We all want to save money so that we can plan a better future for ourselves. We have various goals such as traveling, buying a car, purchasing our dream home – but when we have a relatively low income, this might seem impossible to do. When you live from paycheck to paycheck, you can barely spare the money – and saving tends to be the last thing on your to-do list.
However, with some smart financing, this might not be such an impossible thing at all. You just need to rethink the way in which you handle your money, put everything in motion, and you might just be able to save up for that goal that you have in mind.
Here are some tips for you to save money on a low income
Reduce Your Housing Costs
This is generally the case if you are renting, but it may also apply to houses that are already yours. Let’s say that you are a single person that lives in a two or three-bedroom apartment and have a lot of space that you do not use. Not only will the rent be higher, but the money you pay on utilities also tends to be much higher.
However, if you opt for a nice studio apartment, you would be able to save quite a lot because it will cost hundreds less. The same thing goes for houses over apartments; renting an apartment will be much cheaper compared to renting a house.
Pay Off the High-Interest Debt First
You can’t save money if you have a lot of debt coming up straight up at you – so, a good way to save money is to get rid of the high-interest debt first. This might not seem like something easy to do – and it might certainly take some time – but if you prioritise your money, you will see that it will eventually get easier to handle.
You also need to remember that as you are going forward, you might want to avoid accumulating more high-interest debt. Steer clear from loans that have high interest – and if it’s completely necessary, go for short ones that have low-interest rates. If you’re stuck in a vicious cycle of debt, consider debt consolidation. Merge all your existing debt obligations into one repayment, with one loan that may even have a reduced interest rate.
Eliminate Credit Cards
Having a credit card might be a fancy thing in this day and age – but one inconvenient aspect of credit cards is that they also charge interest. Practically, you will be paying for the fact that you are borrowing – accumulating even more debt.
You should keep your credit card only if you can justify that the purchases will allow you to save money in the long run. However, if that is not the case, then you should consider getting rid of your credit cards completely. If you do not want to close your account, simply use the cards in case of emergency and avoid them during the rest of the time. This way, you will not be wasting money on interest.
Cut Back on Food Expenses
Food is an expense that we can’t avoid – after all, we need to eat. However, there are ways for you to cut the food expenses – and not starve in the meantime. For one, you might be able to cut down your food expenses by making use of government programs (e.g. food boxes and food stamps).
You may also save money on food by cooking instead of going out. Do you want to eat a nice, juicy steak? Buy some meat at the market and cook it yourself. It will be at least three times cheaper than a steak you buy at a restaurant.
Cut down your energy bills
Whilst it’s tempting to blast the heater on in winter, your bill can give you the shock of your life. Rug up with an extra blanket or two Shop around for a new energy provider or utilise timers. Cut down your energy bill with these smart and simple tips.
Save on Entertainment
This may be a difficult thing to do for some, but it’s a necessary evil: if you want to save money, you have to cut back on entertainment. Many people spend hundreds of dollars on nights out, movie tickets, streaming services, and various other things that they use to entertain themselves. However, it’s an expense that will eventually prevent you from saving money.
Now, we’re not saying to cut the entertainment completely; we’re just saying that you should choose your battles wisely. Choose the events that are only of the greatest interest to you – and don’t go to every live event that takes part in your area. Not only will you be spending money on tickets, but you’ll also be killing your budget on food, drinks, transportation, and other things.
Similarly, if your form of entertainment involves reading books or playing video games, it’s less expensive to rent them or take them from your local library than to purchase them.
If you want to save money on a low income, then budgeting is the answer for you. Figure out your priorities, cut down on what you can – and be smart on your purchases. Online budgeting calculators can help you organise your finances and keep track of your income and spending. Sometimes, you won’t even have to pay for anything, because you can get some things for free. Once you have figured out a goal and a battle plan, it should be easy to start saving.