How to Save Money Fast on a Low Income - The Practical Checklist

Learning how to save money fast on a low income can initially seem overwhelming, but remember that living paycheck-to-paycheck doesn't mean you're unable to save. With the right steps, you can learn the best ways to budget and save money, no matter how low your income.

How to Save Money on a Low Income: 10 Ways

1. Create a Budget

No matter how much or how little money you make, a budget is a necessity. Think of it like a map for your money. You don't know how to get somewhere without reading your map; the same is true of your money. It doesn't know where to go without direction. A budget can help you understand your fixed and variable expenses, enabling you to understand how much money you have for spending versus what you must save for priorities.

2. Track your Spending

It's not enough to set up a budget. You must also track your spending habits. Think of it as your accountability. You can say you want to save money all you want, but without any action, it doesn't happen. When you track your spending, you see where your money goes. It may also help you make more informed decisions before you impulsively spend money.

3. Find Areas to Cut Back

It's easy to spend money, but not as easy to cut back. Using your budget and spending tracker, you can see where you might be able to spend less money. Everyone has different areas they overspend, but here are some common areas to consider:

• Impulse purchases: If you shop often and don't use a list, you may buy items that aren't in your budget. Set a goal to only buy what you budget for and see how much money you save.
• Eating out: Keep track of how many days a week you eat out, including coffee shop stops, and see if you can cut back. If you buy lunch at work, start bringing lunch from home, and if you run through the drive-thru for dinner, try meal planning so you don't have to eat out.
• Unnecessary subscriptions: Comb through your subscriptions to see what you can eliminate. You may be paying for some that you don't even use.

4. Take Advantage of Deals

We all have to spend money at some point, but that doesn't mean you should overspend. Take a few minutes before purchasing and look for promo codes, coupons, or other savings methods especially during holiday season. For example, compare your local grocery stores to see who offers the best prices. Many offer better deals if you shop through the app and pick up your items curbside. This also eliminates the risk of impulse purchases and keeps you more accountable when shopping because you can see your running total in the cart.

5. Make Savings Automatic

Don't leave saving money to chance. Instead, make savings automatic by setting up direct deposits into your savings account. You can do this right from your paycheck, or if you don't get direct deposit, you can also direct your bank to set up automatic transfers. This way, you always save and don't risk spending money before you have the chance to save.

6. Avoid Becoming House-Poor

One of the fastest ways to get in over your head is to buy more house than you can afford. This situation, often called 'house-poor,' means that most of your income is tied up in housing costs, leaving you little to save or spend on other necessities. Even if the mortgage payment feels affordable, you must consider all aspects of owning a house, including real estate taxes, utilities, insurance, upkeep, and repairs. Ideally, your housing costs shouldn't take up more than 30% of your income, or it will become challenging to save money.

7. Eliminate Debt

Debt is one of the largest reasons it becomes hard to learn how to save money with a low income. High interest rates quickly diminish the amount of money you can save, forcing you to pay credit card companies and banks for the funds instead. The faster you get out of debt (and stay out), the easier it becomes to save money.

8. Avoid Late Payment Fees

Like interest, late payment fees are a nuisance that makes saving money on a low income hard. When every dollar matters, the last thing you want to do is pay a bill late and owe the bank a fee. These fees add up quickly, and if you don't pay them immediately, they can accrue interest, putting you even further into debt. To avoid late payment fees, set up your bills on auto payment so you always know your bills are paid on time.

9. Make Different Lifestyle Choices

Your lifestyle plays an integral role in your ability to save money on a low income. While it's important to prioritize your spending, finding ways to have fun for free or to share costs with friends is also important. When you feel accomplished, you may be more motivated to save.

10. Be Patient

Most importantly, remember that learning how to budget money on a low income is a journey that requires patience. It's okay to have some hiccups along the way. Remember to be kind to yourself, learn from your mistakes, and make better choices moving forward. With time and patience, you can master the art of saving money.

Final Thoughts

The most important step is admitting you need help learning how to save money on a low income. You can then take the steps necessary to ensure you save money by budgeting, cutting back on unnecessary expenses, getting out of debt, and automating as much of your finances as possible. When implementing these important steps, consider an app like Spendings.IO to help you reach your financial goals.