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5 Money Saving Tips for People in Low Income

5 Money Saving Tips for People in Low Income

If you are losing your job or already in a poor financial condition, you should know that saving money is a must-have skill for you. But we all know saving can be a great challenge for those who those who didn’t form the habit of frugal living. Saving money when you are in low income means you have to make hard decisions on where to spend your money. However, saving money and having good budget does not equal to cut out your expense, it’s more like making adjustments on your expense habits.

1.Work out a monthly budget.

The first thing to do is to work out a monthly budget—without a budget, you won’t be able to know how much or how little you have spent. Try to include all the income and expenses in the month and make a decision about which part can be decreased or even eliminated, and which parts are inevitable, such as mortgage, credit cards, and utility bills.

2.If possible, cut some expenses.

Challenge yourself on some unnecessary expenses and try to cut them off. Carefully examine the places you spend money and make some adjustments on your spending habits according to priority level. It can make huge difference. For example, if you even can’t pay for the utility bills, why you dine out so often? Reconsider that and keep yourself eating at home instead of going out. Pay down debts that comes with interest, for example, the credit cards. When you pay down the balance on such debt, you will be able to decrease the total amount that you have to pay. In addition, cut your expenses on entertainment and use the saved money for necessary bills or put them into your saving account. Make less use of your cars to save on gasoline.

3.Increase the deductibles to save on insurance.

If you don’t remember the last time you file an insurance claim, you are good to go to increase the deductibles on your home, health or auto insurance. By increasing the deductibles, you’ll have to pay less on the monthly premiums, hence you can save some money. The money saved should be put aside for investing but not being spent. But please keep in mind, if you really need to file a claim, you are not suggested to increase the deductibles because your out-of-pocket cost can be much higher and you have to weigh the risks. Shop around and do comparative research to get the best deal on home, health and auto insurance.

4.Refinance your home when possible.

When in the right timing, you can consider to refinance your home to decrease the total loan amount. This can be initiated after you have paid off a significant amount of original mortgage loan. Before you start the refinance, please calculate the closing cost related with the refinancing.

5.Clip and use coupons in grocery stores.

Clip coupons from advertisement or newspapers and bring them when go for grocery shopping. Some grocery stores or supermarkets even allow double coupons so that you can save a lot on items you have to buy anyway.

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