Life can change abruptly, especially with regards to finances, and there is no other option than to adjust.
There are various reasons why one would have to survive on 1000 dollars a month.
- 1 How to better use money when income is low
- 1.1 Work on a budget
- 1.2 Minimize your bills and subscriptions
- 1.3 Reduce unnecessary shopping expenses
- 1.4 Reduce entertainment cost
- 1.5 Carry home-packed lunch
- 1.6 Look for a job close to home
- 1.7 Save some money
- 1.8 Transfer your money into a high-yield savings account
- 1.9 Reuse items
Maybe you lost your job, or you got a job that does not pay as much, or you are trying to save up money for a certain investment.
Such a great reduction in spending may not be easy for those used to the high life. It is, however, better to do than falling into a deep financial crisis.
How to better use money when income is low
Work on a budget
Budgeting is key in keeping track of your finances to ensure accountability. First, make a list of your recurrent expenditure. Normally, it would involve essentials like groceries, house shopping and bills.
You can make purchases in bulk which is more cost-efficient than single purchases. Moreover, it’ll reduce the transportation costs to and from the stores. It is advisable to look for a store with discount offers or offer prices for their goods to save as much money as possible.
Ordering online can also be another alternative with the shops you trust. Some stores do door deliveries, which will save you the cost of transportation and minimize the possibility of impulse buying.
Minimize your bills and subscriptions
Bills take up a huge part of your monthly earnings. Most of these bills you can’t avoid, but you can minimize the costs. People need to understand that paying more for a service does not necessarily mean it is better.
For instance, if it’s your cell phone or internet bill, you may find one company offering the service at $19 per month and another at $80 a month.
The service offered may be similar, just a difference in pricing due to the brand. At times, the $80 service may come with a package of things you may not need. There’s no need to wasting money to purchase the package; instead, opt for the cheaper one with what you need.
For the subscriptions, cancel any unnecessary subscription that you don’t require. For example, if you have two movie subscription accounts, you can cancel one and leave the other because they serve the same purpose.
Alternatively, you can forego the subscription and opt for YouTube services for free movies if you have internet services. Also, always go for a cheaper subscription.
There are many cheap subscriptions available on various services due to market competition. You have to find all ways to minimize unnecessary expenses.
When it comes to your television, the average cable or satellite costs $100 every month. You can switch to a regular antenna which costs nothing, and save up on costs.
All you need is to connect it to the television, locate where it gets the signal best, and you are good to go.
Reduce unnecessary shopping expenses
We all love to have our wardrobes match the current fashion trends. This means regular shopping for designer clothes, shoes, bags etc. To save your money, you need to forego this decision.
Avoid unnecessary shopping, instead work with the clothes in your closet. If you have to buy clothes, you can try out second-hand clothes that are wearable and cheaper.
Once in a while, you can also get clothes from family and friends when giving away or even random giveaways online.
Reduce entertainment cost
With such a small amount of money to manage through the month, you will need to cut out entertainment costs.
For example, you can watch movies from home instead of going to the cinema. You can forego going out with your friends to avoid unnecessary expenses.
Carry home-packed lunch
One of the ways we use up most of our income is by eating out. Grabbing food and drinks from Starbucks or MacDonald’s every day can be an expensive affair.
If you work away from home, you can carry some packed lunch as an alternative to eating out.
Look for a job close to home
If you have to work far from home, the transportation cost to and from work every working day may take a huge share of your income. There is no need to have almost a quarter of your $1000 salary taken away by transport expenses.
You can look for a job close to home, where you can just walk to and from or where the transportation cost is very minimal.
Save some money
Living a frugal lifestyle enables you to save up some money. Always put some money back from what you have.
Saving will help you build your financial capacity to start your own business or even make another investment. Furthermore, you will always be financially secured in case of a financial emergency.
Also, you can use a part of your savings for entertainment purposes, going out with your friends or even shopping for that one thing you’ve always desired.
Transfer your money into a high-yield savings account
After paying for all your bills and expenses, you will most probably have some money left. Even from $1000 a month, you can still set some money aside for your savings.
Putting your money in a traditional bank will yield a low interest of 0.03% savings rate. On the other hand, having your money in a high-yield savings account will grow your money at a higher interest rate of 1.70%.
Reusing is one of the ways to save on costs. This is a common practice by the wealthy to focus on their finances or other necessary things.
For instance, you can use grocery tins as kitchen containers or even as candle holders. Also, you can reuse clean water from your dishes to water the plants in your garden to minimize water bills.
Time to use your money wisely
Following through these steps will definitely help you manage through the month with $1000.
If $1000 is still inadequate, you can look for another job to increase your income and achieve more financially.