6 Simple Ways to Stretch your Budget During Difficult Times |Wangechi Njogu
Let’s be honest — even with remarkable money management skills, unforeseen circumstances can disrupt a stable financial situation. Maybe you have just been laid off, are opening a new business, saving for your education, or caring for a loved one. Luckily, you can take small yet significant steps to cut your expenditure and stretch your budget. While this may not be the most enticing step, it may save you extensive worry over time and allow you to easily bounce back to your ideal financial position.
But first, what is a budget?
A budget is an estimate of revenue and expenditure over a specified period by any entity that uses money, including individuals, businesses, or governments. A budget is essential in setting financial goals, planning contingencies, and measuring outcomes. While some individuals prefer writing down budgets, others use budgeting apps or spreadsheets. Regardless of the method you prefer, we advise that you revise your income and expenses as often as needed.
“A budget isn’t about restricting what you can spend. It gives you permission to spend without guilt or regret.” — Dave Ramsey
Ways to stretch your budget during difficult times
1. Ditch that takeout
If you are wondering how to eat healthy on a budget, well, there is food at home. My mum often told me that we have food at home as soon as I suggested that we should grab a meal at a local restaurant before heading to the house. I have now learned the significance of home-cooked meals as a cost-saving measure. Even better, you get to enjoy healthier meals at a fraction of the cost! If you have a busy schedule, then consider cooking large amounts of food and freezing the leftovers. That way, you avoid ordering in when you are too exhausted. Another vital cost-cutting tip is planning your meal ahead and substituting expensive ingredients for more affordable items.
2. Don’t sleep on discounts and deals
You may not save tens of thousands at a go. However, discounts and shopping deals can help you stretch your budget, especially on essential items. I advise that you start by making a list of every item that you need, including groceries that are about to run out. Then, be on the lookout for significant discounts. For instance, you could enroll in your local store’s loyalty program, get a cash-back credit card, or get coupons from your local stores. You could also consider using browser extensions like Shoptimate that compare prices between popular retail stores.
3. Refinance your mortgage
Homeowners looking for a repayment breathing room could consider mortgage refinancing. With this plan, individuals can get a lower monthly repayment plan at better terms compared to the old loan. The plan also reduces the timeframe of loan repayment while also eliminating mortgage insurance.
While refinancing a mortgage has tons of benefits, it may be a disadvantage for some borrowers. For instance, some home owners may not have the closing costs, which includes fees such as credit report, appraisal, title services, and lender origination. Mortgage refinancing could also negatively affect your credit score, albeit temporarily. How much you can save with a mortgage refinancing plan depends on various factors, such as mortgage rates, your credit score, and the amount already paid off. However, mortgage refinancing is a worthwhile consideration for homeowners who want to stretch tight budgets.
4. Cancel unnecessary subscriptions
You could be paying for subscriptions that you do not use or need, whether internet, entertainment, publications, or fitness programs. And that could be a ton of savings. Start by unchecking the auto-renew option for any subscription that you can classify as a want.
For instance, entertainment subscriptions are a luxury and not a need. We advise that you go through your bank account or credit card statement. Then, pinpoint any expenses that you could eliminate. If you cannot avoid free trials that require payment information, set up a reminder to cancel before the subscription begins. Also, consider cheaper alternatives to your must-have subscriptions.
5. Lower your housing expenses
As one of the biggest living expenses for most individuals, lowering housing costs is a great way to stretch your budget if you do not own a home. While it may be a luxury you may be accustomed to, you are better off with fewer expenses as opposed to incurring debts. If you have an extra room, then consider renting it out and saving the extra income. Other options include moving to a less expensive neighborhood or apartment, negotiating your rent, or getting a roommate. I have also heard of folks giving up their parking spaces or offering services like plumbing or appliance repairs in exchange for rent discounts.
6. Find affordable ways to have fun
Cutting your budget should not equal zero fun. Sometimes, the simplest outings and trips are often the most enjoyable and memorable, despite taking up a fraction of the cost. Thus, rather than lamenting about your budget constraints, consider exploring affordable or free ways to have fun. For instance, you could explore the outdoors by camping, hiking a nearby trail, or picnicking at a local park. You can also be on the lookout for no-cost museum or zoo days or take free historical tours in your city. And if you want to travel, search for travel deals and book your tickets and flights early to avoid price hikes.
Takeaway
You may find yourself in a position necessitating minimal spending, regardless of your earning, savings, or investments. Often a startling experience, folks are forced to put their financial goals on hold. While stretching your budget is not a fun process, you can create meaningful change and avert financial pitfalls. Other than cutting your expenses, consider getting new streams of income.
Remember — your daily spending habits, no matter how trivial they seem, will ultimately affect your personal finances.
