From supply chain issues, unfavourable weather conditions, and rising fuel prices, the cost of living is at an all-time high. If you’re living pay day to pay day and don’t anticipate getting a raise anytime soon, you might want to consider some methods to stretch your money further.
This article will look at simple strategies to cut back on some of your spending. So let’s get started.
1. Set Financial Goals
Setting financial goals is one of the most critical steps in improving your financial life. Don’t worry if it feels premature based on your current situation. Setting small goals and following through on your plan to achieve them is powerful.
Having a clear goal helps you be more diligent with your work, savings, and spending. Concentrating on your financial goals can give you the clarity and drive needed to make smart financial decisions.
2. Track Your Money
It helps to measure what you’re currently doing with your money to get the most out of it. Your regular monthly expenses, such as rent or a mortgage, car payments, and groceries, might be obvious. But the lower, more frequent costs often go unnoticed until the end of the month once it’s all added up.
Tracking your daily spending for a month or so, including every purchase you make with cash, debit, or credit, as well as every bill you pay, is valuable practice.
You can do this by taking a notebook or storing all your receipts and entering them into an online spreadsheet.
Several different apps can assist you in assessing your cash flow. These include:
- Mint – Can be used for all financial goals.
- Goodbudget – Best app for beginner budgeters.
- You Need a Budget (YNAB) – Best app for stricter budgeters.
- QuickBooks Online – Best for tracking small business finances.
- Expensify – The best app to use for business expenses.
3. Set Up a Budget
One of the most crucial financial skills you can acquire is the ability to stretch your money while on a budget. Along with helping you stay within your budget, it can also speed up the process of reaching your financial goals.
Making wiser choices and knowing what is and isn’t necessary is what it comes down to.
You need to know how much money is coming in, how much money is going out, and what you plan to do with the balance. Start by keeping track of your income and expenses, then decide how to spend your remaining funds based on your priorities.
The 50-30-20 rule says you should spend 50% of your after-tax income on necessities, 30% on fun, and 20% on savings. That’s not a bad guideline to follow. Also, you can adjust this ratio to suit your needs and lifestyle.
4. Avoid Overspending
What may seem like a few weekly swipes of $10 on your card can easily add to significant credit card balances or spending above your means.
To lower overall spending, consider these easy changes:
- Order groceries online and have them delivered to your door to avoid impulse buying.
- Limit your online spending. In other words, tell yourself you’ll only buy from Amazon once (as an example).
- Keep a running list of what you need or want, and only buy the item once you’ve found the best offer.
- Don’t subscribe to retail mailing lists that encourage spending.
- Include a category for personal expenses in your budget and set aside money you can use guilt-free whenever you like.
5. Plan Ahead
If you’re like most people, food makes up a big portion of your budget. Your monthly food budget can all add up when you factor in dining out, takeaways, and your monthly grocery shop.
You may save a lot of money each month if you take a little time each week to prepare your meals. The more money you can save by meal planning, the better.
A laid-out meal plan can prevent overspending at the supermarket. You could also avoid spending on unplanned outings to fast food and local restaurants.
Although it might be tough to get it right, meal planning and bulk cooking are two of the best strategies to reduce your food expenses. It’s impractical to cook from scratch every night if you don’t have much free time. Make sure your strategy includes some quick wins and options from your pantry.
6. Be Mindful
Most of us make impulse purchases at least once a month, and often, small purchases may creep in and wreck your budget without you ever realising it. One way to avoid this is to practice mindful buying.
To do this, give yourself plenty of time before making any large purchases, allow yourself to carefully think them through, and disable super-fast payment options like face ID and thumbprint payments. Just entering a lengthy card number can make you think twice.
Final Thoughts
You are not alone if you are under a lot of financial pressure, and it’s still possible to retain financial stability during these tough times. By cutting your expenses and creating a margin in your budget, you’ll leave room for things that matter.
You’ll be surprised at how much further you can stretch your monthly budget with these few clever savings tips. A simple thing like tracking your spending is a great start!
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Sources:
- https://www.sofi.com/learn/content/ways-to-stretch-your-money/
- https://bethebudget.com/how-to-stretch-your-money/
- https://www.glamourmagazine.co.uk/article/how-to-stretch-money
- https://www.rent.com/blog/stretch-your-money/
- https://www.cnbc.com/select/best-expense-tracker-apps/
- The Importance of Understanding Credit Scores and Improving Your Credit – Site Title (thelifestylelegacy.github.io)
