By Nancy Mann Jackson
WWR Article Summary (tl;dr) From “paying yourself first” to “saving with a purpose”, there are plenty of ways you can get on the road to financial freedom.
Saving money on a tight budget is not only possible, it’s also imperative.
But shifting your thought patterns can yield long-term results. Being a “saver” as opposed to a “spender” may not be natural to most people, but it can be developed through practice.
-Make it automatic: You can’t spend what you don’t see. Bankrate chief financial analyst Greg McBride recommends that people get started by automatically setting money aside each payday.
“Set up a direct deposit from your paycheck into a dedicated savings account and build your budget based on what’s left,” McBride said. “If you’re not current saving 10 percent of your income, that’s the bogey to aim for when you’re setting up that direct deposit.”
Many employers can split your paycheck deposit into a checking account and a savings account. Or if you’re self-employed, schedule automatic transfers from your main checking account to your purpose-based savings accounts on a recurring basis.
–– Create a budget: Setting a budget is the best way to become a disciplined saver. To get started, review your bank statements, pay stubs and other financial documents to get an idea of where your money is coming from and going.
One budgeting option is to calculate your fixed expenses, and then look at your other needs, like food, gas, clothing and entertainment. Determine a number for weekly expenses and challenge yourself to stay within that amount.