When times are tough, you can start to feel that you desperately need to know how to save money fast on a low income. So these living on a low income tips could be just what you need if you’re feeling the money squeeze, as we show you just how to live on a budget and save money easily!
Show me how to save money fast on a low income
Firstly, be assured that it’s absolutely possible to live and even save money on a low income.
That said, it’s definitely not always easy.
If you’re in debt and are barely making it to the next paycheck, then even just thinking about saving money seems like an impossible dream.
Well, you’re not alone.
After all, did you know that almost 80% of US workers are living paycheck to paycheck?
That is a MASSIVE amount of people – which may very well include you.
That article also describes how around 25% of workers save nothing every month while 56% save $100 or less each month.
And an even scarier figure is that nearly 3 in 4 workers say they are in debt and half of this group think that they will owe debt for the rest of their lives.
Let’s be honest: these amounts are not great.
Owing debt – especially unsustainable debt where you can barely or can’t even make the repayments – is the number 1 reason that many people won’t be able to retire.
So not even being able to pay off your debt – let alone save anything for your build emergency fund plan?
Well, if that sounds like you, then it’s definitely something that you need to address as soon as possible.
So has anyone figured out how to live on a budget and save money on a low income?
Not only is it possible, but check out these examples of how to live on a budget and save money.
In fact, you can easily set yourself up for life even if your income is low!
Take Andrew Hallam, the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School.
Upon graduating from college, he had $12,000 in student loans (…weren’t the late 90s a magical time?) with a take home pay of $28,000 per year as a teacher.
Despite this, he managed to become a millionaire by age 36 and was “comfortably financially independent” by age 40.
He achieved this by doing a number of things you’ll find on this list as well as by investing his savings in low-cost index funds (which I do too!)
And there are a bunch of other great examples of people who’ve clearly figured out how to save money fast on a low income!
Like this social worker who, despite her low salary, managed to build her wealth to $1.4million.
How did she do it?
Easy. By living within her means and taking advantage of every single available discount.
(Spoiler alert: check out number 9 on the list below for how you can do the same thing!)
Or what about this parking attendant who earned $20,000 a year, but built an investment portfolio worth over $500,000.
His strategy was to have a budget and to do the only two things that are needed to be financially free: spend less than he earned and make his money work for him through the magic of compound interest.
And then there’s my favorite one of all.
When this gas station attendant passed away at the age of 92, it was discovered that he had amassed a fortune worth $8 million.
You can probably guess by now how he did it: by living frugally and investing what he saved.
There’s no magic trick to reaching financial freedom, whether you’re on a low income or you’re a CEO.
As these examples should show you, the same strategies need to be applied.
But while they’re simple, it’s true that they’re not necessarily easy – especially if times are a bit tough.
So now that you’ve seen that’s it’s entirely possible to do, the next step is to see exactly how to live on a budget and save money on a low income!
Living on a low income? Tips to live on a budget and save money
1. Create a budget (that actually works and that you’ll actually follow)
It’s the same advice you’ve probably heard again and again, but it’s worth repeating:
You can’t figure out how to live on a budget and save money unless you have a budget system in the first place.
Remember that article which said that 78% of workers are living paycheck to paycheck?
It also said that only 32% of the workers surveyed use a budget.
There’s no way of knowing if the same workers who are saving money or are able to pay off their debt are also the ones with a budget.
But I’d bet good money that there’s a fairly significant overlap between the two.
And if you find yourself struggling to make it to your next paycheck, then it’s critically important for you to have a budget to see where your money is going.
After all, there’s a reason why people say that having a budget for low income earners is the best thing you can do to start saving money
So to help you out, we’ve explained exactly how you can start a budget.
It works for everyone, even if you’re wondering how to make a budget on minimum wage!
And don’t worry, it’s absolutely not as hard as you may think at first (we particularly recommend using the budgeting tips in the 50/30/20 strategy to make it as simple as possible for you) and is easily one of the best things you can do for your finances.
You can even download a free budget template right here – it’s perfect as a low income budget planner!
By budgeting money each month according to a plan and then making sure it goes only to those types of expenses, you’ll quickly be able to see where adjustments have to be made to your spending habits.
Which is by far the best way for you to figure out how to save money fast on a low income!
2. Track your spending
It’s all very well and good to make a budget but it won’t help you save money if you don’t stick to it by making sure you’re tracking your spending.
After all, it’s only by tracking where your money is going can you see that, whoops, I should possibly cut back on those takeaway coffees every day and wow, I didn’t realise how much I was spending on takeout dinners each month!
