If you find yourself living paycheck and paycheck, and a raise isn’t in the offing any time soon, you may want to consider some ways to make that paycheck go further.
The key to stretching your money is to first get a handle on where–and how much–you are currently spending.
You may then be able to find some relatively easy ways to pair back some of your recurring (as well as unnecessary) expenses.
Making your dollars go further may also involve finding ways to help grow the money you do have in the bank (and there may soon be more of that).
Simple Ways to Stretch Your Money Further
Read on for money-stretching strategies that may help make it easier to make ends meet, plus have a little bit of extra.
1. Tracking Your Money
If you want to do more with your money, it helps to first figure out what you are currently doing with your money.
You may have a good sense of your fixed monthly expenses (such as rent/mortgage, car payments, groceries, student loans), but smaller everyday expenses have a tendency to slip through the cracks–yet, nevertheless, add up.
A good exercise is to track how much you’re actually spending each day (that includes every cash/debit/credit purchase you make, plus every bill you pay) for a month or so.
You can do this by carrying around a notebook, or saving all of your receipts and putting them into a spreadsheet on your computer. There are also a number of apps that can make the process of tracking your daily spending easy.
This can be an eye-opening exercise. Spending is so frictionless these days, many of us really don’t have a handle on how much money we are actually spending.
Seeing it all in black and white can help you think twice before buying something nonessential, and help you start becoming much more intentional with every dollar.
2. Setting up a Budget
Once you’ve done the work of tracking your monthly expenses, you may next want to compare this to how much money (after taxes) is coming in each month.
If you are consistently spending more than you are bringing in, you may want to set up a budget to help you get these two numbers better aligned.
The process requires grouping all of your spending into categories, seeing where you may be able to cut back, and then setting up some monthly spending parameters.
There are a number of tools and apps that can help you create–and stick with–a household budget, but even just keeping a ledger or a basic spreadsheet can help you gain more control over where money is falling through the cracks.
While the idea of living on a budget may sound like a drag, the truth is that planning how you want to spend your money can often lead to having more money to spend on the things you want.
A budget can also help guide your money toward short- and long-term financial goals like an emergency fund, a down payment for a house, and retirement savings.
3. Paying Bills on Time
Knowing when your bills are due and paying them on schedule could save you money in a few different ways.
First, it can help you to avoid paying interest and late-payment fees.
Second, It might also boost your credit score. A good credit score is important because it can help you qualify for the best interest rates on credit cards and loans.
And the less money you have to pay in interest, the faster you’ll be able to pay off debts–and the more money you’ll have to spend on other things.
4. Negotiating a Better Deal
Some of those recurring bills (like cable, internet, your cellphone, car insurance) may not be set in stone.
It might take some research—and a little nerve—but you may be able to negotiate for a lower rate from some of your service providers, especially if you’re dealing with a company that’s in a competitive market.
Before you call or email a business or provider, it can help to know exactly how much you’re paying for a service, what you’re getting for your money, and how much the competition is charging for the same or similar service.
It’s also a good idea to make sure you are communicating with someone who actually has the power to lower your rate and, if not, ask to speak with someone who does.
It may also be helpful to let a provider know that if they can’t do better, you may decide to switch to another company (and you might).
5. Ditching Expensive Debt
Another way to help make your money go further is to spend less on interest payments on debt.
If you can pay down that debt, you could use the money you’re now throwing away on interest to pay other bills, build an emergency fund, invest for the future, or save for a vacation or some other goal.
Reducing debt is easier said than done, of course—but choosing the right debt reduction strategy may help.
Since credit card debt typically costs the most in interest, you might consider, chipping away at these debts first or, if possible, wiping them out completely. You could then move on to the debt with the next-highest interest rate, and so on.
Another approach to reducing debt is to pay the minimum toward all your accounts, and then pay any extra you can toward the debt with the smallest balance. When that debt is paid off, you can move on to the next smallest balance, and so on.
If you can qualify for a lower interest rate, another option might be to take out a personal loan that consolidates all those high-interest debts into one more manageable payment.
Getting rid of that damaging debt can have long-range consequences as well.
If you can lower your credit utilization ratio, which shows the amount of available credit you have, you could improve your credit scores. And that, in turn, could make it easier to qualify for lower-interest loans and credit cards in the future.
6. Balking at Bank Fees
Unless you’re vigilant about checking your statements, you might not even notice the fees your bank may be charging every month for your checking and savings accounts.
