Do you know that only 50% of U.S. households are following a monthly budget? According to The Credit Examiner, the average American spends $1.33 for every $1 earned. Whether you are planning to buy a house, a car, a major appliance, pay for college or even a trip for your family, saving for major expenses can be a challenge. However, it doesn’t have to be that way. With a bit of frugality and a lot of patience, here’s how to stay on budget and earn extra cash for your next big purchase.
Make the most out of your credit
One in four Americans has more debt than savings. In a perfect, debt-free world, we would all stop buying things we cannot afford to pay up front. But in reality, there are things we simply must purchase on a time limit. Despite the disadvantages of using a credit card, there are plenty of benefits to using one – especially if you plan to build your credit. Every time you make a payment, aim for more than the monthly minimum.
For example, let’s say you have to pay a $9,205 credit debt with a typical 15% interest. If you pay the minimum $184, it will take nearly 39 years to pay off. Instead, make the highest possible amount to wipe your debt balance as quickly as possible.
Find creative ways to earn extra cash
Got any extra clothing that you don’t use? Want to turn your hobby into a money-making opportunity? There are plenty of ways to earn extra cash for your investment. In fact, it might even become a great way to earn a second income. There are other ways to help your family save money for your next big purchase, including:
- Shop for discounts
- Save the change
- Buy and sell items online
- Reconsider monthly subscriptions
- Skip fine doing and choose homemade meals
- Create a shopping list
- Live below your financial means
- Set a limit on spending
- Eliminate unnecessary expenses
- Use credit cards sparingly
While saving for major expenses may seem impossible, there are plenty of ways for families on a budget. Whether it is cutting down on monthly expenses, buying used items, or making saving a game, try these debt-free ways you and your family can budget for your next big purchase.