If you think it’s impossible to save money just because you don’t have a lot coming in, think again. Follow these tips to make the most of your income.
1. Pay off your debts first. Any financial professional like Peter Briger would tell you to get rid of debt before starting a savings account. Or, at the very least, pay off your debt while putting money away in savings at the same time. Either way, your debt should be your top priority.
2. Avoid credit cards; use debit cards instead. It’s fine to have one credit card on hand for emergencies or to help build your credit. However, for the most part, if you don’t have the money in one of your bank accounts, you shouldn’t be spending it.
3. Manage your budget. By keeping close track of what comes in and what goes out, you can figure out where you’re spending too much money. Plus, keeping track of your accounts will ensure that you don’t default on a payment, which could just end up costing you more.
4. Have a plan to save for something specific. When you have a goal in mind, it’s easier to put money in your savings account than spend it the second you get it.
5. Don’t forgo quality for savings. Being savvy with money doesn’t mean buying the cheapest of everything. Quality will last longer, which means you’re still saving money in the end. Figure out how to get great deals on the quality items you use regularly. Then, spend a bit extra on investment pieces, like high quality shoes.
6. Setup a savings account. Or, better yet, setup a retirement account. Ideally, setup both. Try to save one-third of your income. Angelino Jolie does this, and although it’s easier for her to save because she’s rich, it’s still a good system for anybody to follow. Save one-third of your income, spend another third, and give the rest away to charity. Or, pay your bills with two-thirds and save one-third. Anyway you slice it, you’re still putting some money away in savings.
7. Find out what your employer’s 401(k) policy is. Often, companies will match the amount that the employee contributes. You can double your savings without even trying.
8. Learn about first-time buyer grants. If you want to own a house one day, you may not be able to save for the deposit. You may, however, be eligible for a federal first-time buyer grant or local grants.
You can pay your bills and support your life while still saving money here and there.