When you have an entry-level salary, you dread revealing how much money you save in a month because, well, there's none. Your Monthly bills and rent take up a larger share of your salary, and that's understandable.
However, you need to figure a way to free up more cash at the end of each month – repeatedly – if you are to make any progress financially. In other words, you need to save money each month regardless of whether you are paying monthly bills and rent.
It’s challenging at first, especially when you are inundated with bills and other responsibilities, which constantly require money to no end.
It may even seem like a miracle if you consider saving little amounts for yourself when on a tighter budget. But there's a way out, and this post will highlight some of these ways and how you can start saving despite having bills chasing after your tail.
- Take a Hard Look at Your Spending
You must take a hard look at your current spending if you want to make good about saving money each month. Track every penny. It's a challenging task to do especially if you haven't been budgeting for your money or considering how much money you spend each month.
Tracking how you spend your money will have a great impact on your financial life. However, recurring monthly bills and how you spend money can interfere in the long run.
For instance, if you have a monthly magazine subscription, it may affect how much money you save. So cutting them down can greatly increase the amount left in your bank account.
Cut the cord on these subscriptions and you will soon experience some drastic changes in your savings – they’ll even increase significantly over time.
Besides subscriptions, you have bi-weekly and daily expenses eating up on your savings. Identify the expenses and decide whether they are worth it. For example, you find yourself eating out every day while you could prepare home cooked meals at an affordable rate.
Have a budget for food and stick to it. Shop for groceries every week and make sure to eat home at least four times a week to save on unnecessary weekly expenses.
You could also brew your own coffee at home once in a while, even take it with you to work. If you do these things consistently, you’ll have a lot of money left for saving.
- Revamp your shopping routine
You have to rethink the way you shop if you want to save some money each month. It's good to express your style in fashionable clothes. But you don't have to hit a Forever 21 shop to make your point clear.
You risk putting a dent on your bank account whenever you do that. You’re likely to even drain your income in the name of making a fashion statement. This is not a prudent money move. Therefore, you need to rethink the way you shop – without sacrificing style in the process.
Here’s how: Do away with clothes you hardly wear. Clean up your wardrobe and remain with only the clothes you love. Then fill up your wardrobe with clothes that’ll last you an average of 3 months. When the three months are up, rotate the clothes or remove the ones you hardly wear anymore and bring in more new clothes.
Remember, you can't buy more clothes within the three months. If you do this consistently, you’ll save up on money used on clothes. Why?
Because during the three months you’ll not spend money on clothes. This leaves you with a good chance to save your money each month, for the next 3 months or so. Make sure you buy clothes you actually need and love to avoid getting tempted to buy more.
- Consolidate all your debt
So you are inundated with huge credit card debts since graduating from college. You are not alone. So many people are floating in the same boat with you. And this can cause a huge panic especially when you have monthly bills to pay.
Instead of worrying about whether to pay your credit card debt or your monthly bills first, try and consolidate all your debt in one card. Or apply for a nation 21 personal installment loan at lower interest rates to help cover your credit card debts while you pay off your monthly bills.
When you consolidate all your debts in one place, it gets easier to pay them off. In fact, it provides clarity when you're too scared to tally up how much debt you are in.
Then again it makes you feel better. Securing a loan – at lower interest rates – helps eliminate all your debts at a faster rate, not to mention it helps clear up some cash for saving at the end of each month.
Remember, when you get into the habit of contributing savings to your bank account every month, it becomes a habit that improves your financial life. And changes your money perspective for the better.
- Get a second stream of income
If your money can’t cover all the bills at the end of each month, you need to get a second job. Having a second stream of income can practically provide a solution to all your money saving needs. Because, let's face it, having no money is tough.
Life gets even tougher when you have bills and rent to pay – when you have only one reliable source of income. So to ease your life (and that of your family) get a second job.
Having a second stream of income will keep you afloat while you pay off your debt and reduce monthly expenses. Also, you get to boost your income with additional savings on the sidelines with each month.
While a second job is exhausting, it pays off eventually. As it increases your income as well as the amount of money you can save after paying off your monthly bills and rent.
- Live Within Your Means
When start spending money like your friends and living outside your means, you'll end up in a financial crisis because you’ll start to spend more than you earn. There's nothing detrimental to your finances than this. So live within your means, and start saving money right away Period.
Everyone within your circle of Friends will start to save money as well. And even if they don't, you have a personal satisfaction of having your own financial path. Because you start saving money and still be left with enough to pay your bills and rent every month.
Understanding how you spend your money is the beginning of shaping your financial life. It may be difficult at first to make any saving from an entry-level salary, but with a good plan and following the above tips, you will soon find it easier to start saving money each month.
Remember to take a hard look at your current spending, rethink the way you shop, get a second stream of income and live within your means. That way, you’ll be on your way to financial freedom, and a happy debt-free life.