Times are tough right now for many people. High inflation impacts many things we buy, such as groceries, gasoline for our vehicles, heating and cooling for our homes, and many others. Rising costs add stress to our lives. It seems there are so many things out of our control.
If you’re living paycheck to paycheck, barely making enough to get by, saving even a tiny amount seems out of the question. Saving for bigger goals, like paying for college or buying a house, seems like an impossible dream. But don’t give up!
There are plenty of realistic ways to save money regardless of your income. Concentrate on what you can do to improve your financial situation. Don’t think about what you don’t have or can’t do.
1. Save What You Can
Embrace the idea that no amount is too small for your savings, especially if you’re on a tight budget. You’re familiar with piggy banks, so you know how this works. Whether a few coins or a few bucks, put whatever you can in a separate savings account that pays interest once a week, then don’t touch it. Saving something is better than saving nothing. Just start.
2. Pay Yourself First
You can save money with a low income if you prioritize saving. You do that by paying yourself first. That means every time you get paid, put some money away separate from the funds you use for regular expenses before you do anything else.
Even if you’re broke or in debt, pay yourself first until you have $1,000 put away in case of emergency. Then, you can work on getting out of debt and slowly increasing your emergency fund until you have saved three to six months of living expenses.
Don’t worry about how much money you think you should save or how much someone your age is supposed to have in the bank by now. Focus on what you can save. If that means saving $5 a week, start there.
If you have a 401k at work, save at least 1%. It comes out of your earnings pre-tax, which means you won’t see it, and you’re paying yourself first. If your employer matches your contributions, you double your savings.
3. Automate Your Savings
Choosing to save instead of spend on something fun can be difficult. Having to make that choice several times a month drains your willpower.
Automation is the best way to ensure savings. When you automate, you remove things that can wreck your savings, like forgetfulness and a lack of discipline. The less you have to think about it, the better.
Again, it doesn’t have to be 20% of your income. Set up an automatic transfer from your checking account to a savings account of whatever amount you can. You can always increase it later.
By automating your savings, you’ll never have to think about it. Every paycheck goes into your savings account. If you’re sick of having no money in your savings account, automation will help.
4. Start a Budget
It’s hard to get anywhere without a map. Your budget is your financial roadmap. If you’re struggling to save money with a low income and you’re not budgeting your money, it’s time to create a budget.
When you create your first budget, you’ll examine your monthly expenses closely. You’ll probably spot lousy spending habits, ways to lower spending, or opportunities to trim unnecessary items from your budget.
Build a savings goal into your budget to save consistently. If you only save whatever you have left at the end of the month, you might not save much or at all some months.
You might have more than you thought once you eliminate unnecessary expenses and start your budget. Getting your savings on track could be a matter of making different choices and sticking to your budget.
5. Wipe out Debt
Credit card debt is a big reason many people can’t save money. High-interest debt holds you back from saving and reaching your financial goals. Carrying a balance can cost you three or four figures in interest alone.
Make getting out of debt a top priority. When you create your first budget, you’ll have a contingency fund. But once you have some money, eliminating debt will help you reach your goals.
Once you pay off your debt, you can put the money that went toward debt payments to better use. You can focus on buying a home, putting your kids through college, or aggressively saving for retirement when you’re free. You might have more than you thought once you were free.
6. Lower Your Housing Expenses
Your rent or mortgages. U.S. Census Bureau data indicates that over 40% of renter households in the U.S. spent more than 30% of their income on housing costs between 2017 and 2021. If you can spend less on housing, you can dramatically change your financial outlook.
Here are a few ways to lower your housing costs:
- Consider moving. Could you save by moving to a new location? Moving from the city to the suburbs or a different part of town might save you a lot of money. Finding an apartment that’s $100 cheaper will save you $ar and probably won’t affect your quality of life much.
- Downsize. Smaller places usually cost less. Are you currently using all the space in your house? Could you make do with a smaller home or apartment?
- Rent out a spare room. If you have unused space, you could rent it out to lower your housing costs. You could use a platform like Airbnb to find short-term renters for extra money or try to find longer-term tenants to share expenses.
Examine your situation and see if lowering your housing costs is an option.
7. Spend Less on Your Car
Owning a car can cost you thousands of dollars a year. Cars keep you broke if you let them. All the money you put toward car payments, insurance, routine maintenance, unexpected expenses, registration fees, and gas can prevent you from having any money left to put in your savings account.
Here are a few ways you can lower your auto expenses:
- Shop around for car insurance. You can save hundreds per year by switching providers if you do comparison shopping.
- Pay off your car faster. If you can retire your car loan early, you’ll free up cash and avoid the high cost of financing.
- Do maintenance and repairs yourself. Leave the major repairs to the pros, but minor fixes are cheaper than a dealership or mechanic might charge you.
- Drive less. Use public transportation, carpool, bike, or walk. You’ll lower fuel costs and save some wear and tear.
8. Eat at Home
Opting out of cooking for yourself is too easy. With all the restaurants, fast food places, convenience stores, delivery apps, and prepared foods at grocery stores, no one has to cook. Eating out a lot gets expensive, though.
