Saving money is hard. There are always things you need to buy, debts to pay, and other uses for your hard-earned dollars before you get a chance to tuck them away. Once you’ve paid everyone and everything off, you only really have a moment before another bill comes along to shake you down for what’s left.
When you’re broke, in major debt, or living paycheck to paycheck, saving money is next to impossible. You have to live on an airtight budget without spending money on anything non-essential. Putting money away for a rainy day or retirement sounds good and all, but having money to keep the roof over year head is more important.
Yet saving and managing your money is not completely impossible when you’re broke. Whether you have $20 to your name or owe thousands of dollars, there are ways for you to pay off debts, but the essentials, and have some cash leftover in the end. By following these simple guidelines, you might not only find yourself out of debt, but building a small nest egg for your future before you know it.
Get out of debt and avoid taking on more debt.
No, I’m not trying to make this sound easy. Paying off your debt is one of the hardest things you can do. (That’s why it’s called debt, I suppose.)
Taking on more debt, however, makes getting out of debt much harder. It also makes saving money impossible, as you’ll inevitably used your saved cash to pay off debt or possibly create more debt. This is sometimes unavoidable when you’re broke if your debt keeps on racking up fees. Yet if you buy the essentials (food, toiletries, gas, etc.), spend $0 on things you absolutely don’t need, and find ways to keep yourself entertained at home for the low price of free, you could easily save more money than you currently are. This will help you pay off debt faster than you were before.
The longer you go without paying your debt, the more fees get tacked on. While your debt might not be avoidable, fees like late payment fees are. They could mean the difference between paying off your debt months from now and paying off debt decades later.
Live within your means.
Treating yourself is great and all, but only when you can afford it. If you can’t afford to splurge on a nice car or any car, consider alternative options like public transit. If you can’t afford home payments, maybe think about renting before you take out a mortgage. If you won’t be able to pay for something in the near future, don’t put it on your credit card now. It’ll only add to your existing debt.
Living within your means might lead to missing out on the latest film or buying a new phone. It could also mean not taking a summer vacation. You can always get to those things when you’re debt-free and have money in the bank. The fear of missing out might be real, but it’s better to be left out than continuously broke.
Cancel all those useless subscriptions.
Everyone subscribes to something they don’t need. If you have a smart phone, you probably don’t need a home phone. If you have cable, ask yourself how many of those channels you actually watch and consider a solution like Netflix or Hulu. If you’re paying regularly for something that you want but don’t really need, you’re basically flushing money down the toilet.
Learn how to cook.
Eating at home and preparing your daily lunch is essential. If you don’t know how to cook, though, you’re going to be more incentivized to eat out and waste more money. If you teach yourself how to cook through free online recipes or even recipes on the back of a box, you’ll be better off than you were before. By learning how to cook, prepare, and even present food, you’ll make appetizing dishes that will keep you far away from takeout and delivery. This could end up saving you thousands of dollars in the long run.
Make a plan to save.
Assuming you’ve gotten out of debt, scaled back on your purchases, and started eating at home exclusively, you can now put away a dollar or two. Before you reward yourself with a meal or a trip to the movies, first make a commitment to saving a minimum amount each month. You could start low and put $20 into your savings account, but you want to have a goal that’s realistic and could be achieved on the regular as you still pay your bills and afford the necessities. You can increase the amount you save over time, but make sure you always stick to it. Also, never use your saved money to buy non-essential items. This will only deplete your savings and could put you further into debt.
Saving money is possible for everyone — even the brokest of the broke. By getting rid of debt and focusing on what you need, you can easily create an emergency fund and get started on investing in your retirement. If you take a step back and look at everything you spend money on, from rent to vending machine candy, you’ll find a metric ton of places where you could easily stop spending and start saving like a pro.