.
That could be a bicycle you haven’t used in a few years, or maybe a speaker system that’s been collecting dust for the past several months.
The internet age offers many different options when it comes to selling used possessions.
Do some research to see how much similar items are selling for on the resale market. When posting your own item to one of these sites, set the starting price just a little higher than the prices you observed online.
If your items don’t sell successfully over the next few weeks, then you can start to gradually lower the price until buyers become more interested.
But don’t drop the price too low, or else you won’t be getting your money’s worth for letting go of a prized possession.
Shop at a Discount Grocery Store
First, if you get your groceries delivered by a local store or through a delivery app, start going back to the store in-person instead.
This will cut down on expensive delivery fees and tips and will also give you the opportunity to compare prices in the store and take advantage of bargains.
Try to find a store new you that offers discounted prices on many name-brand products. Saving just a few cents on each item will be sure to add up over time.
If you don’t already have a rewards card for a particular store, sign up as soon as you can.
These programs are free for shoppers and can potentially save you more than a few dollars each time you shop.
But lots of bulk items like rice and beans, which have a long shelf life and can be very filling as well.
Find Affordable Insurance
Being an adult means that you need to have insurance, in many different forms. Health insurance is required by law in many places, as well as car insurance, if applicable.
If you’re currently paying high premiums for any of these forms of insurance, then you may want to have a conversation with your insurance agent and discuss potential ways to lower those premiums.
If your current insurance provider isn’t able to lower your premiums to an acceptable degree, then it may be time to look into alternative insurance providers.
The coverage may not be as good, but if it comes down to pure dollars and cents, then your priority should be affording your bills each month, regardless of where they’re coming from.
Always Put a Percentage of Your Income in Savings
Lastly, as soon as you receive a paycheck, you should make sure to immediately transfer a portion of that paycheck to a savings account, preferably one with high interest rates that will help your money earn even more over time.
You may want to sit down ahead of time and determine how much money you can afford to spare per each pay period.
Even if it’s only $20 each month, you’ll be surprised how quickly your savings will build up, allowing for greater financial security.