My favorite, totally FREE tool for doing this that I always recommend to people is Personal Capital.
All you do is connect all your accounts (which includes your bank accounts, retirement accounts, credit cards etc.) and it gives you a great, easy-to-read breakdown of where all of your money’s going in and out.
Essentially, it shows you your entire financial situation, all in one place. Which then lets you see how to improve it!
Check out this page for more information or to sign up.
3. Cut back on your housing expenses
It’s great to save money on smaller purchases by using things like coupons, but when you’re trying to see how to save money fast on a low income, you need to focus on the big expenses first.
In fact, this can be key to any budgeting on low income strategy.
After all, these are the costs that are really eating into your paycheck each month.
And while it’s all well and good to save $10 on your groceries this week, that can come after you work to save, say, $50 on your rent.
I mean, you’d much rather save $200 per month than $40 per month, right?
If you rent
For most people, housing costs are the biggest part of their budget. This means that any way to cut back on these is going to save you a ton of money.
So if you’re currently renting, make sure that you actually need all the space you’re paying for or whether it would be better to move to a smaller place.
You could also see if there’s any possibility of moving further towards the outskirts of your city, where rent is usually cheaper.
Of course, you should balance this out against the financial effect that this will have on your commute to work – for example, if you move further out but you’ll spend the amount you’ve saved on your higher gas bill (not to mention time stuck in traffic), then it may be financially better to stay where you are.
If you own your home
Save on living costs
Americans have, on average, the second largest homes in the world – just after the Aussies and just before Canada.
This means that it’s more than likely that you’re living in more space than you need. And all that extra space costs money.
I don’t only mean the cost of actually buying your bigger house, although that’s certainly a major expense.
You also have to heat and cool it, buy furniture for the extra space, pay land tax and more.
So while selling one home and buying another does involve a range of fees, it’s definitely worth calculating to see if the reduced cost of living in a smaller home would be worth the costs involved in moving from your current place.
Rent out your extra space
Another option if moving is off the table is to rent out the extra space.
Either get a room mate or even try Airbnb, which can be a great way to make extra money without having someone there all the time.
(After all, did you know that Airbnb hosts make an average of $924 per month?)
Click here to find out more about becoming an Airbnb host.
(And if you want to try out Airbnb as a guest before signing up as a host, click here for a $35 bonus credit!)
Consider refinancing your mortgage
Many people avoid refinancing their mortgage as it sounds scary or too hard.
Luckily, neither of those things are true!
It can also save you tens of thousands of dollars over the life of your mortgage, so all that budgeting money going towards repayments would suddenly be free to go to your savings.
So take a look online at some of the refinancing options that may be available to you.
4. Focus on paying off your debt
If you’re trying to figure out how to save money fast on a low income and you have debt, then getting rid of this should absolutely be your priority.
And this is especially the case if you’re not making your minimum repayments, causing you to dig further and further into a black hole of debt that will become more and more difficult to escape from.
Of course, it’s not a surprise to hear that paying off debt can be hard.
But you may be more surprised to hear that it’s not complicated to do.
The Definitive Guide To Getting Out Of Debt will show you exactly what you have to do to get started at paying off your debt and how to successfully get rid of it.
This includes in which order you should be paying off your debts and how to chip away at all of them to save you as much money as possible.
Because if you’re looking how to save money fast on a low income but you’re still paying off debt, the only way you’ll be able to save more is by working to get to a point where your debt repayments are manageable – or, ideally, gone altogether.
At that point, all those debt repayments you’re making? They’ll suddenly become your savings.
And I know where I’d rather have my money go.
RELATED ARTICLE: WHY YOU SHOULD BE PAYING OFF CREDIT CARDS IN FULL (AND HOW TO DO IT)
5. Reduce repeated expenses (or have a robot do it for you!)
If you’re struggling to figure out how to save money fast on a low income but you also have a chunk of your money each month going to cable subscriptions or things like Netflix and more, then it’s time to take a good, hard look at your expenses.
This is especially the case if you’re struggling to make it to the next paycheck or can’t pay off your debt.
In those cases, those extra expenses have to go as they really add up over time.
A great app which can actually do this for you is Trim.
It looks at your recurring subscriptions and finds out just how you can cut back on them.
For example, it can renegotiate your internet and cable bills, find you better car insurance and more – all automatically.
And it’s totally free to try!
Another thing you should look at is, if you have a gym membership, whether you really need it.
