Are you short on income and high on ambitions? Please join the club and grab a napkin because the path to financial freedom is clad with prickly thorns.
So, if you are ready to control your finances and start saving, keep reading on how to save money fast on a low income! With the ever-increasing inflation, saving even a dime seems like a sweat-inducing core.
Whether you aspire to buy a new car or save for retirement, you naturally hold onto each penny.
But if you haven’t yet witnessed significant savings growth or are left wondering, you are doing something wrong. Now, you must cut down on your expensive hobbies and follow these 11 strategies to save money without much effort!
1. How to Save Money Fast on a Low-Income?
Follow the below steps to save your money fast and easily
1.1. Create a Monthly and Yearly Budget Plan
Strategizing is the stepping stone to financial freedom; you don’t need expensive calendars and planners to jot down your budget plan. Simply power up your laptop, open a blank Excel sheet, and begin jotting down the following:
- Income streams.
- List of your monthly expenses (on both the necessary equipment and luxurious goods).
- List of your yearly expenses (for instance, yearly subscriptions)
- Monthly saving goals.
- Yearly milestones.
By creating a list of expenses and expectations, you can proceed with a clear vision. You can spot the loopholes in your finance management tactics and improve yourself.
Print this sheet and attach it to your pinboard to stay focused. This will help you eliminate the urge to spend more on unnecessary items and save for your monthly and yearly objectives.
1.2. Avoid Get Rich Quick Schemes
I understand you’re short on income and want to witness effective results, but unfortunately, it isn’t possible overnight. Avoid any website, advertisement or application that lures you towards a scam.
These fraudsters entice people with the promise of quick bucks and end up swallowing their hard-earned money.
Think twice before transferring money to any unauthorized source, even if it is recommended by a few people online. Beware that they are either paid to promote the scammer or these are fake accounts created by the fraudster.
Check for reviews, but consider investing online only if the website holds a stable reputation. You will not only be able to eschew the ethical quandaries that accompany these schemes but also protect yourself from becoming a cybercrime victim.
1.3. Lock Away Your Credit Card
While we are on the subject of enticing offers, why not discuss the credit card dilemma? It might seem convenient to purchase a product on EMI, loan, or through a credit card, but resisting temptation is a pivotal step in building assets.
Opulence might be the end goal, but stay cautious while spending on sumptuous items. Cashing in your credit card might seem alluring, but it will soon lead you into the web of debt, and eventually, what little savings you have accumulated will be drained.
1.4. Avoid Debt Accumulation
It doesn’t matter if you’re acquiring a loan to purchase a car or some stocks; you should avoid it like a plague. Debt is a labyrinth of charismatic offers and is nearly impossible to solve.
Here are two ways you could utilize to avoid debt accumulation.
1.4.1. Be Mindful of Your Expenses
Walk towards your pinboard, power up your laptop, and study your monthly plan often. If you struggle with overspending, try creating a weekly budget to determine your priorities. Keep a close eye on the commodities you spend the most on.
Do you often wander towards a cafe and order a quick takeaway? Or do you spend more on private travel? Try listing the answers to these questions as honestly as you can, and keep studying your habits often to gauge your progress.
Being mindful of your expense pattern will help you sort your budget and saving techniques. You will be able to manifest a strategic plan and cut down on any and every penny you waste daily.
1.4.2. Resist the Temptation
If possible, set aside a small sum and chunks of money for your daily requirements as soon as you receive your stipend.
You will be operating the rest of the month on a limited budget and will be able to resist any temptation. It is a proven fact that we tend to avoid enticement if we don’t have the means to fulfil it.
Most people have been deploying this method for the past year, saving thousands of dollars without much effort. Create a planner, stick by it, and distribute your money in chunks as soon as you receive it.
1.5. Switch Your Bank
Have you ever wondered about the additional taxes you pay yearly to the government and the bank? But more importantly, have you ever considered the charges your bank imposes just for having an account? If you haven’t, this is a significant question for you to ponder.
Most renowned financial institutions tend to deploy additional charges, and the account holders generally ignore them. If you, too, happen to be one of those, it is time you consider switching to a low-cost bank.
You could save a couple hundred dollars and utilize that money for your yearly goals. Or maybe you can invest it and generate a passive income.
1.6. Begin Investing Low Amounts In Profitable Assets
Most of the finance analysts and experts out there suggest investing in valuable stocks. However, they refrain from addressing a crucial aspect.
