Saving money on a budget is achievable. Having a savings plan is important as it prepares you for unexpected expenses as well as unexpected pleasures. For example, you should have a substantial savings which can cover an unexpected flat tire or broken refrigerator and you should have a savings that can cover an unexpected birthday celebration or vacation day. Life is full of the unexpected and when you live on a tight budget you can often feel as if there simply isn’t any extra money with which to create a savings. You will need two saving accounts; the first savings account will be for your emergency needs and the second savings account will be for your unexpected pleasures. Here are some tips on saving money want a tight budget.
Tip One: Create a monthly budget. You may not have created a monthly budget until now; however, this is essential for healthy financial living. Your financial choices cannot be based on demand; rather, they should be based on preparation. A well-prepared budget will have allotments for clothing, food, gifts, rent or mortgage payment, and utilities. Many people on a tight budget choose to avoid budgeting but instead they find themselves frivolously spending excess money on food and other necessities. When you create a budget you will have an allotment for food which may mean that you need to learn how to food shop with coupons or it may mean that you need to change where you shop. By creating a budget you will also be able to budget your savings.
Tip Two: Consider setting aside 10% of your income for emergency savings and 5% for unexpected pleasures. These two savings should be budgeted into your monthly expenses. When this amount is automatically taken off of the top of your pay and set aside you will learn to live without it and it will create a financial cushion that will catch you when you really need it.
Tip Three: Determine what you really classify as an emergency and as an unexpected pleasure. Write down your definition of both of these terms and before you dig into your savings accounts read over your original definitions in order to determine if you have a valid reason for reaching your account.
Saving money is possible even on a tight budget. In today’s economy many people are learning to live with less. You will find that if you properly budget your monthly expenses that you will learn to food shop for less and clothes shop for less and that you will actually find money within your tight budget for savings.
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