Saving money can seem like a challenge, yet alone doing it on a low income. That might seem impossible. When your monthly bills keep piling up, it can be easy to feel overwhelmed and start to worry about how you will manage to cover all your expenses and have money left over to save.
According to GOBankingRate’s survey of 1,000 people across the US, 38% of adults have less than $100 in their checking accounts and 36% have less than $100 in their savings. This might seem a bit troublesome, but it’s not to scare you.
With a few simple lifestyle changes, you can easily put away a few extra dollars each month. In this blog post, we’ll share 15 ways on how to save money fast on a low income.
1. Create a Budget
Setting a budget is a game-changer when it comes to saving money, no matter how much you make. A personal budget will allow you to keep track of where every hard earned penny is going. It happens too often that we spend money carelessly and don’t realize exactly how much we spend.
There are a few budget strategies you could use. The 70-20-10 budget rule is one solution where 70% of your income post-tax goes towards all your essentials. Twenty percent goes towards savings and investments, while the last 10% is for extra debt payment or donations.
Another budget method is to list all of your expenses and categorize them into necessary and unnecessary things. Rent, groceries, gas, car payments are just a few categories that should be included in a budget.
Whether you write it down in a notebook or use a budgeting app, budgets are sure to help you save money fast and improve your finances. An app like Hiatus allows you to create custom budgets based on your spending habits, which will help you avoid those common budgeting mistakes we all fall victim to.
2. Open a Savings Account
Whether it’s a high-yield savings account or one of its alternatives, putting money into some type of savings account can help you save money fast even with a limited income. You won’t be tempted to spend the money since it won’t be in plain sight in your house.Money in a savings account will earn interest and grow overtime.
A traditional savings account averages around a 0.42% APY (annual percentage yield), while a high-yield savings account can earn 5%-7%. Money in a savings account is protected by the government and it’ll always be accessible in the event of an emergency.
5. Pay Off Outstanding Debts
Whether it’s student loans, your mortgage, or just credit card debt, being able to clear up your outstanding debt will help in the long term. Yes, it’s not “saving” if you’re spending more money, but the interest you pay on debt adds up over time. Pro tip: pay off your debt with the highest interest rates first and then work your way down to lower interest debts.
6. Always Look For Deals
There are many ways to take advantage of discounts when living on a tight budget, including using coupons. Look for coupons online or in-store, and use them when purchasing things you need. Additionally, take advantage of sales to save money on clothing, household goods, and electronics. Check out different stores to compare prices and get the best deals. However, make sure the items you're buying are essential, and not just impulse buys. Consider joining local groups that offer discounted rates on services such as food, entertainment, and transportation.
7. Change Your Financial Institution
Nowadays, everything is about getting your attention for your service. The same goes for financial institutions. A majority of them will even incentivize you to switch from your bank to theirs. These places might juice up the perks for you to secure another customer under their belt.
8. Get A Side Job
If you’ve cut spending and you still feel like you’re not progressing, consider getting a side job. It’s the easiest way to increase your income and put more into savings. Freelance or part-time jobs that could boost your income are driving for Uber or Lyft, online tutoring, or even selling items online. Flexible options such as dog walking or cleaning houses will let you work your side hustle into your existing schedule.
9. Compare Different Rates On Insurance
It’s not set in stone that you have to keep the same insurance companies forever. In fact, it doesn’t hurt to look around every couple of years for different insurance plans. Some car insurance companies will offer you a better deal if you have a good driving record. You can also look into bundling both your car and homeowners insurance because you may be entitled to a better plan getting both insurances from the same company.
10. Spend Less Money On Food
One of those expenses that you can't hide from but you sure can stay on top of. People tend to downplay how much money they spend on food. Let’s face it, three meals a day can add up, especially if you’re one who often dines out and likes to socialize.
Some of us even get lazy when it comes to food and have get our food from meal delivery kits to cut down on time spent in the kitchen. That doesn't mean it'll cut down the food expenses. HelloFresh and BlueApron are just two to name and while the gourmet aspect seems nice, the cost may not be worth it.
Make a conscious effort to see how much money you’re spending on food monthly. Both preparing your meals and making coffee at home are great ways to save money fast on a low income. You’d be surprised but taking these steps can help slice the cost by half or even more!
11. Buy Second Hand Items or Shop At Thrift Stores
Shopping for goods at a thrift shop, online like the Facebook Marketplace or eBay can help you save on any purchase. Yes some of the things might be second hand, but that doesn’t mean it isn’t in good shape. Even if you’re tight on funds, these different places can uncover some good finds. Some people are even willing to give away things for free due to a relocation so the only expense you might have is picking that item up.
12. Find Cheaper Ways To Travel
Getting from point A to point B can be a huge expense. Instead of driving your car everywhere you go, invest in a bike or think about walking to places you can. This will cut down on gas costs and you can get in some exercise as well, two birds with one stone. Using public transportation is another cost-effective option instead of driving everywhere. If you happen to live closeby to a coworker, you can carpool with them to save both yourselves money on gas. Remember, the small sacrifices you make now will pay off in the long run.
13. Invest In Pre-Tax Savings Options
Take advantage of automatic contributions to boost your retirement savings. By setting up regular contributions to your employer-sponsored retirement plan, like a 401(k), you can use pre-tax dollars to fund your future. Not only will this help lower your taxable income but may also provide a valuable employer match program. Some employers will match your 401(k) contributions, effectively giving you free money towards your retirement goals. Keep in mind that most employer-match programs have a minimum contribution requirement to be eligible.
