The size of your paycheck often affects how you manage it to avoid financial shortfalls. Especially if your paycheck is a fixed income, that is, a fixed monthly salary, and your living needs often fluctuate.
Those with small salaries will find it difficult to set aside money for several things, such as: emergency funds, college tuition, retirement funds, car purchases, and so on.
It is not uncommon for money to run out in the middle of the month. This can happen because they cannot properly manage their monthly paycheck to meet the family’s financial needs. Moreover, every family must have plans for the future, such as: vacations, their own home and car, their children’s college education, and retirement funds. These plans are costly, and finding extra income is not easy.
So you need to know a few ways to manage your home finances on a small salary to make your plans come to fruition.
You shouldn’t get upset or frustrated by a small salary, the priority is to be thankful and manage your paycheck properly. Check out Cermati.com’s description of 12 ways to manage your home finances with a small salary.
11 Ways to Manage Your Home Finances on a Small Salary
1. estimate installment/home pay.
Many people find it difficult to manage their family finances because home payments (mortgage) have cut off a large portion of their monthly paycheck. It is recommended that the mortgage loan be no more than 25% of the total salary received each month.
Tips: look for mortgages that offer the lowest payments, or if you can’t afford a mortgage, look for cheap rent. There should be offers that you can afford. The key is to keep looking for information.
If you own your own home, you can set aside a portion of your salary for savings or investments. If you are single, you can rent out a room in your house to 1-2 friends. The money you earn from renting out your room can help you to make your mortgage payments cheaper and is a good way to invest. That way, you can pay off your mortgage and set aside some money for other investments, such as savings and an emergency fund.
2. Plan your monthly purchases properly.
Financial spending tends to happen when you use money for your wants, although wants are not necessarily needs. The best way to use a little income is to make a monthly spending plan with a written budget.
Spend the money according to the plan you make. When it comes time to buy what you need, you will already have a budget for your purchases. However, don’t spend more than your budgeted amount because the money left over has been earmarked for other needs.
Tip: Plan your monthly budget in writing, dividing your spending list into two parts: primary needs and tertiary needs.
Primary needs include: food, transportation, electricity, water and phone bills, home, motorcycle and car payments, and others. Tertiary needs include: a budget for clothing, travel, and a budget for socializing with friends or co-workers.
Planning your grocery list is very effective because by shopping in bulk quantities, prices will be much cheaper, so you can save more on groceries and have more savings. In addition to getting into the habit of making a monthly shopping budget, you should also stick to the financial budget you make.
3. Buy items you can still buy
Buying things you can still use can save your budget, such as: used cars, used electronics, used furniture, and so on. Many people offer cheap deals for used items that are rarely used, and some have never even been used.
Sometimes you can find an item whose box has been opened, but the item inside has never been used, but it is not sold for the price of a new item because the packaging has been opened. There are many online stores that offer such used items, you need to be diligent in searching for them online.
Tips: Buying used items that are still usable, or used items with conditions like new, will really help you save money. For example, for families who have just moved and need furniture such as: tables, chairs and other household furniture.
It’s best to buy used items that are still good at thrift stores, flea markets or online stores, but don’t forget to haggle. With a little spray paint, used tables and chairs will look like new.
4. have automatic temperature control
Automatic temperature control can help you save money, making it easier to save money. Choose an air conditioner with the lowest power consumption temperature control, so you can save energy and money, even if the purchase price is a little higher than a conventional model.
Tip: Even if it’s programmed automatically, you can still manually change the temperature in your home as you see fit. An advanced climate control senses when the owner is not home, so it automatically reduces energy consumption, which is more efficient. Although they are slightly more expensive, they are more energy efficient and more durable. Nowadays, many air conditioners are automatically designed according to the power required.
5. Use credit cards wisely
Shopping with a credit card is easy, and you can buy anything. Credit cards can help you manage your finances if you use them wisely, such as: using the promotions provided to buy the items you need.
But credit cards can also lead you into long-term debt if you use them carelessly. Studies have shown that credit cards are the easiest way to spend money, because in addition to the amount of money spent, interest and administrative fees are also charged.
Tip: If you can’t control your credit cards, it’s best to forget about them if you want to save money. The habit of using credit cards carelessly will cause you to waste money and lead to serious financial consequences, so don’t let your household get in trouble for credit card debt.
6. save costs on multiple activities
You can do several activities at once to save on expenses, such as: buying lunch while running errands out of the office. This will save you more on gas than making several inefficient trips.
Tip: Set aside the difference regularly in your savings account. Even if you live close to where you work, you can eat lunch and drink coffee at home. There is always a way to save money to make savings, depending on yourself.
7. Drive less.
You can walk, bike, or take public transportation instead of driving your car to the store or to work.
Tip: You can save money on fuel and also have the added benefit of a healthier body if you exercise more.
8. Look for extra income.
Use your free time to look for extra income. There are many ways to earn extra income, such as selling loans, working as a freelance writer, selling online and so on, as long as it does not interfere with your main job. The more extra income you have, the more salary you can put aside for savings.
9. Cut back on eating out or ordering food online
Eating out at restaurants and ordering food online from time to time is fine, but if it becomes a regular habit, it will quickly eat up your paycheck.
Restaurant food costs at least 4 times as much as home food. Not to mention, if you often order food online, of course your food costs will go up.
Tip: If you want to save money, cook your own meals at home. Try to eat at restaurants or order food online (Go Food or Grab Food) only occasionally, not every day. Do this and see how much money you can save by cooking yourself.
10. Use PayLater wisely.
When it comes to meeting household needs, PayLater is nothing new. The ease of getting money loans online through credit apps or e-commerce can make you forget about it.
Make sure you use paylater wisely, not for consumer needs or use paylater because you want to shop instead of for important needs. You have to understand that paying off debt is the same as having debt, you still have to pay it off and try not to be late in paying off debt.
11. Choose a data plan and use Internet data sparingly
Internet has become a basic necessity for Indonesians. Especially now that everything is online, whether it’s work, commerce, or school/education, everything is done online.
You will definitely need an internet data package or WiFi connection at home. To save money, try to choose an Internet data package or WiFi that fits your needs at a price that fits your budget.