You should never invest bulk money in any asset, no matter how enticing the return rates might sound. Consider the ROI (Return on Investment) before pulling the bills from your bank–or cache stack.
Moreover, be mindful of the assets you are investing in. The stock market might not be for everybody; consider investing in these alternatives instead:
These options are fairly expensive but generate a passive, high-paying income. You can easily rent three of these alternatives and diversify your income stream.
1.7. Cut Down On Unnecessary Spending
A study by The Motley Fool claims that nearly 60% of Americans tend to engage in unhealthy spending habits and struggle accumulating lifelong savings.
The primary cause behind an empty savings account is your habit of overspending unnecessarily. You might be spending excessively on anything from an expensive dinner to an outfit you could do without.
Here are a few tips for you to utilize and reduce unnecessary expenditures.
1.7.1. Avoid Scrolling Social Media
It might sound blasphemous, but you need to stop scrolling social media. Or at least unfollow the accounts that lure you towards products harmful to your financial status.
You might have observed that social media has become the holy grail for affiliate marketing, where almost every influencer promotes a product and makes it irresistible.
If you succeed in parting with such accounts, you can secure your funds effortlessly. As a result, you can save more with your current salary package.
1.7.2. Unsubscribe To Enticing Email Letters
A potential trap after social media is a newsletter that knocks on your email daily and tempts you with discount offers. Almost every brand has a curated newsletter to tempt customers to buy its products.
You might not have intentionally subscribed to such email letters, or your favourite creator might have switched to overly promoting unnecessary products, but you must stop receiving them.
Remember, the goal is to block temptation, not isolate yourself. Allow yourself some time for recreational habits, but do not engage in overtly unhealthy habits.
These newsletters and social media accounts might also help you garner something valuable. It is your responsibility to be mindful of the products you invest in.
1.7.3. Refrain From Stocking Your Relatives
Again, it is a sinful thought but a proven fact. You might unfollow unproductive channels and avoid temptation incurred by social media, but that’s not the only source of it.
A billboard, a template, and a relative are all a source of inclination and a red flag you must resist. You might cut down on social media, but you cannot avoid hearing about a relative treating himself/herself to a luxurious vacation abroad or purchasing an extravagant commodity.
This is where you need to focus on your planner and your long-term goals and refrain from stocking your relatives. The more you focus on somebody else’s life, the more you waste the time you could focus on yourself and your goals.
1.7.4. Make Do With The Free Version
We all fall trapped to the “pro” version offered by several–or shall I say every?–platforms and end up shelling out a few dollars monthly.
I understand that the features offered by the upgraded version are better, but is watching a few ads too expensive? Certainly not. You don’t need the upgraded version of every software and platform. Similarly, you don’t need every other program out there.
Make do with the necessary platforms and the free versions they offer unless an upgraded model is truly in your best interest. Sometimes, we have to purchase licenses for software and platforms, but you need to be mindful of every penny you hoard.
2. Ways to Overcome Low Income
Below we suggest you few ways to convert your low income into high income
2.1. Upskill Yourself
While it is obvious you are seeking the answer to “How to save money fast on a low income”, you should consider transforming the last two words of the question.
Though it is always beneficial to save money, you would have to push your boundaries and increase your income in this competitive job domain. You can’t forever work for a few hundred dollars and expect a secure future.
The easiest way to eliminate your low income is by upskilling yourself and diversifying your income (more on later).
You could grab a free online course or attend a seminar to broaden your skill set and get a better-paying job.
The more skills you acquire, the higher your chance of financial freedom. Invest your time–and even a few dollars–to expand your domain knowledge to qualify for a promotion and diversify your income.
2.2. Get A Side Hustle
The most practical way of increasing your savings is by increasing your income. By investing in yourself and acquiring additional skills, you could easily establish a side hustle and start generating passive income.
It could be any skill from affiliate marketing to cryptocurrency you could pursue in your spare time. Try freelancing or generate passive income to supplement your lifestyle and achieve financial freedom. You could even build a freelance career by pursuing your passion and eliminating your low-income job.
While it is essential to have an emergency fund, remember that saving each penny isn’t the only way to escalate your capital. Sometimes, you need to invest in yourself to witness prominent changes in your current lifestyle.
Until you build your dream career and transform your “low income” into a stream of dollars, follow these steps and cut down on unnecessary expenses.