According to the Bureau of Labor Statistics, the average American household spends $2,375 per year dining out. That money could go into your savings account if you bring your lunch to work and eat at home.
9. Spend Less on Groceries
Overspending on food is too easy, regardless of your income. Supermarkets do an excellent job at separating you from your money, too. How often have you walked out of a grocery store with items that weren’t on your cheaper than always justify blowing up your food budget since hunger is accurate, and you must eat? You can do a couple of simple things that make spending less at the grocery store easy:
- Plan your meals for the week ahead before you go shopping. But don’t start by looking through your recipe collection. Instead, review the store flyer and look in your cabinets before planning anything.
- Make your meal plan based on what you already have and what’s on sale. If you only purchase items on sale and don’t buy anything you don’t need, you’ll automatically save money.
10. Prepare Your Meals in Advance
Spend a few hog meals for the upcoming week. You’ll be less tempted to pick something up or have food delivered if you know what you’re having and it only takes a few minutes to prepare it.
We like to prep our meals on Sunday afternoons. We cook in bulk and then portion everything into containers with dividers. Meals for the next several days go in the refrigerator, and the rest go into the freezer until the night before we need them.
11. Use Coupons and Cash Back Apps
Many retail stores and supermarkets offer coupons in their weekly flyers or mailings. You can also find reviews online, in newspapers, or stuck to the product’s plans. Some retailers offer coupons and exclusive deals to people who download the store app or join the loyalty program.
Free cash-back apps like Ibotta give you cash back on grocery purchases. If you do a lot of shopping online, Rakuten will give you a percentage of your purchase back in cash.
You can save anywhere from a few dollars to a few hundred over time. Don’t spend money on something just because you have a coupon. Only use coupons for stuff you were planning on buying anyway.
12. Cut out Impulse Purchases
If you tend to come home from the store with more than you planned, impulse buying might prevent you from saving money.
Maybe it’s only a few bucks here and there for items like candy, drinks, and magazines. Perhaps a sale item caught your eye, and you couldn’t resist. Whatever the case, unnecessary spending adds up.
Spend a couple of weeks tracking your spending and logging every purchase. You might find a money leak or two you can plug. Here are some backways to cut out impulse buys:
- Make a list before you go grocery shopping and stick to it
- Don’t shop when you’re hungry
- Don’t go shopping when you’re stressed, upset, or emotional
- Use cash instead of a credit or debit card
- Only bring enough money with you to cover the items on your list
13. Stop Being Loyal to Brands
If you want to be able to save money, you should do what’s in your best interests financially. If you’re mindlessly loyal to a particular brand, you’re probably not comparing prices, hunting for the best value, or trying alternatives. Your loyalty benefits the companies that make your favorite products, not you.
Store-brand pantry staples, frozen foods, and canned goods often cost significantly less than their big-brand counterparts. For example, you can save $2 to $3 per bottle by buying store-brand aspirin and over-the-counter allergy meds. You can also find discounts and cheaper alternatives for many things you buy often if you want to try lesser-known or store brands.
Don’t waste your loyalty on companies and brand names. They won’t return the love, and they also cost more than the same thing with a different one.
14. Mind Your Health
You need your health to save money. You also want to enjoy your life once you reach your savings goals. So take care of yourself. Healthcare is expensive, but skipping doctor visits is a terrible way to save money. Preventive care is often 100% covered by your health insurance.
Not going to the doctor means you could be looking at serious medical bills down the road. Regular checkups help with prevention and early detection.
You can also take preventative measures yourself. Try to live healthier by exercising, getting enough sleep, and ditching unhealthy habits. Going to the doctor and adopting healthy habits could save you a bundle in the long run.
15. Bad Habits
If you’re trying to save money with a low income, eliminating harmful habits will help you do that. Vices like smoking, excessive drinking, and gambling cost money. Sometimes, a lot of money.
Consider quitting if you have habits that negatively affect your financial well-being and physical or emotional health. It won’t be easy, but it will be worth it in more ways than one.
16. Stop Paying Unnecessary Fees
Review your credit card and bank statements. You may be losing money to fees that are avoidable, such as:
- ATM fees
- Account maintenance charges
- Late fees
- Paper statement fees
- Overdraft fees
Set reminders or review your budget daily if you have to, but don’t be late on your monthly bills.
If you pay your credit card bills late, you could be subject to late charges and penalty interest rates, which can keep you in debt longer. Your credit score will also be hit with every late payment.
It might be time to switch banks if you consistently use out-of-network ATMs or pay a monthly service fee.
17. Cut Spending on Entertainment
From a purely financial standpoint, entertainment costs can always be reduced. That doesn’t mean you have to give up staring at your walls. There are plenty of free and low-cost ways for you and your family to have fun.
