When you’re living on a small income, it can be especially hard to save money for things like an emergency fund, college, retirement, cars, or anything else. We all have our lean times financially, but even in those lean times you can still find ways to save money for the future needs of you and your family, such as college and retirement. I truly believe that even if you have a low income, you can still save money if you’re diligent about the process.
1. Evaluate Housing Costs: Many times it’s difficult to save money because housing costs take a huge chunk of the family budget. In general, it’s best to keep housing costs to 25% of your take home pay or less. If you’re single, you can even take in a roommate or two and charge them rent to save money on housing costs. And the saved money you can put straight into investments.
2. Plan Your Shopping: Never spend money on a whim or just because you ‘feel like it.’ The best way to spend a limited income is to plan your shopping ahead of time using a written budget every single month. That way, you spend your money on paper before you spend it in real life. When it comes time to buy what you need, you will already have a plan in place and you won’t overspend because you only have so much allotted for each category.
3. Buy Used Stuff: Buy everything you can used, such as used cars, used electronics, used furniture, clothing, etc. There are incredible deals out there for most anything you want or need, you just have to know where to look.
4. Don’t Use Credit Cards: Studies have shown that you spend 12% more on average because using plastic is such a smooth and friction less way to spend money. Your best bet is to go cash only and use cash in an envelope system along with your monthly budget.
5. Sweat The Small Stuff: Take your lunch to work, plan to do your errands all at once to save gas instead of making multiple trips. Save your change and cash it into an investment account periodically. You will be surprised how much you can save when you get creative.
6. Find a Side Gig: There has never been a better time in history to find ways to make extra money. Find a part time job, a work from home project, a weekend job…anything to earn more.
7. Stay Out of Restaurants: Restaurant food costs at least 4x more than a homemade meal would cost. That multiple goes even higher at more expensive restaurants. If you want to save money and still have a nice meal with friends, host a potluck at your house and have everyone bring a dish. You’ll have just as much fun for a fraction of the cost.
8. Use Coupons: Using coupons to buy groceries and necessities can save you a large amount of money, especially if you know where to find the best coupons. You can save even more by going to stores that double your coupons, as well as using that store’s discount card along with the coupons. You can do a Google search to find coupons on your favorite products.