You need to save money quickly but you’re more or less spending everything that you take in. Now is the time to take a critical look at your budget and start trimming out everything that’s not absolutely necessary.

You already know it, but saving money is all about cash flow. What you take in has to be more than what you spend. Even if you only come out ahead by a few dollars, that’s still positive cash flow. This post aims to get you there, or at least get you closer to achieving that. It’s going to be rough, but here’s a list that will help you get started.

1. Stop eating out for lunch

You don’t realize how much money you’re spending by grabbing lunch at the local food joint everyday at work until you stop to crunch the numbers longterm. Cutting restaurants from your lunchtime meal alone can save you $2,4000 a year.

2. Cut out extra entertainment services

If you’re like most people, you’re probably paying for a Netflix subscription, or Hulu, or HBO Go, or all of those things and more. You might think that they’re well worth it and the measly $10 you’re spending on each one is not too bad. It’s a trap! Don’t trick yourself into thinking that relatively “small” amounts of money spent here and there won’t hurt you in the long run.

A $11/month subscription like Netflix will cost you $132/year now that they’ve increased the prices. Double or triple this number as needed if you’re using multiple similar services. If you actually need money, that $132 could go towards those needs. As long as you have internet, there’s plenty of free entertainment online that you can watch for free until you’re financially comfortable.

3. Cut cable

Food, utilities, paying down your debts, and having clothes to wear should come before cable. Cable packages can be $100+/month, which comes out to $1,200 a year.

4. Got a gym membership? Work out at home

Gym memberships tend to be $25-$30/month, costing you upwards of $360 a year. Try to exercise at home via bodyweight exercises, or buy a cheap set of weights. If running is a part of your exercise routine (we hope it is) try running outside instead of on a treadmill at the gym.

5. Live in a city? Sell your car

If your city has a decent public transportation system, consider selling your car so you can have more cash on hand. Getting where you need to go may take a little more time and planning, but it may be worth it for you over spending hundreds of dollars a month on gas, maintenance, insurance, and payments on your car. Take your monthly car payment and multiply by 12 to get the annualized cost of owning your car. Wouldn’t it be nice to have that money back in your pocket?

If you absolutely need a car, try to see if you can find a cheaper one, preferably with cash so that you don’t have monthly payments subtracting from your income.

6. Just drink water

Soda, tea, coffee, juices, and alcohol add up on a monthly basis. If you need coffee to survive, see if you can get it from work for free or get up earlier to make it at home instead of buying it at a coffee shop.

Small costs add up

Item Yearly Cost
Eating out for lunch $2,400
Netflix $132
Cable $1,200
Gym Membership $360
Total $4,092

The first few examples above alone add up to $4,080. Cutting them out would put over $4,000 in your pocket! The trick is to look at monthly costs and stretch them out to yearly costs to help you really visualize just how much you’re spending. Once you’re able to see that, apply that mentality to your every day purchases, and watch the every day savings add up. Before you buy something, ask yourself- if I did this every day how much would I be spending a year? How about if it was only every week? Or every month?

Compromise is key

Since you’re serious about saving money, you have to attack this situation with the right mindset. Know beforehand that you’ll have to give up some things that you enjoy doing that are just too expensive at this time. You can get by in life without them, and if you want to start saving money, you’ll have to. Your budget is tight so don’t negotiate with yourself to try and keep things that you don’t need when saving money at this time is more crucial.

Going into debt for luxury is not worth it- especially if that debt is credit card debt which will kill you with high interest rates. The money that you would spend on hobbies and comforts could be better spent on paying down your debts that accrue interest, or towards building an emergency fund to give you some sense of financial security and comfort.

Finally, work your hardest to make your life easier in the future by aggressively searching and applying for better paying jobs. We have tips on how to increase your income here.

Ordinary Riches