Saving money on a low income can feel like mission impossible, especially when you have so much ‘to-do’ on your budget. But the good news is saving is not a luxury for only those who earn more, but for you.
No matter how low your income level is, with these ten (10) hacks on how to save money on a low income, you can stretch your income further than you think by building a tidy sum from your savings.
1. Follow the Money: Track Every Cent You Spend
A colleague at work will often complain to me that he doesn’t understand how his purse drains too fast with nothing to save.
I’ve been there myself, and the first step I took was to track my spending.
In no time, I had realized that buying snacks, paying for subscriptions, or even making spontaneous purchases were the small spending that was quietly depleting your hard-earned money.
Track your expenses to find leakages. You can do this by writing down every expense you make for a month. Identify leakages by grouping your expenses into ‘essentials’ and ‘non-essentials.’ Food, bills, rent, and transport falls on the essential side of your list.
Expenses like snacks, morning coffee, eating out, and some subscription services you have no use for falls under the non-essentials—and there you have it, your money drainer.
With this simple hack, you can free up more money for your savings.
Read Also: How to Live Below Your Means: 7 Hacks You Were Not Told
2. Strip Your Budget of Non-Essentials
After tracking how you spend your money, the next big practical step to take is to create a bare-bones budget that focuses majorly on essential expenses like rent, utilities (electricity, water, and internet), transportation, groceries, debt repayment, and insurance.
Multiple streaming subscriptions, dining out, new clothes, and other non-essentials are cut out or heavily cut down from your bare-bones budget.
This might be a hard decision for you to take, but have it in mind that it’s a temporary measure to stir you out of financial distress by paving the way to save more.
You can slowly re-introduce non-essentials into your budget as your income level improves.
3. Pay Yourself First By Automating Your Savings
When I first made the decision to start saving, I would have it in mind to save 20% of my income, but by the time I am done spending,
I would be left with 5% of my income for savings. Savings automation made the difference; it taught me to condition my mind to paying myself first by automating the transfer of 20% of my income from my salary account to a designated savings account.
With this simple hack, you can condition your mind to save first, and spend what’s left after savings.
This way, you can grow your savings over time to become a financial springboard that can launch you to greater heights.
Remember, the trick is not in the amount but in the consistency of your action, hence the need for you to automate your savings.
Read Also: 7 Easy Money Management Tips You Can Start Today
4. Use the Cash Envelope System to Control Your Spending
I don’t like spending cash, but swiping my card makes me spend more than I had initially budgeted for non-essentials, and in some instances, I would have made impulse purchases before realizing my folly.
Hence, I am left with no choice but to adopt the cash envelope system to help me control my spending.
Label your envelopes with budget categories like groceries, transport, eating out, and entertainment, put the designated amount of cash in each envelope.
If you want to purchase groceries, spend only from the grocery envelope, and when there’s no more cash left in the grocery envelope, then you’re done spending on groceries for the month. To get groceries again, you will have to wait until the next month or next payday.
This way, you would not be tempted to swipe your card for impulse buying, or spending way more than you have budgeted for non-essentials.
This method of spending from envelope will work for you because seeing your hard-earned buck in your hands will make you think twice before spending on impulse.
This is a great tool for training yourself to be a financially disciplined person.
5. Take Advantage of Coupons, Discounts and Freebies
As a low-income earner, you should be smart about how you spend your money; stretch every dollar you earn by taking full advantage of coupons, discounts and freebies.
You save a few dollars from every purchase you make using coupons, discount codes and cashback apps.
Over time, your savings can add up significantly; make sure you ask for discounts wherever you go, you will be surprised at the number of stores, services, and public institutions that offer discounts.
Also, you can take advantage of freebies like free public events, food pantries, clothing giveaways, utility assistance, free workshops, movie nights, and lots more to free up more money which goes into your savings
Read Also: 9 Financial Habits of Women Who Are Never Broke
6. Plan and Cook Your Meals At Home
Planning and cooking your meal is one of the best decisions you can make as a low-income earner because the amount you spend on a single takeout can get groceries for three home-cooked meals.
Plan and cook your meals in bulk, portion it into containers and refrigerate to save you time, money, and also reduce wastage.
Also, planning and cooking your meals at home gives you control over your health and nutrition because home-cooked meals are often more wholesome and healthier.
Read Also: 8 Spending Habits You Should Imbibe When Passing Through Financial Crisis
7. Use Public Transport or Carpool
Transportation is a major expense that depletes my money.
Think of it, I have to fuel my car, pay for parking, service and maintain it, and also budget for unexpected repairs.
I was amazed at the amount I saved by ditching my car, going public transport, and taking advantage of carpooling for a month. Since then, it has continued that way.
Taking advantage of public transport system, carpooling with coworkers or neighbors is a great transport alternative that frees up more money from your income.
For short distances, you can consider walking or biking, which also is cost-effective on saving up on transport and improving your physical and mental health.
8. Buy Secondhand or Swap With Friends
Starting out my life as a low-income earner, I knew I had no business buying new designer wears and other items; instead, I shopped secondhand.
Many secondhand items are gently-used and in good condition; some are even brand new.
Therefore, choosing to go secondhand can save you much money because you’re buying items cheaply, at a fraction of their original cost.
Read Also: 7 Signs that you’re Financially Smart
9. Set Micro Financial Goals
Saving used to feel like an uphill task for me, especially when I set big financial goals that looked so unachievable, until I learned the secret of setting small financial goals.
Instead of setting big targets for myself, I started small by saving $10, $100, $1000, and so on.
In no time, my small wins had helped me to achieve bigger goals.
Each time you hit a milestone, remember to celebrate yourself no matter how small.
You could treat yourself to a homemade dessert, or enjoy a relaxing TV show; by any means, do something that will reinforce your progress without causing you setback.
Remember, slow and steady wins the race. So, make savings a lifestyle, and sooner than you expect, your savings will add up to big wins.
10. Think Side Hustle
I make more money from side hustles. You will be surprised at the amount of money you can make from side hustles too even if you’re on a tight schedule.
If you love driving, you can make extra money doing delivery driving, or join a ride-hailing service like Uber on evenings and weekends.
Taking up a side hustle will help you to achieve your savings goals faster, pay off accumulated debts, or build your emergency fund while also improving your living standard.
Conclusion
These financial hacks to save money can turn around your financial life. It’s not about how high you earn, but how well you live.
With a solid plan, a bit of creativity, and the discipline to keep going, you will live a good life, and in no time, you will achieve your financial goals, leading to financial freedom.
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