Here are some entertainment options you can enjoy without spending much:
- Host potluck dinners instead of going out to dinner with friends
- Get outside and walk, hike, or ride your bike
- Visit your local library
- Stay home and have movie night or game night
- Explore a museum
- Take a stroll through a park
- Pack a lunch and have a picnic
Scan local websites and newspapers to find free and cheap things to do. There’s plenty of frugal fun to be had when you look for ways to cut your entertainment budget.
You might want to consider consistently using out-of-network ATMs or pay services, which are available now; cable isn’t the only game in town anymore.
Are you spending a lot of money on channels you don’t watch? Do you spend more time watching Netflix or another streaming service? If you can’t live without TV, consider YouTube or Sling TV and compare prices.
18. Lower Your Heating and Cooling Costs
Heating and cooling account for a large percentage of your utility bills. The U.S. Department of Energy states you can save 10% yearly on heating and cooling by turning your thermostat back 7 to 10 degrees for 8 hours daily.
During the cold months, you can set a lower temperature at work and a higher temperature at home. Do the opposite during the warmer months, and you can save money year-round. A programmable thermostat can do this automatically.
19. Save on Your Electricity Bills
The average monthly electric bill is $121.01, according to data compiled by the U.S. Energy Information Administration. Here are a few simple things you can do to lower your electricity bill.
- Switch to LED light bulbs.
- Turn off the lights when no one is in the room
- Use energy-efficient appliances
- Unplug electronics when not in use
- Use a clothesline or drying rack instead of your dryer
While you won’t be able to get your bill down to zero, you can apply the money you save to your savings yearly
20. Commit to a No-Spend Month
While there are plenty of things you could stop buying to save money, a no-spend challenge takes it a step further. A challenge is an aggressive savings plan that can put a large chunk of change in your pocket in 30 days.
With a 30-day no-spend challenge, the rules are simple. You only spend money on necessities like rent, food, utility bills, and other needs.
In one month, all the money you would’ve spent on entertainment, eating out, and other wants can go into your savings account. The experience is also educational.
Seeing that you can get by without all those things you thought you had to have might change your outlook on spending money. You might end up redefining needs and wants. You’ll find areas to cut back so you can prioritize saving.
If you think a no-spend month might be too difficult, there are more accessible and more fun money-saving challenges that will help you stay motivated, build good money habits, and build your savings account balance at the same time.
21. Do It Yourself
Things break. Living on a low income means you can’t afford to replace everything that needs fixing. However, learning how to DIY can often save you a lot of money.
My husband and I have completed many maintenance and repair jobs on our house, car, yard, and furniture. Necessity and a lack of funds motivated us to learn new skills.
Instead of paying someone for the work, learning to do minor repairs around the house is well worth your time. YouTube, websites, and blogs provide detailed tutorials and how-to videos. Just one repair you complete yourself could save you hundreds.
Some things are best left to professionals. For example, we don’t mess with electrical work. But the next time the toilet won’t stop running, or the walls need painting, we’ll probably handle that on our own.
22. Ask for a Raise at Work
You’ll get to a point where you can’t trim expenses any further. Getting a raise could be the fastest path to increasing your monthly income and savings. If your performance merits a pay increase, schedule a meeting with your manager, prepare your case, and ask.
If you get a salary bump, make sure you prioritize saving. Don’t start upgrading your lifestyle. You can budget as if nothing changed and put aside the amount of increase every payday.
23. Get a Second Job
Getting a raise isn’t always possible. Maybe you haven’t been in your current position very long, or your company’s profits are down. If a raise is not in your near-term future, you can increase your income by getting a second job.
You’ll have to sacrifice some of your free time and consider how working two jobs might affect your family, health, and primary job. But if you can balance two jobs and live off your primary source of income, you can save all the money from your part-time job.
24. Start a Side Hustle
Getting a second part-time job might not be a good fit. Schedules are sometimes tricky, and you might have to learn new skills. If you would instead work for yourself or need more flexibility, starting a side hustle can be a good option for earning more money.
With a side gig like driving for DoorDash, you can work when you want. You could leverage your existing skills and pick up freelance work on platforms like Upwork and Fiverr. If you have a hobby like photography or crafting, you can sell what you create online through stock photo sites or Etsy.
25. Sell Stuff You Don’t Need
If you have stuff in your home you don’t need or use, someone else might want it. You could have a yard sale or list unused things on platforms like Facebook Marketplace, Craigslist, or eBay.
My husband and I have sold appliances, power tools, sporting goods, and old electronics online and through our garage sales. I make money on Poshmark selling clothes I no longer wear. Getting rid of stuff you’re not using puts money in the bank and declutters your home.
26. Bank Your Extra Paychecks
If you get paid every two weeks, that’s 26 paychecks yearly. That means you will get three paychecks in two months during the year. If you budget your money based on two paychecks as you usually do, you can save one whole check twice a year.
27. Put Any Windfalls in Your Savings Account
If you’re fortunate enough to receive a sudden influx of cash, use it to pad your savings. A windfall could come from a tax refund, a bonus at work, an inheritance, or some other unexpected financial gain. Your first instinct might be to spend it on something you’ve wanted for a long time. Think about your financial goals before you spend the money impulsively.
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