Saving Money While Living on a Budget

More and more people today are living from paycheck to paycheck. In most of these situations money is not being saved as it should be. Many people are not prepared for emergencies and are left stranded when one strikes. Most people feel if they cannot save large portions of their income it is not worth saving money. This is a very wrong trap to fall into. Personally, I save $50 a week in a separate account. This may not seem like much money but after a few months it begins to add up. Like many others, I live on a limited income and a biweekly paycheck but am able to manage to save money.

Now let me give you a personal example of a worst-case scenario that happened to me. My car had several issues come up at the same time. It needed new tires, CVG joint, oil change, and transmission flush in the space of three weeks. On top of all this there was a storm that caused a severe power outage that lasted for several days. So on top of the car expense my food also needed to be replaced, and I had to buy food and water to last through the outage. I used my savings reserve to cover the unexpected expenses in was able to ride everything out. My unexpected expenses totaled over $900.

My friend on the other hand, makes twice as much as I do a month and has cheaper rent. She did not save any money for emergencies. The fuse blew in her car and could not be looked at for repair immediately. She could not afford a rental car for a day or two because she could not afford the required deposit of $250. Her car was repaired by her friend for free. Since she lives in the same area, she was also hit by the same power outage. When I spoke with her I found she had no money for food or water to last through the outage. In essence, she was completely stranded.

Now ask yourself, which situation would you rather be in? And if you are living from paycheck to paycheck how do you save?

Determine what you really need
Many people money on extras in their budget they do not need. Extra minutes on your monthly phone plan you pay for and don't use, extra channels or features on your cable, are only a couple examples of items you don't really need. After reviewing my budget and reducing what I spend money on I discovered I was spending almost $300 on items I really didn't need.

Write down your bills and set a budget
First, write down your monthly pay. Then write down your rent or mortgage expense and all your other bills. This determines approximately how much you have to spend on essentials each month. Then set a budget for all other expenses - such as food, gas, clothing, and other items. Make sure your monthly pay does not exceed your expenses and set your budget to allow for saving some portion of your income.

Save small amounts in a separate account
The key to saving is by putting your money in a separate account. You will not spend what you do not see. Each week put a set amount in this account. Use the money you put in this account for emergencies only.

Save money everywhere you can
Take advantage of online classifieds, people getting items away, and auction sites to find items. Thrift and discount stores allow you to save money on larger items. Unless you absolutely need to, buy your food only when it goes on sale or when you can use coupons. If you do use coupon, try to go to stores that will double them. Also, when you go shopping make a list. Unless you absolutely know that you left an item out, buy only what you have on the list.

Sell items in your home that you no longer use
Everyone has items in their home they don't need or use any more. Set these items aside and put together a garage sale, advertise them in online and newspaper classified ads, or post them on online auction sites. This will not be a constant source of income, but it can give a temporary boost to your budget.

Find a second job
Once you review your income and expenses, you may realize that your expenses are higher than your income. In this case, you will need to find a second job or find a way to cut your expenses. If you can not find a traditional job, try searching the Internet for online opportunities that you can fit into your schedule. Keep in mind, that if you choose that option you will have a lot more competition since many people want the opportunity to work from home.

Remember that it is extremely important to save money in case of an emergency - you never know when one will strike. The amount you save is not as important as the fact that you are attempting to save. Having some money set aside is better than having no money set aside at all. By reviewing your income, setting a budget, and opening a savings account you are well on your way to being prepared for emergency when it happens.