HOW TO SAVE MONEY IF YOU EARN LITTLE: 5 PROVEN IDEAS (PART3)

HOW TO SAVE MONEY IF YOU HAVE LITTLE INCOME?

There are many ways to save money, but if you have never done it before or if you are currently in a tight financial situation, I advise you that instead of setting a long-term saving and investment goal (one that your mind can reach to feel like something difficult to achieve and therefore you are going to put it aside), start with easy savings challenges to meet.

WHICH IS BETTER: SAVE OR INVEST?

Although they are two different things and with different purposes, both are equally important for a good financial planning strategy, with a view to creating wealth.

As a general rule, saving should come before investing, since savings are there to cover those expenses that, during any eventuality, we will need to keep up to date to avoid incurring debt and maintain a decent lifestyle.

Instead, when we talk about investing money, we should think of long-term "savings", dedicated to increasing our quality of life and meeting future goals.

Now, choosing between saving and investing will depend on the current situation of each family or individual and they're short- and long-term goals; as well as your risk tolerance.

HOW TO SAVE MONEY EFFECTIVELY: 5 OF THE BEST WAYS TO SAVE MONEY IN NO TIME

1. PLAN YOUR EXPENSES IN ADVANCE

Doing this will give you time to save the money you need in the months leading up to buying, say, a new cell phone, going on vacation, or buying your best friend's wedding gift.

2. SAVE FOR EACH LIFE PROJECT

This type of long-term savings applies to every project you have in life

For example: Start saving for your baby's college as soon as he gets out of the hospital. Just as you read it! It's never too early to create a savings account for your child, grandchild, or nephew and start saving money for their education, and this is something I consider with every birth in my family.

Consider buying the much more modest birthday or Christmas gifts and instead add the surplus from your gift budget to a savings account earmarked for your children's or nephews' or nephews' education.

3. CANCEL THOSE SERVICES THAT YOU NO LONGER USE

Regarding services like cable, with so many alternatives out there today (such as Netflix, YouTube, etc.), do you really think you need to pay for triple-play packages?

Call your cable company and find out if it is economically better to have only the internet package, and it is that within the advice that I always give my family and friends to save money, eliminating unnecessary expenses is the main one.

4. MOVE IN

Moving to a place close to your place of work is not always possible, but if you do not yet have your own home, you live on a lease and you work in a company where there is a good chance that you will stay for at least another year, it would be good for you to evaluate move closer to the company where you work, as it could save you hundreds of dollars in transportation and time.

Let's see, have you calculated how much it costs you to live far from your work? In addition to the time, you lose moving, add the costs of gasoline or transportation, etc.

Living close to your work has the benefit of being able to spend less time in traffic and use the car less, which translates into double savings. Also, if you can walk or bike, you maximize the advantages even more and add benefits to your health.

5. USE PUBLIC TRANSPORTATION

We agree that using your car can be more “comfortable”, but it is also a huge expense and therefore a luxury.

Evaluate how much you really spend when you use your car, taking into account that it is not only gasoline but the normal wear and tear of a car. A quick calculation can be $0.34 cents per kilometer traveled.

It means that (for example) you travel 20 km daily. To get to and from your job, the cost of transportation will be $6.80 per day, not even including the depreciation of your vehicle.

Now tell me: how much would it cost you to take the bus/metro and how much money could you save if you do? Yeah, I know…it's amazing, right?