14. Become A Handyman
Learning how to save money fast on a low income could require some YouTube watching or WikiHow reading. Sooner or later, something in your house or car will need to get fixed. Nothing lasts forever. Having to pay a maintenance worker could cost a pretty penny for their services so learning how to do things yourself can help you save your money. If things aren’t clear, you could always ask a friend who might actually do that for a living.
15. Unplug Appliances
Energy bills are a major expense for many households. Cutting down on energy bills is a smart way to save. Don’t just switch off the lights or appliances when you’re not using them, but instead unplug them. Even if they’re off, they will still continue to draw power. You can also replace incandescent bulbs with energy-efficient LED Light bulbs. Using energy-efficient appliances like washing machines or fridges will also help lower your energy bill.
5. Pay Off Outstanding Debts
Whether it’s student loans, your mortgage, or just credit card debt, being able to clear up your outstanding debt will help in the long term. Yes, it’s not “saving” if you’re spending more money, but the interest you pay on debt adds up over time. Pro tip: pay off your debt with the highest interest rates first and then work your way down to lower interest debts.
6. Always Look For Deals
There are many ways to take advantage of discounts when living on a tight budget, including using coupons. Look for coupons online or in-store, and use them when purchasing things you need. Additionally, take advantage of sales to save money on clothing, household goods, and electronics. Check out different stores to compare prices and get the best deals. However, make sure the items you're buying are essential, and not just impulse buys. Consider joining local groups that offer discounted rates on services such as food, entertainment, and transportation.
7. Change Your Financial Institution
Nowadays, everything is about getting your attention for your service. The same goes for financial institutions. A majority of them will even incentivize you to switch from your bank to theirs. These places might juice up the perks for you to secure another customer under their belt.
8. Get A Side Job
If you’ve cut spending and you still feel like you’re not progressing, consider getting a side job. It’s the easiest way to increase your income and put more into savings. Freelance or part-time jobs that could boost your income are driving for Uber or Lyft, online tutoring, or even selling items online. Flexible options such as dog walking or cleaning houses will let you work your side hustle into your existing schedule.
9. Compare Different Rates On Insurance
It’s not set in stone that you have to keep the same insurance companies forever. In fact, it doesn’t hurt to look around every couple of years for different insurance plans. Some car insurance companies will offer you a better deal if you have a good driving record. You can also look into bundling both your car and homeowners insurance because you may be entitled to a better plan getting both insurances from the same company.
10. Spend Less Money On Food
One of those expenses that you can't hide from but you sure can stay on top of. People tend to downplay how much money they spend on food. Let’s face it, three meals a day can add up, especially if you’re one who often dines out and likes to socialize.
Some of us even get lazy when it comes to food and have get our food from meal delivery kits to cut down on time spent in the kitchen. That doesn't mean it'll cut down the food expenses. HelloFresh and BlueApron are just two to name and while the gourmet aspect seems nice, the cost may not be worth it.
Make a conscious effort to see how much money you’re spending on food monthly. Both preparing your meals and making coffee at home are great ways to save money fast on a low income. You’d be surprised but taking these steps can help slice the cost by half or even more!
11. Buy Second Hand Items or Shop At Thrift Stores
Shopping for goods at a thrift shop, online like the Facebook Marketplace or eBay can help you save on any purchase. Yes some of the things might be second hand, but that doesn’t mean it isn’t in good shape. Even if you’re tight on funds, these different places can uncover some good finds. Some people are even willing to give away things for free due to a relocation so the only expense you might have is picking that item up.
12. Find Cheaper Ways To Travel
Getting from point A to point B can be a huge expense. Instead of driving your car everywhere you go, invest in a bike or think about walking to places you can. This will cut down on gas costs and you can get in some exercise as well, two birds with one stone. Using public transportation is another cost-effective option instead of driving everywhere. If you happen to live closeby to a coworker, you can carpool with them to save both yourselves money on gas. Remember, the small sacrifices you make now will pay off in the long run.
13. Invest In Pre-Tax Savings Options
Take advantage of automatic contributions to boost your retirement savings. By setting up regular contributions to your employer-sponsored retirement plan, like a 401(k), you can use pre-tax dollars to fund your future. Not only will this help lower your taxable income but may also provide a valuable employer match program. Some employers will match your 401(k) contributions, effectively giving you free money towards your retirement goals. Keep in mind that most employer-match programs have a minimum contribution requirement to be eligible.
14. Become A Handyman
Learning how to save money fast on a low income could require some YouTube watching or WikiHow reading. Sooner or later, something in your house or car will need to get fixed. Nothing lasts forever. Having to pay a maintenance worker could cost a pretty penny for their services so learning how to do things yourself can help you save your money. If things aren’t clear, you could always ask a friend who might actually do that for a living.
15. Unplug Appliances
Energy bills are a major expense for many households. Cutting down on energy bills is a smart way to save. Don’t just switch off the lights or appliances when you’re not using them, but instead unplug them. Even if they’re off, they will still continue to draw power. You can also replace incandescent bulbs with energy-efficient LED Light bulbs. Using energy-efficient appliances like washing machines or fridges will also help lower your energy bill.
