So you are making a decent income currently but you need some extra money to go on a vacation or you need to start saving $20,000 to add to your son’s college fund. How do you proceed with this plan in the most effective manner possible?
Good question. I have been put into this position within the last 3 years. Then I found out that my family’s expenses were far above the income from stocks and oil properties.
That’s when it hit me: either slash my family’s monthly budget or go broke.
Talk about a wake-up call! From that day forward, I wrote down every cable bill, grocery bill, car payment, and all other utility bills to slash all of them down to their core.
While I am still in the process of eliminating unneeded expenses, I figured out that there were 4 specific ways to quickly get my monthly budget down within a six-month time frame.
Let’s begin to explore each one.
1. Getting Rid of Excessive Rent Payments
Now this one can only be done if you are ready to make some extreme cases in your everyday life.
For example, as my mother was entering her 80’s and her health was waning, I decided it was time to move her and my brother into a three-bedroom apartment.
This allowed me to eradicate more than $2,000 a month from paying for her single apartment. And, me and my brother’s $1,110 apartment. What a huge amount of money to save!
Most people reading this post may not see themselves able to make such a drastic move.
Take a good hard look at your current rental or mortgage payment situation. You need to figure out how to move to another house to lower your expenses.
If there is a viable way for you to do so, go ahead and do it immediately.
Then, with the extra money you have saved, you can open a savings account with a 2.45% interest rate and begin your journey to passive income.
People have extra unused room in their house that they never use at all.
If this is your circumstance, go ahead and fix that room up as either a part-time or full-time rental and then list it on Airbnb.
They will help make sure that your room will be rented at the highest rate possible while taking just a 3% cut of the rent.
This one tip could help you generate more than $600/per month or more. Then you can use that money to pay off your mortgage rate much quicker.
Or you could use the money to save on your monthly apartment rental fees. A huge win-win any way you slice it.
2. Lower Your Grocery Bills and Lose Weight!
During this time, I also realized I was about 15 pounds overweight from eating out with my friends every weekend.
As I live in Las Vegas, the buffets in this city are all over the place and are hard to avoid.
Well, I decided not only to quit eating out to save money, but I also quit eating at buffets altogether and started eating at home.
This not only saved me more than $50 a week, but I also dropped the 15 pounds and the blemishes I had on my face disappeared!
It seems when you eat greasy food, red marks will appear on your face seemingly out of nowhere. But they can be caused by eating lousy food, which I found out the hard way.
So then I decided to only buy what my family would eat from the grocery store daily. If they did not finish their food, I never bought it again.
I started buying good quality frozen food that could be cooked in an entree style. This brought the weekly food bill down by more than $300 per month.
Another way to cut your food bill down to size is by seeking out generic brands of popular items like rice, bread, and butter.
When you go to Walmart, look for the Great Value label like I do.
This step will save you hundreds of dollars per year off your food expenses. They hardly differs from the big name brands, taste wise.
If you have a family to feed, follow what I dam doing ASAP.
3. Get Rid Of Any High-interest Credit Card
Depending on how reliant you are on your credit card when it comes to using your card for making daily purchases, this step can be hard.
But it is a necessary one. I took one look at my credit card that had over $2,000 on it with a 12% interest rate and cut it in half.
I then went to my bank and got a secured card with a 5% interest rate and transferred the entire amount over to it from my 12% credit card.
I paid it completely off within a year and then got a Cash Back card with 0% interest on it as long as I pay it off every month.
Best step I have taken in the past 5 years!
Now I get 1% cashback on all of my credit card bills and use that money to pay off the credit card debt every month.
This is a win-win opportunity that will also build up my credit. And yours as well if you take advantage of it.
SB’s note: I actually recommend my readers who didn’t have any credit problems in the past, to use credit cards for almost everything. The credit card rewards are free money for you to have. They are the rewards of your every day spend.
4. Open a HIgh-yield Savings Account
When the stock market started to tank in 2017, I started to look at other options than keeping my money in a diversified stock portfolio.
That’s when I found online banks like CIT were offering 2.45% savings accounts as long as you kept at least $5,000 in balance.
So I opened CIT savings account with the full amount I had in the stock market. And, now I am saving a lot of money from being lost in stocks when Wall Street has a bad losing streak.
Every month I make around $75 to $85, which I then can use to pay off my credit card bill. This makes sure that I never pay any amount of interest on my credit card.
If you currently have a savings account accumulating just 1%, I highly recommend putting your money into an online-only account right away.
But you also need to use the amount of interest you make in that account to pay down your credit card balance or to pay off on a car loan.
That way, you will start making real progress on paying off any debts you may have. And that is the #1 way to save real money continuously.
Since I have accomplished all of these savings tips, my overall budget has been reduced by more than 70%.
Anyone can produce these types of results themselves by following every step in this post. Keep looking for other budgeting tips as they begin to seek out true wealth.
About the author: Rob Mead owns the personal finance YouTube channel. He talks about money matters with very practical approaches.