Save money and live better ! The mindset of saving money is not easily achieved. Learning how to save money on a low income helps you to secure financial independence and plan for your future, use these tips to start saving today.
Using a budget planner is a great way to save money when you have a tight budget. A budget is the number one way to save money. They help you manage your priorities by controlling spending. Controlling spending then leads to more savings. It is important to know exactly where your money will be going for the upcoming month. This decreases stress over money because you see exactly where your money will be put to use.
Although, sticking to a budget is not an easy thing to do, especially if you have never done it before. It gets easier with time as you make adjustments to your budget. To facilitate this process, consider purchasing a budget planner book or downloading an app to help you manage your expenses in real time. In summary, a budget is a statement of our priorities.
2. Record Expenses Each Month
Recording expenses each month is the second tip to saving money effectively. This tip is also very similar to budgeting. In fact, the two go hand in hand. For budgeting it is important to record your expenses so you stick to your budget and find out where you went wrong if you are over budget in a certain category.
Recording expenses each month helps you see at the end of the month just how much those daily coffee runs add up to or how much all that ski equipment cost you. This puts things into perspective and will change your mindset about what you should be spending your hard earned money on. This step, even though it seems insignificant, was an eye opening one for me and allowed me to cut way back on unguided spending.
3. Make Food at Home to Save Money
Cooking at home is a great way to save money when you live on a tight budget. Restaurants and especially food delivery apps like UberEats or Caviar all need to make substantial margin in order to stay in business. Because of this, they charge a lot more for food that you can make at home for 1/3 the price.
This is especially the case with food delivery apps. These apps charge you for the restaurant food, delivery charge, tax, and the drivers tip. This makes your burger add up to a $16 meal when patties in the grocery store only cost around $3-$6 depending on quality. Planning your at home meals at the start of the week will help you minimize expenses and reduce the urge to order food last minute.
4. Cut spending
Cutting unnecessary expenses can save a lot of money. If you have 3 or 4 entertainment subscriptions then you have too many. $12 a month may not seem like much when paid monthly and forgotten. However, at then end of the year, that adds up to $144 for one service. That is money that could be used to pay off debt or placed in savings / investments.
Cutting spending is usually the tip I get the most pushback on because most people want to buy things that make them happy with their hard earned cash. Its not forbidden to completely cut all spending and only buy necessities, it is just encouraged to buy less. End a few subscriptions, think twice about buying that brand new iPhone and wait a year to get it when the price drops, little things like this add up at the end of the year.
5. Pay Off Debt
Paying off debt is a great way to put more money in your savings. Now this is obvious but let me show you exactly why. Most people when paying off debt, only pay the minimums every month. Lets say you have $12,000 of credit card debt at an 8% interest rate. The minimum is $200 a month. At that rate, it will take 77 months to pay off ! More alarming is the fact that the interest will amount to an extra $3,375. If you bumped your monthly payment to $500 then you will pay off your debt in 27 months and only accrue $1,120 of interest. It sucks being in debt, and the more money used to pay it off quicker, the lower your interest and total amount paid will be.
More Informative Save Money Articles
- How to Save Money in College for Students
- How to Pay Off Student Loans Fast
- Paying off student loans fast can save you thousands of dollars
- How to Stop Living Paycheck to Paycheck
I hope you learned how to save money on a low income. Save money live better on a low income if you implement these methods today. Thank you for reading, please subscribe if you enjoyed this article.
- Better Money Habits. “How to Save Money – 8 Simple Ways to Start Saving Money.” Better Money Habits, Bank of America, 3 June 2020, www.bettermoneyhabits.bankofamerica.com/en/saving-budgeting/ways-to-save-money.
- Schulte, Taylor. “11 Insanely Easy Ways to Save Money.” Define Financial, 18 Nov. 2020, www.definefinancial.com/blog/ways-save-money/.