There are a ton of great ways to exercise for free that could save you hundreds – if not thousands – of dollars on gym fees each year.
Which could make a massive difference in seeing how to live on a budget and save money.
6. Work on your money mindset
Half the battle in working on how to save money fast on a low income is getting your head in the game.
For example, have you ever found yourself buying something you probably can’t afford (and definitely don’t need) because “you deserve it”?
Or, worse: “there’s no way I’ll ever pay off my credit card so I’ll just use the money to grab those new shoes”?
And then there’s: “I’m going to be stuck in this crappy job forever so what’s the point of trying to improve things”.
I’m going to be a bit harsh here, so brace yourself…
You know what that sounds like to me?
Excuses for why you can’t increase your income or pay off your debt or start to save more because you keep spending your money on unnecessary stuff.
And if you keep thinking things like that, then you’re never going to improve your financial position.
Instead, you need to shift your thinking into a smart money mindset.
For example, if you find yourself buying things you don’t need with money you don’t have, try one of the tips from this article on 23 Tips and Tricks to Stop Spending Money Fast.
(My absolute favorite is number 4: for example, if you’re thinking of buying a new pair of $60 shoes and you earn $8 an hour, is it really worth working 7.5 hours for them?)
And if you relate more closely to the “I can’t pay off my credit card” or “I’m going to be stuck forever in this crappy job” situations, then making sure you’re in the right frame of mind will be doubly important.
It’s worth saying again: Digging yourself out of a financial hole is damn hard.
But if you don’t have the mindset to commit to doing this, even if you’re only able to chip away at a little bit of it each paycheck, then you’re never going to make it out.
Just look at the examples of the people mentioned earlier in this article who figured out how to manage money to the point that they were able to grow their wealth to astronomical amounts despite their low income levels.
If they could do it – which even included paying off debt in the process – then why can’t you?
RELATED ARTICLE: 21 MONEY AFFIRMATIONS TO TRANSFORM YOUR FINANCIAL MINDSET
7. Increase your income
If you’re looking into how to save money fast on a low income, then one way to do this is to reduce your expenses.
But another way is to increase your income so you have more money to put towards your savings.
Now, this is assuming that you’ve also tried (or are trying!) other ways to make more money – looking for a new job, trying to pick up more hours at work or talking to your boss about a pay rise.
At the same time, starting a side hustle can be a GREAT way to make some extra cash.
It’s often more flexible than your “real” job, you can make money off something that interests you – and, if all goes well, you can even build it up to replace your salary!
Check out some ideas on some side hustles you could look into trying:
- 11 WORK FROM HOME JOBS TO MAKE MONEY ONLINE
- HOW TO START A BLOG IN LESS THAN 15 MINUTES
- 23 OF THE BEST STAY AT HOME MOM JOBS
- HOW TO MAKE $100 A DAY: 30 CREATIVE WAYS TO MAKE MONEY FAST
8. Save money on your groceries
Did you know that the average American family spends 12.6% of its total budget on food?
This means that cutting back on spending in this area can have a massive effect on your overall budget.
There are a bunch of things I do to make sure my grocery expenses are as low as possible.
In fact, I even explained exactly how I saved $300 on groceries every month!
While I go into a bunch of ways to do it in that article, my favorite tips are to make sure that I always meal plan and only go to the supermarket with a shopping list.
That way, I’m sure that I’m only buying exactly what I need – no more, no less.
Which means no wasted food and no repeat shopping trips that week where I might be tempted to buy even more than I need!
I use this great printable meal planner and shopping list – download them for yourself and see how much you can save!
9. Make sure you’re getting money back on all your expenses
If you’re trying to figure out how to save money fast on a low income, then one of the best low income tips you’ll find is to make sure that you’re getting money back every time you do have to spend money.
Of course, if you’re really only living from paycheck to paycheck, then it’s critical that you cut your spending as much as possible.
But even when you’re pushing yourself to only buy the absolute basics (like cutting out these 17 things to stop buying to save thousands), you can still make money back on your shopping.
In particular, making sure you’re using cashback apps whenever you have to buy anything is a great way to make your money go further.
My absolute favorite for this is Ebates.
It’s one of the biggest free money earning sites in the world, having paid out over $800 million to its users, which it does by offering a certain percentage off any online purchase at thousands of stores.
All you have to do to get the cash back is to login to your account, select the store you want to shop at and you’ll be taken to the site immediately.
Once you’ve made your purchase, the amount of the discount is automatically credited to your Ebates account. And that’s it!
