How to make money by saving money

With the holidays coming, money getting tight, and the pressures of a tough economy hitting many people; it is important to find ways to reduce spending, and learn how to make money last using money earned.

Budget

The first step to successively managing money, as well as saving money, is budgeting. It is extremely important to sit down with a pen, paper, bills, and do a budget. Write down every necessary expense: house payment (or rent), car payment, credit card payments, loans, groceries, gas, etc. If money is put into a savings account, add that in to the necessary expense.

Subtract all the expenses from the monthly income. Sometimes, it is an eye opener to realize how much money can be saved after all the bills and necessary expenses are paid. Make a list of all the expenses. Look at how much is left over, and determine ways to save money using what money is left.

Create a Savings Account

Savings is extremely important. It does not matter if $25 or $200 go into savings every paycheck. The purpose is to save what can be saved, and to keep that money in savings as long as possible.

A savings account can also help a person be more responsible with money. In most cases, the money will sit in savings and accumulate over time. Once a person realizes how much money can actually be saved over a period of a few months or a year, they will work harder to reduce their spending.

Create a savings account, determine how much can be placed in savings, and leave it alone. The only money that needs to be used (unless there is an absolute emergency) should come out of checking.

Get Rid of the Credit Cards

In many cases, credit card debt is unnecessary debt. Credit cards have become a way for everyone to live above their means.

If having a credit card is necessary, be sure the card is used only when necessary. The only reason credit cards should be used is in situations such as: car trouble, an emergency trip home to the family, or in other “needed” cases.

Never use credit cards to pay bills. If a credit card is being used to pay the cable, phone, or internet bill. Get rid of one of those items, and look at other areas to save money.

Paying bills or buying everyday items with credit cards is not good. It usually means one is living beyond what is affordable, and it is time to cut something from the budget.

Overall, if a credit card is necessary, have only one. Use the card in special cases or emergency only. Do not acquire debt just for material gain.

Use Cash

Everyone says it, and this article will say it: use cash. Budget the groceries, leave the debit card at home, and take cash to the grocery store. Buy only what is affordable with the cash.

Take a specific amount of cash when shopping at the mall, and plan what items need to be bought, not what items “want” to be bought.

Take a specific amount of cash out weekly. Set a $40 spending limit weekly, for each adult (or teenager) in the home. Make the $40 last. It is possible, and the amount of money saved will be shocking.

Place Money In the Piggy Bank

No one likes carrying change around. So why not place loose change into a piggy bank or a “change box.” Loose change adds up over time. For example, after five months of placing loose change in a “change glass” and three piggy banks, one family had over $80 in change. Granted, loose change may not get a family out of debt, but it is a way to save.

Do Not Eat Out

Eat at home. Budget groceries, make meal plans (even if the plans include frozen meals). Stop buying expensive coffees or other treats, and make plans to eat out (at an affordable restaurant) only once a month or once every two months. Cutting trips to restaurants is a huge money saver, not to mention healthier.

Sell Unused Items

Go through DVDs, CDs, clothes, toys, books, and other items in the home, and determine if it is necessary to keep them. If there are items that are not being used, the best thing to do is get rid of them. What better way to make a few bucks than by having a yard sale or selling items online?

Yard sales are great, and sometimes a yard sale can bring in a few hundred dollars. If everything does not get sold in one yard sale, plan on having another one in a few weeks or a month.

Another way to make extra cash, is to sell items online at sites such as eBay. Be sure to be honest about the items. Give good descriptions and mention any problems that need to be addressed. Take pictures, create an account, and start selling.

It is often surprising how much people do not use, and even though once an item is used the value goes down, money can still be made. This is also a great way to clean house. Making this an annual or twice a year thing, would be extremely beneficial to help declutter the home.

Stop Bad Habits

Smoking, chewing tobacco, drinking alcohol every weekend, impulse buying, coffee shopping, clothes shopping, and other habits that drain money from the account on a daily or weekly basis should be cut back or stopped.

Make an effort to only shop for clothes when needed. Only shop for crafts once a month or even once a season. Stop spending money on alcohol every weekend, cut back to once a month or just stop. Cut back on smoking and chewing tobacco, or stop doing it. Do not go buying fast food or coffee every day.

Little changes go a long way. If habits are hurting the family financially, then stop doing them.

Cut Back on Luxuries

This goes along with stopping bad habits as well, but it also means if the cell phone plan is too expensive, get rid of it or go to a lower plan. If the cable is too much, get rid of it. Find a package deal for phone, internet, and cable that will be more budget-friendly.

If buying new furniture, to replace old furniture or because it seems nicer than used furniture, is going to cause debt, do not buy it. If going to get hair done is causing the family to go over budget, make less trips to the salon; or buy products to use at home, and only get hair cuts at the salon.

These are a few examples, but there are many luxuries that are often enjoyed but can be done without.

Be Money Wise

Overall, be smart about living within a budget. Do not get caught up in having new things, or updating things just because it is what everyone else is doing. Budget, find ways to save, and figure out ways to make money by selling unused or unnecessary items around the house.

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Author: knowledge herald

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