Posted On18 Dec 2019
When money is tight, and you’re earning an entry-level salary, saving can be the last thing on your mind. But of course, you still dream of traveling, buying a car, or maybe even a dream house. How can you make it happen when you’re just trying to get by?
For someone who’s living from paycheck to paycheck, every cent counts. When it comes to your earnings, you need to think about both your current and future needs. Here are simple ways to manage your money better, even if you’re earning minimum wage.
Identify your spending priorities
Before you can save, you need to know on which items you should be spending your money on, and which ones you shouldn’t. By determining your priorities, you coincide your financial goals with your spending habits. The top items on your list should reflect what’s most important to you—they are what you should focus your money on. As for the rest, you can reduce your spending on them, so you don’t fall short on your priorities.
Keep track of your spending
You’re well aware of how much money goes into your bank account every month, but do you know the expenses you generate month in month out? Many people actually don’t track their expenses on any given month—don’t be one of them. Tracking your spending is a necessary step so you can identify if your money is going to something worthwhile or not. This will help you create financial awareness. When you know where your money goes, you’ll know which habits to change to make your salary work better for you.
Take care of your debts
Debt is a vampire that drains your financial health. When it gets out of control, you won’t have money left for anything else, and so paying off your debt is an important strategy to achieve financial freedom and stability. To pay off your debt, you only need to do one thing: pay the maximum amount you can handle every month, then rinse and repeat until your debt is fully paid off. Of course, this is easier said than done, but you have to discover a debt elimination method that works best for you and stick to it until you are debt-free. Moving forward, avoid accumulating any more debt, especially those relating to credit cards.
Set savings goals
Everyone has a reason to save money wherever they are in life. Start by thinking what you might want to save for, whether it’s a new car, new home, getting married, an exotic vacation, or maybe even your retirement. Then compute how much money you’ll need and how long it will take you to reach it with the average amount you can save every month. If you’re saving for something long-term, such as retirement or your child’s education, it may be worth considering to put your money in an investment account. Choose safer investments, such as treasury bills, mutual funds, and money market funds, to reduce your risk of losing money.
Eliminate unnecessary costs
Once you’ve identified areas to save, try to spend less by trimming your daily expenditures. Consider memberships and subscriptions that you could live without. Pay your bills on time to avoid late fees. Fond of take-outs and order-ins? Food is one area where you can make great strides in savings, especially if you can prepare your own meals instead of eating out. As a side benefit, you’ll also be eating healthier, since you know exactly what goes on into your food.
Put a cap on your unbudgeted spending
You have to pay your bills, but you also need to enjoy the fruits of your labor from time to time. With that in mind, you need to find the right balance between spending and saving that doesn’t derail you from your future goals. If you have any money left over after subtracting your ‘must’ expenses from your income, spend it on fun and entertainment, but only up to a certain amount. Ideally, this should help free up more money for savings.
Use saving tools
Thanks to technology, there are now more apps than ever to help you effectively save money. Generally, these apps can help you track your spending, create a budget, and create savings goals. Some of these apps are free, while some charge a subscription. Some may even be linked to your bank accounts. Look for an app that lets you monitor all your account balances, budgets, financial transactions, and spending habits so you can make smarter decisions with your money and achieve your financial goals faster.
Practice self-control
These days, everything and everyone wants you to spend your money, even if it’s for something you don’t really need. The temptation will come from all fronts—whether it’s that bagel from the cafeteria or that online shoe ad that keeps popping on your screen. If you give in to every whim and craving, you’ll be left with very little money at the end of the day. It goes without saying that without practicing restraint, you won’t be able to move toward your financial goals. If you want to have healthy and stable finances, stop making excuses, take control of your spending habits, and figure out which uses for your money actually make sense.
Seek out financial advice
You don’t have to go at it alone. Keep educating yourself, learn continuously from the success of others, and don’t be afraid to ask financial professionals and mentors for advice, especially those that relate to investments and debt. Pay attention to the tips they have to offer, internalize them, apply them, and tweak them to suit your unique financial situation.
Should you shift to a new career?
Sometimes, no matter how much you tighten your belt, it’s still impossible to set aside a portion of your salary for savings. In this case, perhaps it’s time for you to look for another job that pays better. If you believe a career shift is on the horizon for you, prepare for it by updating your resume today. Send us your resume for a free evaluation so you can see how it would fare against ATS and gain insights on how it can be improved. Let us write your resume with our professional resume services with a 60-day interview guarantee.
