Across the country, the number of individuals living on paycheck after paycheck is growing every day. If you are living on a low-income, saving money might seem like quite a challenge. I always try to save money from towing services tasks and the first principle of saving money is paying yourself first. It sounds very hard to save on things like an emergency fund, retirement, cars, college fund or a dream house. Although it seems impossible, one can save a good amount of money even on a low income. The following six ways can help a low-income earner save money and achieve their dreams.
Make a budget
Making a budget is a good trick to track the amount you spend every month. Ensure you follow your budget to the latter to get great results. Prioritize your budget according to the essential expenses. The budget should include all your monthly income and expenditures. If you have any extra money after your monthly expenses, set the money aside for savings such as college fund or retirement. Having a plan of every dollar earned helps avoid wasting money in unplanned spending.
Cut out non-essentials
Cut out things are not very essential such as avoiding utility providers and avoid eating out. Start by purchasing your groceries and cooking your food. Try to cut out on entertainment and vacations if you cannot afford it. Use the money meant for such expenses in savings.
Minimize housing costs
Housing is a colossal expense, especially for low- income earners. Consider sharing an apartment with one or more roommates to cut down on cost. You can also move to a smaller room if you don’t need a lot of space. The money can be used as savings for an emergency fund or buying a car. If you already own a home, keep an eye on utility costs such as lights, water air conditioning among others. Maintain your house to avoided unnecessary costs such as repairs and upgrades.
Automate your savings
If you know it will be hard to set aside savings on your own, use the bank to set aside a certain fraction of your monthly income automatically. The savings will be automatically transferred to your savings account or investment account as soon as you’re paid. This relieves you the stress of budgeting your salary to cater for your savings.
Buy second-hand commodities
Consider buying and selling items at a local consignment shop or a thrift store. Thrift stores contain all basic commodities such as furniture, shoes, clothes and cooking utensils. You can also get old items or extra pieces from family or friends and save the money instead. Avoid buying too much furniture or classy and expensive furniture but rather buy the ones you can afford.
Avoid accumulating debts since they will increase not only your monthly payments but also delay your financial freedom. In case you must take a loan, ensure you pay it on time to avoid increased interests that may be difficult to pay.
Some other ways to help increase savings on a low-income include:
- Saving transport expenses through walking or using public transport instead of driving.
- Rent a movie and watch at home instead of going to a movie theater
- Make your coffee at home
- Get a side hustle job
The above tips can help you spend less on everyday activities and increase your monthly savings. It doesn’t matter the amount of income you earn, when used wisely, you can save a good sum of money.