Ways to Save Money on Low Income
Taking care of daily expenses can be really challenging on a low income. Not only it seems impossible to make significant progress with your money-saving efforts, it can also become frustrating, especially when you’ve set financial goals such as putting down a house deposit or buying a car.
Nevertheless, there are creative ways to save money and increase your savings while you’re earning a modest income. Read on these tips to help make this process easier for yourself.
Change your attitude towards money
Change your attitude towards money to change your savings trajectory. It’s not always easy, however, this is critical for optimal money-saving on low income.
Reading financial books, setting goals, creating a budget, and avoiding debt can be part of your approach in saving and how you perceive money. Ultimately, it’s about making a firm commitment to yourself, your family, and your bank account of not indulging in unnecessary purchases until your savings hit the next milestone.
Take note that the next milestone we’re talking about is not your final goal, as it’s quite unrealistic to just cut off all your leisure spending indefinitely. Setting milestones along the way is important for long-term motivation, where you’re basically rewarding yourself as you progress.
Create a budget
The key to start accelerating your savings is to learn how to create a budget. There’s a good reason why it’s one of the perennial tips in just about every article you can find on saving money.
Without an actual budget, it’s impossible to track and achieve your savings goals. You might also discover that the reason you’re struggling on a low income is due to the fact that you are simply not doing it right: not planning your grocery shopping, not knowing how to save on electricity bills, or not cutting your unnecessary subscriptions, etc.
You can map out your budget weekly, fortnightly, or monthly, depending on how your salary is paid. Then, take these steps to make a budget:
- Determine how much you make each month.
- Subtract every ongoing expenses such as rent, groceries, and bills to see what your usual balance is. Add 100 or so extra to the balance for “surprise” expenses.
- Halve the amount left and put that towards savings. You may also set up automatic savings.
- The money after this is what you can spend on little luxuries.
Thus, you can make an informed decision on where you might cut down on discretionary spending and save more money.
Save on household bills
Cut back costs by looking for better deals on your household utility bills. Ask your water, electricity, and internet providers to see what recourse they can offer you. They might even renegotiate your household bills, where some utility providers offer payment plans for customers on low income.
There are lots of practical ways to reduce your expenses on your regular bills. Some of which can be found in this article “Handy Tips to Save Money on Groceries” to help change your attitude towards money and eventually encourage you to create a budget.
Avoid or get out of debt when you’re on low income
If you are already in debt, using your credit card seems the only solution. But, only choose this option for emergencies because repayments can take a big bite out of your money for savings.
So sort out your debts and try to get out of them as soon as possible. And remember, avoiding debt altogether is one of the definitive steps towards financial freedom.
Earn a second income
To save more money on low income, look for ways to earn a second income. What you can do is pick up a side hustle or gig to supplement your pay.
You can easily and comfortably make a second income without having to get a second job. With the following ideas, you can started, such as:
- monetising a hobby
- getting cash back from money-making apps
- selling items online
- becoming an influencer
- investing in real estate
- starting a service business.
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