“How can I save money on a low income?”

You don’t have any extra money, to buy what you want when you want.

You find yourself counting down the days until payday. 

If an emergency cost were to pop up, you would be in big trouble.

 

I’ve been there.

 

Having to borrow money from family, last minute account transfers, and the “Guess I’ll just throw it on my line of credit”. Been there, done that. 

 

All of the above situations are stressful and embarrassing. You are probably wondering “How can I save money when I am barely able to pay the bills?” 

 

Start small, making little adjustments here and there will add up over time.  And remember saving something (even a small amount) is better than not saving anything at all. 

 

The key to saving, is to spend less money than you earn.

Which can seem far out of reach when you are living on a low income, but it is the only way you can see those numbers grow in your bank account. 

It is hard work, but trust me it is worth it. 

If you are ready to roll up your sleeves and put in the work, keep reading! 

 

1. Create A Budget And Stick To It 

 

A budget on my income? You’re hilarious.

(Thanks, I know)

 

What is a Budget? 

 

A budget is just a plan for your money. You get to decide how each and every penny is spent. 

 

The Basics of Budgeting 

You add up your income.

You add up your monthly bills. (These include housing costs, car payments, internet and such).

You subtract the two and are left with money (hopefully) to allocate to different categories (groceries, entertainment, shopping) 

 

Budget on a Low Income? 

 

Can you have a budget on a low income? 

Yes.

I would even argue that it is essential to know how much money you have to work with, and where it is all going. By knowing what you have to work with it allows you to make the necessary cut backs, and changes to improve your funds and in turn increase your savings. 

 

Need More Wiggle Room? 

It is easier to save if you have a steady income coming in, the more you make the more likely you will be able to save.

Side hustles are a great way to increase that cash flow.  

Try doing gigs for extra cash, mowing the neighbours lawn, walking dogs, Instacart, Uber, survey sites, the list goes on and on. 

 

 

2. Use a Savings account and Leave it Alone

Do not keep all your money in one account. Most people I know just keep all their money in a checking account. 

Which is where all your bills are paid from, making it harder to keep track of what money you can and can’t be using.

 

So I would recommend having another account for your savings goals.

 

Even better than a savings account, is a High interest savings account, a tax free savings account or an investment account. Don’t just let your money sit there, have it work for you and make more money.

 

Leave it alone

If you are saving for a goal, put that money aside and do not touch it, if it helps, do not look at it regularly, out of sight out of mind. 

But I like to see my money grow so I check weekly sometimes daily, to see if I’m on track or not. 

 

What happens if I have an emergency? 

 

• This is where it can get tricky, and become a dangerous habit, every time you have an “emergency” or are  running low on funds, you just take some money out. 
• If you use your money for an emergency you must replace the amount you took out as soon as you can.
• Should have an account for emergencies 
• And then one for other savings goals.

 

An easy way to grow your savings

 

Automate those savings and pay yourself first.

It will make your life so much easier. Choose a designated amount to come out of your account on payday, that amount  will go straight into your savings account, out of sight out of mind. 

Now you can not make the excuse of not being able to save as there was nothing left at the end of the month. Save first, spend what’s left. 

 

 

 

 

 

 

 

 

3. Lower Your Housing Costs

 

Housing costs are one of the biggest pay cheque suckers there is, where most of our hard earned moola goes towards providing a roof over our heads. 

 

Tackling big expenditures will help you save faster in the long run. 

 

It may not be easy to lower your housing cost but the following are some ideas to get you started. 

 

If You Rent

You can reduce the costs by finding a cheaper place to rent, usually outside the city you get more for your buck. But make sure to calculate commute costs as well, there is no point moving to save on housing to only have it cost the same or more from other areas such as transit or gas usage. 

 

• Simply asking for a lower rate or a temporary decrease (make sure you get the approval in writing. 

 

• Downsize. Instead of a 2 bedroom, go down to a one bedroom, or even rent a room in a house, where you share the kitchen and bathrooms. 

• Sign a longer lease and negotiate a lower monthly payment. Occasionally Landlords will sign at a lower price, as to secure a tenant for longer.  

 

 

 

If You Own 

 

• Reduce your utility costs such as electricity, and water usage. Look to see where you can lower your bills, turn off lights when not in use, turn the thermostat down or up a few degrees depending on the season. 

• Put on layers… or take some off if needed 😉 .

• You can also rent out a room/ basement. There are even some people who rent out storage areas, such as their garage, driveway, or shed for extra cash. 

 

 

 

4. Avoid Debt At All Costs

Repayments + Interest incurred = No savings. 

We all know how fast debt can add up, and how quickly it can get out of hand. Avoid it as best you can. 

 

It is best to get rid of debt first to increase your chances of savings. It will all be for nil if you are racking up the debt and missing payments. 

 

 

Focus on paying off your debt

Do what you can to put any extra cash towards your debts, pay more than the minimum payment if you can. 

It won’t be easy, but it will be worth it. 

Then once you have your debt under control those payments can then be used towards your savings. An example is if your goal was to pay $200 a month to get your credit card down to zero, after you finally pay off your card you are already used to not having that $200 dollars so you can put it into savings instead. 

 

 

 

5. Limit Entertainment Costs 

Going out with the gals, going to the movie theatre it all adds up. When trying to save money on a low income, entertainment costs are usually the first to be cut from the budget.

Take a night out for example, from the cost for cabs, there and back, hotel, cover to enter a bar/club, the drinks once you’re in, and the must have greasy food after. You’ll be over a hundred dollars in no time! 

 

Free Entertainment 

 

• Check your City’s calendar. Many cities host a variety of free events each month. 
• Spend time at home, after all you are paying to keep the place. 
• Have a game night.
• Watch a movie.
• Read a book.
• Go for a walk.

 

6. Cut Out The Non-Essentials

 

Anything that is outside bills to survive, can be cut. So if it is not housing, utility, health or food related, you need to think about making some cut backs. 

 

Cut back on your cell phone

Do you really need 10 GB of data? How many phone calls do you really make?  Do you actually use that landline? 

 

Cut back on your cable

Do you really watch all those channels? Can you find your favorite shows on a streaming service such as Netflix? 

 

Car

If you have a car, do you really need it?

 Can you get a car that costs less on gas? Shop around for car insurance. 

 

Eating Out

Yes it does take some work and preparation to cook from scratch at home. It does take time to remember to pack a lunch the night before, but your wallet will thank you. 

Even $10 a day for lunch adds up to $50 a week, which is $200 a month, and $ 2,400 a year!

You can do so much more with that money. 

 

Do a Spending Freeze

 

Really enjoying cutting non-essentials, want to challenge yourself more? Try a spending freeze. 

Restrict yourself to only spending on bills, and nothing else for a week… or even a month!

 

 

 

Still feel overwhelmed and on a tight budget? You’ve done all the budgeting, removing services, stopped eating out and still are short on funds. 

Cut each category on your budget by $5 and you will see the money add up. Be a bit more picky at the grocery, how can you stretch those groceries, use the food you have at home first. Use less gas, run all your errands in one trip, walk to work one day. 

You too can save money on a low income.

Make every dollar count. Cut what you can. Stick to a budget. Your future self will thank you. 

 

I know that may seem like a lot to take in, but stay dedicated and avoid temptations. Start with one frugal moment at a time. 

 

How do you plan to save money on a low income? 

What do you struggle with when it comes to saving or cutting back?

Let me know in the comments 🙂 

 

Stay Frugal,

 

 

 

 

 

Connie xoxo