This is a contributed post.
We all have financial goals that we want to reach. Whether you want enough to make a down payment on a home, to start a business, or simply to give yourself an emergency fund, you need to take the time and effort to save. However, sometimes it can seem like your ability to save is being hamstrung by the everyday expenses you have to deal with. One of the most seemingly restrictive of all is rent. Renting doesn’t have to mean you put saving on hold, however. Here, we’re going to look at how you give your finances the wiggle room they need to help you inch closer to your goals.
Pay yourself first, your landlord second
Don’t panic, this tip isn’t about skipping your rent. Rather, it’s about making a budget and sticking to it. Budgeting your money is how you turn the goal of saving into a real habit. You start by putting together your income with all of your expenses. Include not just the biggies like rent and bills but look over your bank balance to see how much you spend on groceries and luxuries (like eating out, going to the cinema, etc) every month. Calculate how much you absolutely need to set aside for rent, bills, and groceries. Then, try to reduce how much you spend on luxuries to make room for savings contributions. Every time you get paid, put those savings funds into a savings account or a piggy bank straight away. Then set aside the money you definitely need for essentials (prioritising rent first, of course). The rest of the money is yours to spend as you please. Many financial experts recommend saving 20% of your income towards your financial goals a month, but if you can’t afford that, don’t beat yourself up about it.
Start trimming those expenses
You might be able to find a little wiggle room to put even more savings aside by more closely considering your spending your habits. Living below your means can instantly make any financial situation more comfortable. Some of the biggest expenses you can look into cutting includes your transport, your TV, cable and internet, and your food.
Don’t rent beyond your means
It might be worth taking a closer look at where you’re living right now. Just like you should live below your means, you may also want to consider renting below your means. If you’re willing to choose a different location that isn’t as high in demand or offers just a little less space, you might find yourself paying much less in rent. Take another look at the market to find a house for rent. You might be able to find a move that can instantly make much more room for saving in your budget.
Get debt out of the way first
Before you start building your savings funds, you want to make sure you get rid of the money pits that can undermine it. If you have more debt than savings, you are still in the negative. Rather than trying to save more than your debt is, you should pay off your debt before you start saving. Otherwise, the interest on your debt will grow much faster than any interest on your savings, meaning you are always in some degree of financial risk. Consider debt-reduction strategies like a debt-busting budget or credit card consolidation so that you can start saving much more freely.
Get yourself a side-hustle
Whether you want to get yourself out of debt a little more quickly or you simply want to see those savings growing faster, a side-hustle could be exactly what you need. A side-hustle is essentially any part-time money-making strategy that you can fit in on top of a full-time job. It’s getting a lot easier to find a side-hustle that fits your lifestyle too. With online part-time careers like freelance copywriting, virtual assistant roles, and affiliate marketing, you won’t be arriving home from one job only to leave immediately for the next one nor do you have to spend all day making cold calls on the phone.
Consider a roomie
Having your own completely personal space, like your own apartment or your own home really is a luxury. But it might be one you could do better off without. Finding a roommate to live with doesn’t just split the rent in two. It also makes a major dent in the bills you will be paying individually. After all, you likely won’t need to change your internet package, but you now have two people paying for it. If you’re already renting and not planning on moving home, you should talk to your landlord about the potential of sub-letting a spare room. You can earn a little income and save some expenses at the same time. Don’t do it without permission from your landlord, however. You can make the offer more enticing by offering them a cut of the money made by subletting, too.
If you’re saving for a down payment, don’t forget your credit
This tip is specifically for those saving for the purpose of eventually buying their own place. Your savings are important, helping you put together more of the down payment on a loan. But don’t forget to work on your credit score, as well. Better credit means you can get access to better loan terms without having to save as much, as well as larger loans. Start by looking at your credit report and contesting any negative records that aren’t accurate but are hurting your score. Then, make sure you are current with all creditors and that any debts are eliminated. If you have no debts, consider taking out a credit and planning the responsible use of it which can help build a credit history that makes finding a home loan all the easier.
Which of the tips are available and helpful to you can depend on a range of things, such as your income and how many other responsibilities, like family and education, you might have. However, there should be at least one strategy available to everyone that can open up the room they need to save, even if it’s simply living under your means.