They might include service fees, maintenance fees, ATM fees (if you don’t use their machines), minimum balance fees, overdraft or insufficient funds fees, and/or transaction fees. And all those little nips can take a toll over time.
If you see that your bank is hitting you with one or more monthly fees, you may want to consider shopping around for a less expensive bank, or switching to an online-only financial institution. Because online financial institutions typically don’t have the same overhead costs banks with physical branches do, they generally offer low or no fees
7. Pressing Pause on Impulse Purchases
If impulse purchases are your downfall, consider trying a temporary spending freeze, during which you avoid buying anything that isn’t a must.
Or maybe pick a single category (shoes, wine, cigars, jewelry) or a specific store to stay away from for a certain period of time.
To help keep you motivated, you might track the money you didn’t spend during your freeze and then put it to use paying down debt, starting an emergency fund, or saving for a downpayment on a home or other short-term financial goal.
Once you start seeing the benefits of saying No to impulse purchases, you may find yourself spending less even after the freeze is over.
8. Making Lists
Another way you may be able to make your money stretch is to make a list any time you’re going to shop, keep it in your pocket or on your phone, and then stick with it in the store.
And lists aren’t just for grocery shopping. You could make one before you hit the pharmacy, the mall, the local coffee shop, the sporting goods store–or just about anywhere you might wander off course.
Keeping a list close at hand can help avoid having to go back to the store because you forgot something (keeping store visits to a minimum), and you might be less tempted by items that aren’t on your list.
9. Click Unsubscribe
If your favorite retailers tend to bombard you with emails alerting you to their latest and greatest sale, you may want to think about getting off their e-mailing lists.
Sales and great deals are happening all the time, and generally the best time to purchase something is when you really need it.
Even if you don’t find that needed item at its lowest ever sale price, you will likely end up spending less than buying more things simply because they are on sale.
If the bait to buy doesn’t constantly land in your inbox, you’ll be less likely to take it (and won’t even know what you are missing out on).
This move could quickly translate into more cash or one less bill at the end of the month.
10. Maximizing the Money You Save
Another way to stretch your dollars is to consider how you might get a higher return on any money that is sitting in the bank earning little to no interest.
Higher-yield savings options you might consider include an online savings account, cash management account, certificate of deposit (CD), or a money market account.
For a longer-term payoff (and potentially higher rate of return), you may also want to consider putting more money into your 401k or other retirement fund, as well as starting or adding to a nonretirement brokerage account.
11. Keeping the Change
Loose change may seem fairly worthless, but over time it actually can add up, and might help you help you pay a bill or buy a nice dinner.
Instead of letting coins live indefinitely in the bottom of your bag or the cup holder in your car, consider setting up one money jar in your home to collect it all.
Then, every month or so, you might sort and roll the coins to take to the bank. (You can also use a coin-counting machine, available in some stores, but keep in mind that some deduct a fee, or percentage of your change.)
If you rarely use cash anymore, you may still be able to make good use of virtual change.
Some mobile apps and credit/debit card accounts offer users the opportunity to automatically round up purchases to the nearest dollar and have that money transferred into a savings account.
So, for example, if you bought a doughnut for $1.25, the purchase would be rounded up to $2, and the extra 75 cents would be sent to your account to go toward a savings goal.
12. Using Windfalls Wisely
It can be incredibly tempting to use a tax refund or a work bonus to buy something fabulous. And there’s nothing wrong with an occasional splurge.
But you may also want to consider using that money to pay down a high-interest credit card, make an extra payment on a loan, or start (or add to) a high-yield savings vehicle or other investment.
Any of these moves can help you stretch those dollars, either by cutting the amount of interest you’ll owe over time or adding to the interest you’ll earn.
With a few smart savings strategies, you might be surprised at how much further you can stretch your money each month.
Getting started is simply a matter of tracking your spending. Once you know exactly where your money is currently going, it can be relatively simple (and often pain-free) to find ways to save.
Some money stretching moves might include negotiating with (or switching) service providers, putting a bit more money towards debt reduction, knocking down (or eliminating) monthly bank fees, reducing the temptation to make impulse purchases, and finding ways to make your savings grow faster.
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SoFi Money offers anytime access to your money at 55,000+ fee-free ATMs worldwide, along with an above-average yield to help you grow your savings.
Plus, it’s easy to track your spending (and your savings progress) with the SoFi Money app.
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