So you're living paycheck to paycheck but you want to start putting a little something away for a rainy day?
Whether you want to save money to make a large purchase, pay off our debts, or simply add to your retirement fund, it is possible to save money when you are broke.
The first step is to find out where this money is going to come from. It may be hard to imagine squeezing any extra money from your paycheck, but with a few simple modifications to your habits, you will be stocking your piggy bank in no time at all.
Your money for savings needs to come from either reducing your expenses or increasing your income.
Cut Expenses to Save Money
This is often the easiest way for people to start saving money. But it takes some knowledge about how you are currently spending your money in order to see where you can save money.
For at least one week, track your spending habits so that you can see where your money is going. For most people, this is going to be a big shock, especially when you see just how much money you spend on certain things.
Then start looking for places that you can cut your costs.
For most people, the best place to start is with their food expenses. It's usually much cheaper to eat at home, so if you find that you eat out a lot, then start by eating all of your meals at home. You'll also find that you can save money at the grocery store by planning your meals around store specials or using generic products instead of name brand goods.
You also may be able to cut some entertainment costs. Rather than going out to the movies, for example, stay home and rent a movie. A membership to a company such as Netflix costs a little bit of money, but can save you a lot in the long run.
Once you've started making these small cuts to your spending habit, you'll begin to see more ways that you can decrease your spending.
Don't forget to put the money you've saved into savings though. It's easy to see that you have extra money and spend it on other things. It may require some diligence at first, but make sure that if you save $10 by eating at home instead of eating out, that you put that $10 into your savings account.
Increase Your Income to Save Money
Some people don't like the feeling of deprivation that may come with cutting your spending costs. For these people, it's a better idea to try to increase their income and save the extra money.
When people think about increasing their income, the first thought is to get a second job. This is a great way to earn extra money if you have the time and energy to do it. Unfortunately, many people do not and drop the idea of earning extra income right there.
That's unfortunate because there are definitely other ways that you can earn a bit of extra money without a lot of sweat.
For example, you can sometimes cell your blood or participate in studies to earn some extra money. You can take surveys, or start a blog that earns AdSense and affiliate income. Perhaps the best way to drum up some extra cash is to go around your house and collect the things that you no longer need. Then sell these things online or at a garage sale.
As with cutting your costs, once you start to find some simple ways to earn money, it becomes easier to find even more ways to increase your income. Again, don't forget to put this extra money in your savings account. It doesn't help you to increase your expenses along with your income.
Saving Money When You Are Broke
For most people, the difference between being a saver and a spender can be achieved simply by changing your mindset. If you really set out to save money, you can do it, whether you're broke or not.
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