Saving money when you have a low income starts with the proper mindset. With the right planning and attention to detail, it is absolutely possible to make progress toward savings goals.
Check out the following steps to start saving no matter what your income may be:
If you don’t know how much money you have or how much you need to pay bills, you won’t know how much you have to save each month. Creating a budget and sticking with it will give you a place to start when it comes to determining how much you have left over after expenses to save.
Make sure to include all the big expenses — like rent, utilities, food, gas, and car payment — and allot funds for categories like household needs, clothing, entertainment, and a bit of a buffer in case of an emergency. Look at your credit card and bank statements to see how much you tend to spend on average, and estimate how much you’ll need each month. Then, write down every dollar that you spend throughout the month to keep track and hold back if you’re overspending in any categories.
Trying to save by hiding cash at home is one of the quickest ways to lose it or spend it on a whim. Current offers Savings Pods for account holders that pays 4% in interest, far more than the average savings account.
This way, you put your saved funds out of sight so that you’re not tempted to spend them. And you can earn more money while your funds remain available in the event of an emergency or for whenever you decide to access it.
Now that you have your budget mapped out, you know how much you’re spending and on what each month, and you have a safe place to put your savings, it’s time for the hard part — cutting expenses.
Do you need subscriptions to five different streaming services? Do you get razors every month in the mail or items from Amazon Subscribe & Save that you don’t really need? Take notice of all the monthly bills that are automatically charged to your accounts and cut all the ones that are not absolutely necessary.
When planning a budget, it is normal to write out the rent payment or mortgage and car payment as if they are unavoidable and must be paid. The truth is, however, that everything is up for negotiation when you are trying to save money, especially if you have an important goal to save for.
When it comes to your rent or mortgage, there are multiple options. You may choose to downsize or move to a less expensive neighborhood, move in with a friend, or take on a roommate who will pay you rent.
If you are making a car payment, especially if it’s a large one, it is a good idea to sell the car and buy a less expensive one, take public transportation if possible, and/or buy a bike to get around. If you can get by for six months to a year by riding a bike or using public transportation with the occasional car share ride when you need it, you will likely end up with a big chunk of money in hand to jumpstart your savings.
Food costs are one of your biggest variable expenses each month, which means it’s the first place to start when you begin looking for more money to save on a low income. If you spend a lot of money on eating out or buying prepackaged meals you could save $100 to $500 in this category alone.
Here are some ways to save on food expenses:
If you are paying for water, gas, and electricity, it’s time to make a few small changes that will add up to savings in your budget and more money in your Savings Pod. You can do the following:
Every so often, make a commitment to avoid buying anything new for a month. You will need to buy food, pay bills, and replace items you need like shampoo or socks, but your commitment will mean not buying new books, clothes, household items, streaming services, online movies, sports gear, and other items. Instead, focus on repairing and maintaining what you have, finding an alternative solution, and connecting with groups that focus on giving away free items and not selling things.
Instead of shopping, you’ll spend more time decluttering and selling your old stuff that you don’t want, cooking meals from scratch, and making gifts to give to others. In the process, you’ll stack up your savings.
Many financial institutions offer incentives for moving your money to their organization. For example, when you open a Current account and choose direct deposit for your paycheck, you get access to your paycheck two days early every time. The sooner you have the money in hand, the quicker you can pay interest-bearing bills or put it into a Savings Pod so it can earn for you.
Additionally, you have the ability to earn points when you make purchases using the card attached to your Current account. Not only does this mean that you will avoid running up debt on a credit card when paying your bills, but you’ll get points that add up and be redeemed for cash back in your account. Some merchants pay 15x points for purchases so those rewards can add up quickly.
Another nice bonus is that Current reimburses you for all fees paid for using the card at ATMs. Most banks will charge you to use any ATM that is not theirs. All of this means more money at your disposal to pay bills and save.
For every monthly bill you have decided to keep, schedule your monthly payments to be paid automatically via credit card or pulled from your bank account. Late fees are expensive and added interest can really cut into your savings when you have a low income.
Be sure that you are only connecting reputable companies with your bank account to avoid fraud. Know that if you cancel a subscription and the company keeps charging your credit card, you can dispute the charge and get your money back.
Though your goal is savings, it is worth it to take a look at how much you are spending each month on debt as well as the money that is slipping away in interest and fees.
Look at how much room you would have in your budget if you no longer had to worry about paying off a credit card, a school loan, a personal loan, your car, or a loan to a family member or friend. It can make a lot of sense to focus on paying off some debts after you put together a savings fund for emergencies, so you have more breathing room in your budget and more cash at the end of the month to save.
Remember to do the following:
If you like your job despite the low income or are having a hard time finding a higher paying job, consider joining the gig economy. There are lots of ways to earn money on the side to help you move more quickly toward your savings goals, including these options:
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With a tight budget in place, you should be able to allocate a minimum amount to savings every month, knowing that you will have enough to pay your other bills. Put this amount into your savings as one of the first “bills” you pay so you make sure it gets done.
