This is because so many individuals are living paycheck to paycheck. However, your current financial situation does not have to determine your finances in the future.
The Importance of Saving
You may be thinking, “So, what? Why do I need savings?” Well, saving money is extremely important for securing a stable financial future. Having money saved can come in handy for big purchases, investments and, of course, retirement. The most important savings account to get started, however, is an emergency savings.
Emergency Savings
Having an emergency savings fund is key to being financially sound. As you may know, the smallest change can break you where cashflow is concerned. Let’s say you lose your job or are demoted for some reason, having a backup stash of money to cover your necessities until you stabilize your finances can make a world of difference. So, let’s find out how to save $1000 while living paycheck to paycheck.
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How to Save $1000 When Living Paycheck to Paycheck
Deciding how to save $1000 when you don’t have much cashflow to begin with is difficult. There are some things you can do to save $1000 (or more) while living paycheck to paycheck though.
First, you’ll want to open a savings account. For many people, having a separate savings account (not joined with any other account you have) helps build momentum for their savings. When you’re choosing a new savings account try and select one that is more difficult to withdraw from.
Next, take a good look at all of your expenses and decide where there can be money saved. For example, make sure you are getting the best deals possible on car insurance. If you find you can get a better deal, make the change necessary. You can also do things to trim down your electricity and water costs in your home, like turning off lights and shutting off the water while you shave. These small changes can help you save money each month that can go into your new savings account.
Lastly, try to create a new source of income (at least $40 per month). Many people take online surveys to make extra cash with Survey Junkie or other survey sites. You can also earn small amounts of cash doing tasks on Fiverr. This income will go directly to savings and will help you save $1000 faster than if you were working with your base income.
Maintaining Healthy Saving Habits
The most important part of managing to save $1000 on a tight budget is being able to stick to your new saving habits. Once you’ve established your new saving plan, stick to it (even once you’ve reached your savings goal). You can never have too much money saved!
Have you saved money on a tight budget? How did you manage it?
Photo: Icy Tales
James Hendrickson is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, bonds and precious metals.
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