I’ve used it to make hundreds of dollars back on my online shopping so it’s definitely a great way to get some free money.
And make sure you sign up here to take advantage of the $10 signup bonus for some free money straight away (don’t forget to verify your email address to make sure you get that free money!)
RELATED ARTICLE: 12 EFFORTLESS WAYS TO MAKE MONEY WHILE SHOPPING
10. Consolidate or refinance your debts
We mentioned above about how important it is to work at cutting back your major expenses, to make sure you’re saving as much as possible.
So looking into debt consolidation can be a major part of this to reduce your repayments and the interest being charged as much as possible.
For example, refinancing or consolidating student loans can easily save you more than $10,000.
So if you’re here because you’re looking for living on a low income tips to find out how to live on a budget and save money but you’re also paying for student loans, then this can make a massive difference.
I really recommend LendKey for this. They’ve helped more than 68,000 customers save an average of $10,000 on their student loans.
And the best part is that it only takes a few minutes to see just what could be on offer for you!
Check out our in-depth review on Lendkey here for more information.
Credit card consolidation is also an option, but be careful with this.
It can be good to take advantage of 0% balance transfer offers or other deals, but make sure you’re well aware of how the terms change once the initial introductory period runs out.
You wouldn’t want to go to the trouble of transferring your credit card balance only to be hit with even worse repayment terms in 12 or 18 months.
It’s also worth considering whether you want to spend the time finding deals and transferring your balance when that time may be better spent doing something that actually goes towards paying off the debt.
That’s not to say that it shouldn’t be something you look into, especially if you’re trying to see how to save money fast on a low income!
But just make sure you’re aware of all the terms so that you know it’s the best deal for you.
11. Cut back on your cell phone expenses
Did you know that almost half of all cell phone users in the US spend $100 per month or more on their phones and another 13% pay at least $200 per month?
That’s between $1,200 to $2,400 per year on your phone.
So remember when we said that the real way to save serious money is to look at your major expenses? This is definitely one of them.
Don’t worry, I’m not going to suggest that you cancel your cell phone, unless you want to go live in a cave.
But it’s pretty likely that you’re over-spending on this – especially if you manage to find the money to pay for your phone but can’t find any money leftover to put into your savings.
The best deal I’ve found for making your cell phone as cheap as possible is with Republic Wireless.
You only pay for what you need and the prices are crazy low, starting at $15 per month for unlimited talk and text and then $5 per month for each GB of 4G data you use.
Find out more, including just how they can make it so cheap, here: HOW TO EASILY SAVE $1,000 ON YOUR CELL PHONE CONTRACT
12. Save absolutely anywhere you can
Perhaps you find yourself struggling with how to live on a budget and save money, but can’t see how to budget your money any more so that you can make further spending cuts.
Firstly, are you sure?
This is especially the case if you’re running out of money before your next paycheck arrives or you can’t payoff your debt.
In those situations, you absolutely have to take a serious look at your budget and either reduce your spending or increase your income.
Otherwise, you simply won’t be able to fix your financial situation.
Of course, this can be easier said than done. But maybe all you need is some more ideas on how to save!
If this sounds like you, then why not take a look at these 250 money saving tips.
It’s our ultimate guide on how to how to save money fast on a low income and will show you exactly how you can make further spending cuts in all areas of your life.
You obviously won’t be able to implement all of them.
But even if you see a few that you think could be used to make some positive changes to your budget saving process, then you could already save yourself hundreds of dollars – if not thousands!
13. Take advantage of free money offers
As mentioned earlier, there are only two ways to save money on a low income if you’re struggling to live off your paycheck: cut your spending or increase your income.
But don’t think that this income can only come from working.
In fact, there are literally tens of thousands of dollars available – for absolutely free!
And to prove it, we’ve compiled these 33 incredible ways to get free money that you’ve almost certainly never thought of.
Most of them won’t make you rich. But they’re great for getting you extra cash for free from almost no effort at all.
And if that can help reduce your financial stress even a little bit this month, then it’s absolutely worth taking a look to see which of them may be available for you.
Which of these tips for how to save money fast on a low income are you going to do?
By now, you should have seen that even if you’re on a low income, there are definitely a range of different ways for you to get your finances under control.
It won’t always be easy. But this doesn’t mean that it’s impossible.
And who knows – just like our parking attendant and gas station attendant friends, the work you do now to figure out how to live on a budget and save money could lead to you becoming the millionaire that someone else talks about in their very own article!