If you have a lower income, it can seem difficult to put aside money for future goals or unexpected expenses. However, by reducing certain expenses and changing your purchasing habits, you can save money over time.
Here are five simple tips you can use to build up your savings.
1. Cook at Home
Eating out can cost you quite a bit of money over time. As such, cooking more meals at home is a simple way to save.
According to Miriam Caldwell, a writer for The Balance, going from eating out every single day to eating at home can save you more than $40 to $50 per week.
To maximize your savings, Liz Frazier, a contributor to Forbes Media, recommends having a plan for your meals each week.
If you know exactly what you need to purchase before going into a grocery store, you can avoid making impulse purchases and can find coupons ahead of time.
2. Cancel Subscriptions
There’s nothing wrong with enjoying streaming services or cable television.
However, if you find that you are not taking advantage of a service enough and aren’t getting your money’s worth, NerdWallet recommends canceling that subscription.
Reducing your spending on unnecessary subscriptions, gym memberships and other forms of entertainment can significantly lower your monthly expenses.
Caldwell suggests shaving off $5 to $10 in every category you can, then adding that money to your savings. Don’t forget to evaluate things like your cell phone bill (do you really need unlimited data?) and magazine subscriptions, too.
3. Pay in Cash
It can be difficult to grasp just how much you’re spending when you’re paying with a credit card or debit card.
That’s why Caldwell says you should pay in cash whenever possible.
In addition, giving yourself a specific amount of cash to spend for the week can help prevent you from overspending.
At the end of each day, NerdWallet advises putting whatever spare change you have into a piggy bank or savings account, not a checking account.
4. Pay Off Your Credit Card Debt
If you have unpaid credit card debt, Caldwell recommends paying it off as soon as you can. Interest rates can cause the amount you owe to quickly snowball out of control.
Once you pay off the debt, try to always pay off your credit card each month moving forward. If you can’t afford to pay off each credit card, Frazier says to pay off your credit cards with the highest interest rates first.
Paying off your credit card debt will also improve your credit score, so you’ll have a better chance at a good interest rate on a loan down the road.
5. Cut Down on Your Energy Usage
According to NerdWallet, making changes to your energy usage can lower your electric bill by up to $550 annually.
To conserve energy, Kelsey Sheehy, a writer for NerdWallet, proposes that you change your thermostat when you’re out of the house. Your home usually doesn’t need as much air conditioning or heat when no one is inside.
Ensuring that windows and doors are sealed and not letting the outside air inside can also prevent you from paying an unnecessarily high electric bill.
Finally, adding dimmer switches to rooms is another useful way to save money, according to Sheehy. And don’t forget to unplug “vampire” appliances like printers and phone chargers when you’re not using them – they can still draw energy that costs you money.
Minster Bank Helps You Reach Your Financial Goals
Even with a low income, with diligence and time, it’s possible for you to save money by following these tips.
At Minster Bank, we can work with you to help build up your savings account. For advice geared specifically toward you, speak with a financial advisor.
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Published by Minster Bank
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