One of the most stressful financial situations is not having a safety net. But that is the norm because we live in a world where the basic necessities are expensive. House rent is costly, commuting to work is becoming expensive by the day because of the road structures.
At the same time, you want to entertain yourself during weekends or when you are not working. Living within your means can become extremely difficult, and most of the time, you find yourself suffering before your next payday. Luckily for you, I have a solution to save your stressful financial situations and guide you to have a safety net at all times. Below is a five-step by step guide on how to save money even on a fixed income.
Step 1: Record your expenses: The best way to learn your spending habits is by recording your expenditure. You can categorize each expense, such as house rent/mortgage, groceries, transport/fuel, and television subscription. You should use a notebook, phone or laptop, or whatever is easily accessible. Ensure that you record your expenses every day before sleeping. You can do this until the next payday.
Step 2: Budget within your income: Now that you are aware of your expenses. It is time to budget your income. You should be able to measure your budget against your income to avoid overspending. Besides, you will also find out the areas that you spend a lot of money.Step 3: Find ways to cut your spending: This is a critical step towards your saving habit. If you are the type of person who eats in hotels or cafes during lunchtime, it is time to substitute that to carrying packed lunch to your workplace. You will be surprised at how much you will save at the end of the month. Find other alternative ways to will reduce your expense.
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Step 4: Set saving goals: The best way for you to save is by setting a goal. The goal can be short-term or long-term. For instance, short term goals might include buying a new television set or a new phone; you name it. You can achieve that in three to six months. Long-term goals might include buying a piece of land, a house, or setting up a side business that would improve your financial situation.
Step 5: Prioritise your spending habit: It might be challenging to decide between entertaining yourself and supporting your family members, which comes first. It is crucial to find the need to spend before spending. Therefore, you should take the time to prioritize your needs before spending?
When you apply these five-step guide, you will save money and have a safety net in the process.Photo Credit: Getty