50% of all Americans have no rainy day fund, and 18% of households live above their means according to FINRA’s National Financial Capability Study. With the cost of living rising steadily, you need to make wise decisions now to steer clear of any financial storms. Living on a tight budget has its challenges, but it’s certainly doable. Here’re practical tips to help you live a comfortable life on a small budget.
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Rethink Your Family Time Strategy
We all need to spend some quality time with our loved ones. This doesn’t mean we should always burst our budget when we want to have a lovely time with our family. The average American family spends $2,500 a year on entertainment, according to the US Department of Labor. Going to the movies and eating out are some of the ventures that strain the budget. Be creative and provide alternative activities that can be enjoyed by everyone. You can turn your home into a mini-theatre and have a movie night, head to the local park, visit the museum, play board games, or go bike riding on a nearby trail.
Plan Your Meals from Scratch
Making meals from scratch will help you save more and eat healthier. The average cost of a four-person meal cooked at home is $32 while eating at a restaurant costs $47. By preparing your meals at home, you can save over $5,000 a year. Buying half prepared meals comes with extra costs. To avoid this, look for what’s on sale in the local grocery, compare prices on all shelves, visit the farmers market, buy what is in season and remember to negotiate. Search for recipes which your family will love and are inexpensive to make. As a family, you can also enjoy baking snacks that will last you a whole week.
To avoid overspending when shopping, you need to differentiate between what you need and what you want. For convenience and to get a better handle on your expenses, transactions, and income, open a checking account. Always prioritize the necessary items, use a checklist, buy in bulk and weigh out the benefits of every deal. Shoppers who use coupons save up to $30 a week translating to $1560 a year. Look out for special offers, and don’t hesitate to ask for discounts. For clothes, you can buy used or buy summer clothes in the winter, and winter clothes in the summer. If you have to buy a gadget or electronic, purchase products that are high-quality as they will last longer.
Maintain What You Have
When running on a tight budget, the last thing you want is your appliance breaking down or any other important device malfunctioning. Take care of what you already have by following all maintenance guidelines and performing timely repairs. Keep your house clean to avoid dirt related damages and illnesses. If you have a car, ensure you are following the recommended maintenance schedule. You can use the extra money to invest in products that will cut your home’s energy costs by 23% such as a smart thermostat or energy-efficient lighting.
It doesn’t matter how much you make. In fact, you have more than you realize. What’s important is to have a plan. Create one, stick to it and keep track of every expense. This way, your family will always be happy and satisfied, and you will still have enough funds to save for a rainy day.