With the holidays quickly approaching, many people become anxious about what they need or have to pay in order to afford holiday expenses. There are multiple ways to go from living paycheck to paycheck to saving money and preparing for the holidays. The reality is that life happens and saving can be tough, but too often we spend money on small items that we don’t need. These inexpensive pleasures can deplete a monthly cash flow. Here are three easy ways to increase your piggy bank.
- Start saving the amount over the hundred dollar mark on your paycheck. At one point it was hard for me to save a specific amount out of each paycheck. When I got paid anything extra would be spent before I reached home. Typically, I would spend the amount on miscellaneous, unnecessary items. I decided to create a savings with the overage. For example, if my pay was $892.03 then $92.03 would go to savings or if the pay was $805.57 then $5.57 would go to savings. I admit I wasn’t able to do this every time, because life happens. However, I stuck with it for about three months and found that when life did happen I was able to overcome it.
- Pay bills as they come in. Think about it this way, if a bill is paid late (or not at all) it can take up to three months to bring that one bill current. Just imagine if it was multiple bills late or not paid at all. What happens if you pay your bills too early? In some cases when a larger bill is paid too early it leaves minimum funds available to pay for other bills or savings. It never failed. My bills would be paid, but I wouldn’t- have any money left. I found that two of the larger bills that I was paying three weeks early, left me with no money to live on. You should make payments early if you can but, if it leaves no money left for other essentials such as groceries or gas then it’s time to reevaluate. Once I reorganized my bills it left me with extra money and a larger amount to put into savings.
- Cut back on eating out for lunch. Statistically, the average person’s spends about $1200.00 annually on lunches out. That breaks down to about $100.00 a month. This was a tough one for me to eliminate, since eating out is so convenient. I began tracking the amount of money that I was spending eating out for lunch. Typically, I would spend $10.00-$15.00 a day. That equates to $300.00-$450.00 per month. This practice would leave me with no money a few days before each pay day. I set a budget for half of what I was spending. With this adjustment I was able to save $150.00-$200.00 a month.
By making these adjustments with my bills and the way I manage money, it has given me the ability to increase my savings and create a rainy day fund. My biggest lesson learned is that it is important to know where and how my money is being spent. Remember, every penny counts when life happens. Happy savings!