Money management isn’t always easy — but the right budgeting plan that’s sustainable for your lifestyle can help you stay on track. The “trim and transfer” method is one way to help you cut your expenses, save money, pay off debt and work toward your financial goals on a limited budget.
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Read on to explore more details on the trim and transfer budgeting method and signs to determine whether or not it’s the best plan for you.
What Is the ‘Trim and Transfer’ Method?
According to Abid Salahi, finance expert and co-founder of FinlyWealth, the trim and transfer budgeting plan is an aggressive method designed to find extra money on a limited budget.
This budgeting method involves:
- Reviewing every expense and trimming where possible
- Transferring the saved amount to savings or debt repayment
- Doing this consistently to build savings or pay off debt
For example, switching phone providers can potentially cut your bill by $15 per month — immediately transfer that money to a savings account and repeat.
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Signs This Budgeting Method Is Best for You
As many as 62% of consumers live paycheck to paycheck, PYMNTS reported. While the trim and transfer method may not work for everyone, it allows you to prioritize savings and essential expenses even on a strict budget. Here are signs this budgeting method is the best plan for you.
1. You’re working with a very tight budget. If you don’t have money to spare, this method helps you find areas in your budget where you can make some wiggle room.
2. There are opportunities to lower your bills. Cutting unnecessary subscriptions or eating at home rather than going out can help you save money. But if you’re already on a tight budget, even small adjustments can help you save, such as adjusting your thermostat. Even switching to store-brand foods and beverages can save you 20%-25% at the grocery store, according to Consumer Reports.
3. You’re unable to save or pay off debt. A lack of savings and racked-up debt can really put you in a financial pinch, especially if there’s an emergency expense. By prioritizing cutting expenses and saving money, you can climb out of debt, build an emergency fund and work toward long-term financial goals.
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This article originally appeared on GOBankingRates.com: 3 Signs the ‘Trim and Transfer’ Budgeting Method Is the Best Plan for You
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