How to save money on a fixed income

One of the most stressful financial situations is not having a safety net. But that is the norm because we live in a world where the basic necessities are expensive. House rent is expensive, commuting to work is becoming expensive by the day because of the road structures.

At the same time, you want to entertain yourself during weekends or when you are not working. Living within your means can become extremely difficult, and most of the time, you find yourself suffering before your next payday.

Lucky for you, I have a solution to save your stressful financial situations and guide you to have a safety net at all times. Below is a five-step by step guide on how to save money even on a fixed income.

Let me dive in!

Step 1: Record your expenses.

The best way to learn your spending habits is by recording your expenditure. You can categorize each expense, for example, house rent/mortgage, groceries, transport/fuel, television subscription.

You should use a notebook, phone or laptop or whatever is easily accessible. Ensure that you record your expenses every day before sleeping. You can do this until the next payday.

Step 2: Budget within your income

Now that you are aware of your expenses. It is time to budget your income. 

You should be able to measure your budget against your income to avoid overspending. 

Besides, you will also find out the areas that you spend a lot of money.

Step 3: Find ways to cut your spending 

This is a critical step towards your saving habit. If you are the type of person who eats in hotels or cafes during lunchtime, it is time to substitute that to carrying packed lunch to your workplace. You will be surprised at how much you will save at the end of the month. 

Find other alternative ways to will reduce your expense.

Step 4: Set saving goals

The best way for you to save is by setting a goal. The goal can be short-term or long-term. For instance, short term goals might include buying a new television set or a new phone; you name it. You can achieve that in three to six months. Long term goals might include buying a piece of land, a house, or setting up a side business that would improve your financial situation.

Step 5: Prioritize you spending habit

At times it might be difficult to decide between entertaining yourself and supporting your family members, which comes first. It is important to find the need to spend before spending. Therefore, you should take the time to prioritize your needs before spending?

 

When you apply these five-step guide, you will be able to save money and have a safety net in the process. Do you have more tips on saving money? Let me know in the comments.