Just from the fact you searched for save and broke in the same sentence, I’m guessing that you want to do one of two things. You’re either sick of your lifetime savings being zero or you’re desperate for a way to make the limited dollars you have each week stretch further than they do. If you’re really that broke what you actually need is help with both. Saving money and making savings work together, trust me.
There was a time when my cat was in danger of losing his biscuits, I was that short of cash for lunch. Today, things are not always perfect, but I’ve always got some savings to fall back on and I know how to make the most of my money when work’s a bit slow. Start making changes immediately and it’s possible for you to be in the same position.
Set up a savings account right now
- This is really important. Don’t put off opening an account because you haven’t got a ton of spare cash. Think like that and you’ll never get into the saving habit. Check out some of the best savings accounts and find one that suits you.
- I started by saving just $10 each month. If I’m being honest, it wasn’t easy but I got used to doing without it. Even a small amount each month is better than nothing at all, and you can send the money straight from a checking account using a direct debit, so you aren’t tempted to spend it instead.
Here’s the really cool thing that I didn’t really realize until I’d some cash saved; the more money you have, the better value for money you can get. There were times when I used to gaze longingly at the multi-buy deals in the store, and online. I’d have to count cents out for one bottle of hair conditioner when buying three at once could have gotten me a discount. Now, with better budgeting and saving, I get to choose the deal. This means I get to save even more money most times that I shop.
Work out what you’re spending
- Saving is never going to be easy if you don’t know how much you spend. Remember that there should never be any gaps or lies when writing an expenditure list. It may seem that $60 is a lot to spend on one night out, especially when it’s difficult to even pay the cell phone bill. This doesn’t mean it should be hidden away like a dirty secret. Recognizing waste and overspending is kind of the point here. It helps to identify where the biggest changes need to be made.
- I also use the Mint app, so I can keep track of my spending and make good decisions in real time. It links to my bank account and gives me access to my credit rating. This isn’t the only easy to use expenses tracking app out there, so there is plenty of choice.
- Tracking your spend like this helps with saving money as it identifies where overspends are happening. Monitoring can also help to avoid late payments, and the charges that accompany them.
- Speaking of which, reducing the amount of some of those regular monthly payments is easier than you may think, especially when it comes to energy.
Be energy smart
- Being honest, it was only when I was wondering how I wasn’t going to freeze to death because I couldn’t pay my heating bill that I realized how important being energy efficient really is. This is pretty basic stuff, but the savings add up and make bills more affordable.
- Turn off lights.
A CFL light bulb costs around $0.10 per kilowatt hour to use. The average bulb uses 20 watts of power per hour. If two of these bulbs are left on accidentally for four hours while someone is at work, the cost works out to be around $0.65. This may not sound a lot, but I know people who leave lights on in almost every room of the house while they’re watching TV and the savings soon mount up. When you’re broke, even an extra dollar can be a blessing.
- Weather strip doors and windows
Weather stripping is simple to do and it can reduce energy bills by around 7%. There isn’t much more I can say about that other than, do it as soon as possible.
- Put maintenance first
Boiler maintenance may seem hugely expensive but it’s also hugely important. I know that being broke means spare cash is virtually non-existent, but making maintenance a priority is vital. I’ve seen a friend growing icicles through having to wait for weeks to replace a badly maintained boiler.
Recommended Saving Money and Budgeting Posts:
- Dave Ramsey vs Suze Orman – Battle of the Personal Finance Experts
- Budgeting & Decision Making – Maintaining A Healthy Financial Life
- The Importance of Saving Your Money Starting at a Young Age
- 4 Smart Money Moves for Getting Ahead Financially in Your 20s
- Why Dave Ramsey’s Ideas on Credit Are Crazy
- Manipulating Compound Interest Rates
Shop to save
I’m not going to tell anyone not to shop, because that wouldn’t be helpful. Anyone, no matter how broke, needs to shop sometime. So here’s a few tips that have saved my dollars, and my sanity, over the years.
- Plan purchases to make best use of sales.
If a warm coat has seen better days, it’s obvious a new one needs to be bought before next winter. Act when the spring fashions are released and you’ll get a good deal on the out of season winter stock.
- Don’t buy on impulse
I learnt this lesson the hard way, when an impulse electronics purchase led to a lack of money for rent. Anyone who is broke can’t afford to buy anything on impulse; end of story. No matter how much an item seems necessary, the best choice is to walk away from the store, or the website, and check budgets and expenses, before spending any money.
- Make use of discounts
It’s not just when sales are on that discounts are about. Take a look at Ebates where I find great money back offers all the time. It’s also worth a quick Google search for general discount vouchers and codes.
Be savvy when you socialize
- I’m someone who can cope with their own company for a while, but who really loves to socialize. This is something I found really hard when I first entered the seriously broke stage of my life. I found answers though; mostly out of necessity.
- Invite people round
No-one says that hanging out with friends has to involve going out. Buying a couple of $2 pizzas from the store is way cheaper than going to a restaurant. Even better, friends can bring beer or wine with them, so the alcohol is taken care of.
- Use discounts where possible
If the local cinema has a 2-for-1 deal on, make the most of the opportunity. Likewise, look out for happy hour at the pool hall.
- Don’t just go with the crowd
Never just carry on hanging out with friends at the usual places if it’s not affordable. Those few drinks in a popular bar could make the difference between eating okay next week and not. I vividly remember crying to my friend in the toilets of a bar because I’d just spent a chunk of my rent money on cocktails. She said I was an idiot and that if I’d said, we could have just watched a movie at her place instead. People understand more than you think.
To the future
The main thing I want people to take away from what I’ve said is that being broke doesn’t mean you can’t live. It means you have to change habits and check what you’re spending. Doing this means you can start to manage a little better, and even start to save, even if it’s only a very small amount at first. Every dollar is important when your cash supply is limited.