How to Save Money When You’re Already Struggling


( – What Should You Focus On to Save Money When You’re Struggling?

  • New Job
  • Budget
  • Second Job
  • Debt

Answer: Budget. Here’s why…

Living paycheck to paycheck can be incredibly difficult, especially when unforeseen circumstances arise that further strain one’s finances. Add to the mix rising prices of housing and essential goods, and many Americans are finding themselves in a sorry state. In short order, a person can find themselves swimming in debt with no hope in sight.

For those who do find themselves living paycheck to paycheck, one of the best ways to save money and begin to get ahead is to begin budgeting. Many people immediately cringe when the word budget is even mentioned. However, knowing where money is being spent is vital — especially when every penny counts.

Keep Track of Expenditures

Knowing exactly how much money is being spent, down to the penny, is invaluable information. Most people would be shocked to see exactly how much money they waste on small, “insignificant” expenditures and eating out.

Keep a record of each transaction for a week, then break them down into categories. Which of the expenditures were necessary, and which could have been eliminated to save a few dollars?

List Out Expenses

Some expenditures, such as bills, cannot be avoided. It’s important to know exactly how much money needs to be set aside each month to cover them. These essential bills will fall into two categories: fixed costs and fluctuating costs.

Fixed Costs

Fixed costs are those that do not change from month to month. Examples of these would be mortgage or rent and car payments. These fixed costs are easier to plan for because they stay the same.

Fluctuating Costs

Unlike fixed costs, fluctuating costs are those expenditures that are necessary, but the exact costs change each month. Utilities, groceries, and gasoline are examples of fluctuating costs. Due to the fact that these aren’t stable, they make budgeting a bit more difficult. The best bet is to set aside enough money to cover them, and anything left over at the end of the month can be added to savings.

Irregular Expenses

Not all expenses are required per se, but most households will want to keep enough money set aside to cover them nonetheless. These include holidays and birthdays, or unforeseen costs such as car and home repairs.

Do Some Math

Once the monthly costs and excess expenditures have been identified, it’s time to calculate the total amount of money that needs to be set aside. Now, calculate how much income enters the home each month. Subtract the total required costs from the total amount of income and see how much is left.

This is where knowing exactly how much was spent, and on what, becomes important. Cut down on excess expenditures on fast food, gas station snacks, and other unnecessary purchases. Once those are eliminated, or at least reduced, it will become easier to cover the bills each month. After a while, one may even begin to pay off debt, and possibly even put money away in savings.

As the old saying goes, knowledge is power. This is especially true when it comes to balancing a budget. The more a person knows about their spending habits, the easier it is to rein them in and become more financially responsible.

To see some other money-saving tips, check out our article on how to preserve income in an unstable economy.

~Here’s to Your Survival!

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