What would you do with an extra $5,000 a year? The possibilities are endless, right? You could pay down some debt, treat yourself to a nice vacation or stash some cash away for a down payment on a home. So how can you feel as though your salary went up an extra $5k this year? Well, it won’t be easy but we have some ideas.
First of all, when you make an extra $5,000 in salary, you’re actually only taking home part of that due to taxes. Suppose you pay around 20% in taxes each year. That means that a $5,000 raise will be about $4,000 extra in your paycheck this year. If you break that down on a monthly basis, you’ll see that that’s about $335 extra in your pocket each month. What that also means is that if you identify $335 in monthly savings, you can actually mimic a $5,000 raise! So how might you go about finding that savings?
Just Say No
Sometimes you can get yourself locked into a commitment to spend money without really thinking about it. Immediately saying yes to meeting someone for dinner or attending a wedding or birthday party may put you on the hook for money that you don’t really need or want to spend. Instead, give some thought to exactly how much something is going to cost you before committing one way or another. You’ll be surprised how much money you can cut from your budget with just a little bit of thinking ahead.
Stop Buying Name Brands
Whether you’re shopping for groceries or kids’ clothing, it’s easy to start thinking that the only products worth buying are the ones that you’ve seen advertisements for. That’s definitely not the case. Start looking for cheaper substitutes for things and over time you’ll find that you can save quite a bit. And if there are some brands that you do prefer to buy, there is always a way to spend less on them, either through sales or discount stores that carry brand names at low prices.
If you own a car, chances are you are burning through gas more quickly than you’d like to be, given how expensive filling up your tank is. Save money by doing what you can to cut back on your driving because even one less fill-up per month could save you $40-$60! Try carpooling to work once or twice a week if possible, avoid always being the driver for friends and coordinate your errands in such a way that you’re not racking up unnecessary miles.
Another great way to save money on the things you buy is to look for gently used items. Sometimes thrift shops or discount stores are a good option for clothes shopping while sites like eBay and Craigslist often have sellers looking to get rid of furniture or electronics they no longer need. That means you can scoop up things you need at a fraction of the price.
If you’re struggling to pay off debt, check out these tactical strategies that will help you pay it off even faster.