At the end of the month, you should have extra money that you made through gig work, unexpected income or overtime, and savings on things like food and utilities. Make a payment to yourself for whatever is left, so you are not tempted to spend it.
You can accomplish multiple items on this list by opening up an account with Current. Check out the app and set up your account within minutes, so you can start taking advantage of all the benefits that will help you to jumpstart your savings.
References
Budget Byte$.
Cheap Recipe Blog.
10 Ways to Save on Utilities. (April ). USA Today.
The Ultimate Guide to Buying Nothing New for a Year. (October ). Forbes.
Facing Financial Hardship? 14 Ways to Save Money. (April ). Forbes.
How the Debt Snowball Method Works. (April ). Ramsey Solutions.
Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC.
On a perfect grocery shopping trip, you have the entire store to yourself, your favorite organic and healthy foods are on sale and the music playing overhead is forgettable enough that it won’t be stuck in your head for the next 24 hours. Of course, this perfect grocery trip rarely happens. But with just a few simple actions, scoring savings on almost every food shopping trip can become a guarantee. Try these tips to see a difference in your grocery bill—all while eating healthy and getting your favorite foods, too.
Two words: meal prep. Plan your meals for the week ahead so that you’re not buying food you won't use or scrambling by Wednesday and running back to the store. You’ll be less likely to dine out in a pinch—eating at a restaurant or getting takeout is much more expensive than cooking at home.
Creating an overall vision for your week goes beyond prepping meals. It requires intuitive eating and thinking about the week as a whole—right down to even buying the creme-filled chocolate cookies you know you want. After all, eating healthy is all about balance.
To make a meal prep plan, ask yourself the following:
That last question is almost a bonus way to save on groceries. Often recipes will call for ingredients that you truly don’t need. For example, if a recipe calls for a teaspoon of white pepper, use the black pepper that’s on your counter instead. Substituting meat with a different source of protein (think tofu or chickpeas) is also a great money saver.
When looking at prices, don’t let the “99 cents” fool you. It sounds so simple, but it’s a marketing trick that has gotten all of us at some point or another. If the pack of strawberries is $4.99, count it as $5.00 when keeping a mental tab of what your bill might look like.
On top of rounding, it’s also good to understand unit pricing when reading labels. Those crisp-looking green grapes might seem on sale for $3.99, but a closer look might show that they actually cost $3.99 per pound. Always check if prices are per pound or per each item before putting something in your cart.
Grocery stores are really good at labeling what’s on sale. It’s easy to do a quick scan and see what’s cheap (and what’s not). You might be drawn to that $4.99 pack of strawberries, but getting another type of fruit that’s on sale (or even just cheaper) is a solid and affordable alternative.
Similarly, if you see something on sale that you’re running low on or that you know you’ll use in the future, it’s a good idea to take advantage of the deals. But doing this every time there’s a sale is more bucks than bang, so practice this within reason. Also, even if it's on sale, make sure you're not stocking up on food you won't use or will expire.
Chopping up broccoli or cauliflower and watching the tiny granules get stuck in weird places is as much a pain as it is bizarre. But if you can stand discovering a small floret in your shoe two days later, it’s worth it. Doing your own prep work (like peeling carrots or cutting up fruit) usually costs less than buying it already prepped. But, of course, time is also important. If doing more prep work leaves you feeling stressed, it might be worth it to spend the extra money.
Sometimes, you just need to go to a store where the bulk toilet paper is found right next to 30-lb bags of dog food and a bunch of computers for sale. Taking a separate trip every now and then to stores that sell in bulk can save you money on essentials like TP, paper towels, canned goods, vitamins and more. Remember, only get what you'll use and stick to what's on your list.
We’ve all done the thing where we’ve guiltily tossed a bag of carrot sticks in our cart because it had been days since our bodies last came into contact with a vegetable. No shame. But if you’re not actually going to eat the carrots, they’re going to go to waste, and you’ll end up losing money.
American households lose countless dollars each year to wasted food. While eating a well-balanced diet is important, wasting food is like throwing money down the drain. When you plan ahead and meal prep, you can incorporate healthy foods into your diet that you know will actually go to use—not to mention, you’ll save on daily expenses in the process.
No need to bust out the scissors and the Sunday paper—there’s a couponing app for that. Many chain grocery stores have apps where you can track rewards points and access extra savings. Otherwise, run a quick online search for coupons and find tons of sites and resources at your disposal.
It doesn’t take a ton of work to save money on groceries. You can get healthy foods, your favorite foods and even organic foods without breaking the bank. Going to the grocery store might still be stressful at times, but with these money saving tips, at least you’ll get to walk away triumphant. Best of all, you won’t even have to rely on $0.99 cups of petrified noodles to do so.
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