Do you find it difficult to save money? Do you find it even more difficult to save money on a low income? If yes, then you’re at the right place. Here we’ll tell you about 9 ways you can save money on a low income. Savings play an essential part in a person’s life. It can be a lifesaver.
At all times, you should have at least $10,000 in your savings fund. It saves you from taking emergency loans or asking for money from your friends or family. But, are you aware of the fact that more than 43% of Americans don’t even have even $1000 in their emergency fund or savings? If you’re one of those 43% people then read the complete article and start saving your hard-earned money.
Save Money on a Low Income
If you want to save money on a low income or want to know how to save money on a very low income then here we will tell you about 9 easy ways to save money. Follow our list given below.
Track Your Budget
If you want to know how to save money on a low income budget then the most important thing is to make a budget. A budget will help you keep a track of every single penny that you are spending. Take a sheet of paper or download a budget spreadsheet from the internet and mention your total income and your expenses.
As soon as you spend some money, mention it on your budget sheet and deduct it from your total amount. At the end of the month, you will have a record of all your expenses. With this, you can analyze how much money you’re left with and where you overspent so that you can save that money from the next month.
Curb Your Expenses
Once you have your budget, examine that budget. You’ll get to know where you actually had to spend versus where you overspent. Once you have complete knowledge of this, you can curb your unnecessary expenses.
If you want to curb your expenses then you should definitely follow the 50:30:20 rule. This rule is pretty simple and easy to follow and will help you save a lot of money. Plan your budget in such a way that 50% of your income goes for all your needs like paying house rent, food, car fuel, and medical bills, etc. 30% of your income goes for your wants, like buying new clothes, going out for brunch or dinner, vacations, etc. Last but not the least, 20% of your income goes directly into your savings.
This way you will make sure that you save at least 20% of your income every month. Once you master this plan, you can increase your saving percentage to increase your savings. If some money is left from that 30% of your wants then add that to your savings as well.
Make More Money
If you want to know how to save money fast on a low income then the best way is to start making more money. If you feel like you’re underpaid for your work then you can change your job and start working somewhere where you get more money for your work.
You can also save money by saving money on your regular monthly bills. Our guide on how to save money on bills will assist you in saving money on bills.
You can also start some side jobs to earn more money. You can work as an Uber driver after your work hours or you can start earning money by following your hobbies or passion. For example, if you like writing then you can work as a freelance writer.
One thing to take note of is if you start making more money then make sure that you put your extra income into your savings. If there’s no need then you shouldn’t increase your expenses instead, save that money.
Fix Your Thinking
It all starts with your thinking. Be in the right mind space. Stay determined that you can save money on a low income. Make a promise to yourself that you’ll not take payday or emergency loans and you’ll have enough money in your savings funds.
Avoid Loans and Debts
If you can avoid loans, avoid them. Have enough savings that you don’t have to take emergency loans or payday loans. If you avoid loans, the interest you pay on them can be your savings. Curb your expenses if needed, but avoid loans.
Even if there’s no other option and you have to take a loan then take a loan from the bank. Banks provide loans with comparatively less interest.
Choose Your Environment
The environment you live in has a huge impact on you. If you think that your friends spend a lot of money and you end up doing the same under peer pressure then leave that friend circle. Choose an environment where you can learn the importance of savings and how to save money.
If you invest in the right place, you can save a lot of money. If you want to save a lot of money then investments can be the best. Do your research, and invest in tangible and intangible things where you are sure that you will get a good return. Investments can feel like a big expense at the start but are very profitable in the future.
Control Your Impulses
Before buying anything, ask yourself, do you really need it? There are many things in this world that we want to own, but we don’t really need them. While shopping, we end up making a lot of impulsive decisions which can affect our savings.
Generally what happens is, if we see that there is something for $100 and it is being sold for $60 then we buy it irrespective of the fact, if we need it or not. Make sure that you only control your urge and do not make impulsive decisions while shopping.
Open Savings Account in Bank
It can be challenging to save money in cash. You might get impulsive and spend that cash. So, it’s better to save money in a savings account in the bank. While opening a savings account, do your research. See which bank provides the highest interest on your account and then go for that bank.
Helpful guide- Know how many saving accounts you can have in total.
Frequently Asked Questions (FAQs)
Q1- How can I save 1000 in less than a month?
You can only save $1000 in less than a month if you have a monthly income of $5000 or more. If you follow our 50:30:20 rule and you have a good income then you can easily save $1000 or more in less than a month.
Q2- Is 500 a month good to save?
Yes, of course. The habit of saving is more important than the amount of savings. Once you learn how to manage your expenses, then your savings will only increase. But yes, $500 is a great amount to start with.
It can be difficult to save money on a low income, but it’s not an impossible task. No matter what your income is, it is very important to have savings. It saves you from taking loans and the embarrassment of asking for money from your friends and family. If you follow all the suggestions given above, you will easily be able to save a good amount of money in no time.
- David Garcia is a nationally-recognized consumer and money-saving expert who helps people make smart decisions with their money. He has been featured on NBC’s Today Show, Good Morning America, ABC News, and CNBC as well as in The New York Times & other media outlets. With more than 13 years of experience in the personal finance space, David is an experienced writer and researcher. He has written for major publications where he provides readers with actionable advice to save money on groceries, insurance, and more. With his work for various publications, David is an active contributor to the Credit Card Insider blog where he shares insights into credit cards such as rewards programs and interest rates.
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