People with low incomes often struggle to save money due to their limited resources. This is because they find it difficult to make ends meet, and the idea of saving can seem impossible. Nonetheless, no matter how small the salary may be, saving is an essential part of life. But if you are on a low income, there are still ways to maintain financial discipline and save money. Here are seven tips to save money:
1. Plan Your Expenses
Create a budget according to your income and expenses. Stick to your plan and be mindful of your spending. It is easy to live within any budget when you are organised and prioritise essential expenses like rent, tuition, groceries, and utilities.
Budgeting is one of the most effective ways to save money for the future, as it allows you to regulate your expenditures and avoid wasteful spending. By tracking your monthly expenses and setting a budget, you can see how much you’re saving and plan your savings further. This way, you can ensure that you’re allocating your money properly and monitoring it efficiently.
2. Open a Savings Account
Treating your dedicated savings as a bill can be a good solution for those who find it challenging to save. You can keep aside a set amount every time you receive your salary. Start with a small amount and eventually invest it in a savings plan with assured returns.
There are several different types of bank accounts you can open to stash your money and develop the habit of saving your income. These accounts come with different benefits and interest rates to help you hop on your journey to save money!
3. Pay Off All Debts
Prioritise eliminating your debt to free up your budget. This commitment can lead to an easier life, peace of mind, and room to save money. Once you clear off your debts, like loans and credit cards, you can put the money towards your financial goals and save more.
4. Limit Your Food Spending
Expenditures on food can put a lot of strain on a budget. The temptation to dine out can be hard to resist, making it difficult to adhere to a food allowance. Nonetheless, this is an area where you should focus when looking for how to economise on a low income.
One of the ideal approaches to dodge incidental food purchasing is through meal preparation. If you already know what to have for dinner, it is simpler to drive back home without going to your preferred take-out spot. Also, ensure that you aren’t overspending on groceries. Inspect your pantry to see if you can make some meals with what you already own. And when you go grocery shopping, ensure you have a list handy with the total budget so that you have the amount in front of your eyes, helping you save on overspending.
5. Lookout for Your Housing Expenses
Follow the 30% rule when it comes to housing expenses. According to the 30% rule, you shouldn’t spend more than 30% of your gross monthly income on housing costs. In this case, if your monthly salary is ₹25,000, your household expenses should not exceed ₹7,500.
To form a habit of saving, try to reduce your housing expenditure as much as possible by downsizing or adopting other cost-saving strategies.
6. Ditch the Unhealthy Habits
Regularly practising unhealthy habits like drinking and smoking is not only a bad influence on your health but also on your bank account. So, whether you earn a high or low income, it is best to stay away from them. Once you are done spending on these unnecessary obsessions, you’ll realise the amount you’ll save in a month!
7. Keep an Eye Out for Other Unnecessary Spending
Make sure you are keeping track of miscellaneous expenses that can be prevented like:
- Subscriptions to streaming services you don’t use anymore
- Expensive mobile internet plans – see whether you can replace your current expensive one with a more affordable plan
- Save more by limiting your monthly movie and restaurant outings
Although these are unimportant expenditures, it isn’t easy to let go of them. But once you form the habit and stay on track for some time, you will get habituated with the practice.
The Art of Managing Expenses is Difficult but Worth It!
Uncalled-for situations can rarely be avoided, but we can take measures to prepare for them. It is essential to assess possible situations and how to save money to cover them. Incorporating savings into your regular budget is a great way to get started, even with a limited income.
Assessing your current financial state and setting achievable savings goals is essential if you are serious about ensuring a secure future for yourself and your family. The above tips can help you to wisely manage your savings so that you can plan for investments and insurance to secure your future. By following these principles and staying mindful of your financial health, you can begin to save money for the future.
Author Bio:
Naina Rajgopalan has a thing for numbers and a deep fascination to learn about all things finance. She’s been money-wise from a young age and has always shared her knowledge and tips with those around her. Being a part of the content team at Freo Save, a neobank that offers a 7% interest rate on savings along with benefits such as insurance on balance, safe & secure banking, and so on, Naina stays updated with the latest of what happens in the banking and fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.