If you’re overspending and living paycheck to paycheck your financial situation may be less than ideal. However it’s not the end of the world. As a financial planner I help people pay off their debt, live on less, set a spending budget and start saving every day.
If you want to stop living with $0 in the bank and start saving the first step is to spend less – or start earning more, but we’ll focus on the spend less for now. The second step is to actually start saving. Once you find ways to cut your spending in one place the temptation is to spend it somewhere else, but avoid that urge.
After we go through the list of different ways you can cut spending it’s important to actually save that dollar amount. If at the end of this exercise you save $20 a week then set up automatic transfers from your checking to your savings every single Friday. If you calculate that you can save $150 per month then set up automatic transfers on the first day of every month. Do whatever it is that you need to do to start saving money.
Here are five things you can cut out of your budget to save more money:
An expensive cable bill
At this point in life cable is really more convenient than anything else. Most television shows can be downloaded the next day and cable is only necessary if you want to watch the shows as they broadcast. Movies can be streamed via Netflix and a $9 per month membership is a lot more affordable than a $75 cable bill.
If you want to start saving money you’ll have to make sacrifices. The key is to find cheaper alternatives so you don’t need to completely cut out all luxuries, you just need to cut them down.
Name brands
Popular personal finance website Bankrate says being a smarter shopper can help you save money.
“Stop buying things without shopping around for the best price, says Keith Klein, CFP professional and principal at Turning Pointe Wealth Management in Phoenix. Make a commitment to comparison shop for essentials and look for coupons and sales online or in your local newspaper. Then, buy the lowest-priced items.
Don’t stop there. Take the difference of the amount you paid and the amount you would normally spend on the item and put that money into a savings account. Even if it’s just a few dollars per shopping trip, those small sums will add up, Klein says.”
Dining out at restaurants
If cooking isn’t your thing investing the time to learn can help save big bucks. It may not be fun and it is a lot of work, but it can help substantially cut down food costs. If you have zero interest in learning to cook grabbing take out is a cheaper alternative to eating out in restaurants. Although for the record cooking at home is the absolute cheapest option.
Take out doesn’t require appetizers, drinks or a tip to be added on to your bill. Therefore picking up take out and eating at home can help save money.
Paper magazines and books
I’m old school, I like the smell of paperback books and every now and then I indulge in a fitness, fashion or gossip magazine. However they are both definitely expenses that we don’t need to have and at $19 a book and $6 a magazine I think we can all agree that those costs can be cut.
The electronic version (although maybe not as portable or preferable) is always cheaper. Sign up for magazine subscription services like Texture (formerly next issue). You can also download electronic versions of most books on Amazon and Barnes and Noble.
Home decor
I love fresh cut flowers and colorful throw pillows just as much as the next girl, but if you want to save money they have to be cut out. If you’re living on a budget there’s probably no room for $40 decorative pillows just to make your room look nice.
When starting to save money it’s only the essentials that count, cut out all extras a.k.a. the unnecessary costs.
