By Omosuvie Joseph Odjuvwu
Understanding how to save money with a tight budget plays a crucial role in human experience financially.
Are you thinking of saving some money but you’re worried you’d not be able to save anything from the little you earn? Do you want to wait till you earn hundreds of thousands before you give it a try? I’ll make you change your mind.
It can really be exhausting to try to save anything from any salary below N30,000 but it is very possible. As a matter of fact, people who earn hundreds of thousands of naira find it difficult to save sometimes. I am going to show you some tricks they don’t know.
Anybody can save, you don’t need to worry about making millions first. In fact, saving the little you have now will help you with saving more money when you have begun to earn even more.
How do you save with a tight budget?
Below are some things that you can do to help you save.
1. Make The Decision To Save.
The first recommended step to doing anything in life is making the decision that you want to do it.
Don’t jump into saving without making sure that you have thoroughly thought about what it would take or cost you.
Ask yourself why you want to save, are you saving so that you can pay an upcoming bill? Are you saving to start a business? Are you saving just because you want to have some money stored up for the future? Whatever your reason is, just make sure it is clearly stated and decide that you want to embark on the journey.
2. The One-Tenth Syndrome.
I read a book that I think everyone who wants to grow financially should also read. It is titled The richest man in Babylon and has a section of it focused on saving money.
I bet you thought the one-tenth rule only applies to tithe—and taxpayers in some countries—, well it doesn’t.
With this system, you have to see yourself as your employee cause actually you are working for yourself so why not pay yourself a part of what you earn?
The idea is to put at least 1/10 (that is 10%) of your earning into a safe place every time you earn no matter how little it is.
It may seem like a little amount but it wouldn’t be so little at the end of the year, believe me.
Have it in mind that you don’t really have to stick to 1/10 if you believe you can actually save a lot more from a job you did. The point is to not go below 10% no matter how much expenses you incur monthly or daily.
3. Cut Down On Expenses.
If you really want to know how to save money with a tight budget, you must reduce your expenses. I know this would appear impossible to you but I’ll show you how expenses can be reduced.
Expenses come majorly in two forms, “wants and needs.” I know this is not an economics class but I’ll make it clear to you in a second.
Needs are expenses that you must incur no matter how tight your budget is. Expenses like feeding, rent, transportation to work, data (if you need it for work), and the likes are needs
Wants, on the other hand, are expenses that you can totally do without if you choose to. Expenses like money spent in clubs, money spent trying to wear trending clothes, money spent on data (if it is not needed for your work), and the likes.
Some needs can turn out to become wants, yes, we all know you have to feed but you don’t necessarily have to always eat at expensive restaurants if you want to save.
We know you need to pay your rent, but do you really need that 2bedroom flat now? These are the ways your needs could become wants and eat your hard-earned money.
4. Invest Your Savings.
You’re probably wondering how investing will help you save more.
Here’s the trick, when you invest the money you have saved, you get interests either daily, weekly, or monthly depending on the terms of the investment.
Now, that interest is like an additional payment you’re getting from your investment. It would give you the leverage to save more money from your salary or earnings.
5. Continue With The Process.
Don’t get tempted to exhaust all the money you have saved or all the interests you have gotten. Always remember that the journey to financial freedom may be slow but with persistence, commitment, and discipline, you would eventually get there.
Continue to save, continue to invest, and the more that you continue to do these things, the more financially stable you would be, and the more savings you would have.
In conclusion, saving from a tight budget would be difficult at the beginning, in fact, you would be tempted to give up at some points.
If you continue after the third month, I can assure you that when you begin to calculate how much you have now and how much you would have by the end of the year, you’d want to continue.
Also, remember that it is a long journey, prepare your mind for six (6) months and above. Set long term goals for your savings, that would help you be more disciplined and committed.
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