how to save money on a low income

Save money on a low or reduced income

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.

In the middle of the coronavirus / COVID19 crisis, there are many Aussies really doing it tough financially. Despite the government assistance, many people have experienced lower than normal income levels. We all want to save money so that we can plan for the future, but when everything is spent at the end of the week, it’s impossible to put money aside for “just in case”. While everyone has goals such as traveling, buying a car, purchasing a dream home, survival is the current theme and saving at all might seem to be an impossible task. When you live from pay cheque to pay cheque, week to week, you can barely spare the money – and saving tends to be the last thing on your to-do list. One quote that comes to mind is:

“Do not save what is left after spending; instead spend what is left after saving.” ― Warren Buffett

Right now, everyone needs to be smart with budgeting. Saving a little each week might not be such an impossible thing at all if you try the suggestions below and you are careful. You may need to rethink the way in which you handle your money, to get some momentum, and you might just be able to put a little away as a buffer. 

Here are some of our top tips to save money on a low income:

Reduce Your Housing Costs

It’s a commonsense that you live somewhere to suits your sized household. This is generally the case if you are renting, but it may also apply to houses that you are paying off. If you are single person that lives in a two or three-bedroom apartment and you rattle around in it, it might be time to downsize. Your utilities bills also tend to be higher in larger dwellings.

As a single you may like to opt for a nice studio apartment, or even look into share accommodation where you would be able to save money on a low income because it will cost much less overall. The same thing goes for houses over apartments; renting an apartment is always less expensive than renting a house.

Save money on a low income Pay off high interest credit cards first

Tackle high interest debts first

You can’t save money on a low income if you have a lot of debt that is costing a fortune in interest – 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 the vicious cycle of debt, consider debt consolidation. This allows you to 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.  

eliminate credit card debts cut back on food expenses

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. If you are really struggling to make ends meet and are in dire need for food, you might be able to cut down your food costs by making use of food banks and charitable organisations

You may also save on food by cooking at home instead of going out. A simple Thai take away for 4 can cost up to $60, which in theory could pay for at least 2 -4 nights of home made meals. 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. Meal planning is alsovery helpful if you want to save money on a low income.

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, especially if you are trying to save money on a low income. Rug up with an extra blanket or two Shop around for a new energy provider or utilise timers. Read how to cut down your energy bill.

save money on energy bills save money on entertainment expenses

Save on Entertainment

Firstly, this is something most of us are currently doing, due to the social distancing laws in place. There still some ways you can save in this area. Now is the time to work out if you really need Netflix as well as Stan. 

Don’t cut the entertainment completely, just saying choose wisely. Choose the services you really enjoy, but you may not need to spend money on every streaming service available.

The same can be said for a range of paid online services, such as workouts, as there are many free workouts you could use instead of paying.

During social distancing periods, there are many free online concerts and shows to keep you entertained, and save you money.


If you really want to save money on a low income, then budgeting is the answer for you, especially at the moment. Figure out your main priorities, cut down on what you can – and be smart on your online 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. 

budget wisely to save money

If you have interesting and creative ways to save money on a low income, please share in the comments below. We’d love additional tips for our readers. We are all looking for ways to get through this current health and financial crisis, so please feel free to share!

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