If you are on a low income, saving money while trying to make-ends-meet may seem challenging, if not impossible. That is why this article aims to investigate potential strategies for saving some cash even when your income is lower than you’d like.
Read on to discover our best money-saving tips for people on low incomes.
Get a Plan
When we talk about plans for saving money, of course, we are referring to a budget. Budgeting often suffers a bad reputation. Many people see budgets as something that is a lot of effort, they take time, and they are confusing. Maybe to all of that, however, budgeting is essential to get a clear assessment of where you stand with your cash, where it is leaking, and the amount you might be able to save.
Until you understand your money situation by creating a budget, you will not be able to set any realistic savings goals.
One of the main restrictions to low-income earners saving any money regularly is that they believe they cannot save until they get more money. Even if you can only put away £5 per week, it is a start, and you will get into the saving habit. Regardless of how small the sum is, pick a definite figure as your saving goal and stick to it.
Keep Your Mind on What You Are Spending
Cutting down on your most significant expenditure should be your priority when it comes to saving on a low income. The excellent work you’ve done on your budget now needs to go into trimming down your excess spending.
One of the most significant pressures on a budget is spending on food. Treats, eating out, pre-prepared meals all lead to well-planned budgets becoming bust. It is no wonder – UK citizens love to spend money on food. One Office of National Statistics study concluded that UK households, on average, spend more than £1,600 a year on dining out.
You might not dine out or eat takeaway food, but there are other ways to cut back on your food spending. For instance, find creative recipes for the food and ingredients already sitting in your cupboard. You’ll be amazed at what you can produce.
The same principle applies to the money you spend on entertainment. Rather than a night out at the movies, host a movie night of your own. Look for low-cost or no-cost alternative pastimes that you don’t have to pay to do.
Being mindful about your spending like this will go a long way to help you save even when you are on a low income.
Supplement Your Income
If you’ve done your budgeting exercise, and you really can’t find any spare money to save, maybe it is the time to find some other income. Other income doesn’t necessarily mean getting another job, or even a pay rise. There are different ways to supplement your income.
One of the most straightforward methods of getting some extra cash to save is by selling some of your personal belongings. Clothes that have been sitting around in your wardrobe for months, or tools that gather more dust than they produce, are probably going to be of more benefit if liquidised into cash. There are plenty of places to sell your stuff, online or locally.
You could also consider using some of your spare time to generate some additional cash from a side income activity. There are many places to make side incomes on the internet, or you can find opportunities locally by dog-walking or doing odd-jobs around the neighbourhood.
Remember, any extra cash you get is for savings, so even the occasional £10 or £20 will help improve the amount you can save each month.
Clear Your Debts and Stay In the Black
Saving money when you have debt and low income is going to hold back your savings plans. So, your priority has got to be clearing your debts. Once that is done, you can concentrate on saving.
If you feel that your debt is becoming too much for you to meet payment deadlines, give your lender a call and discuss your options. You might be able to negotiate new interest rates or a reduction in your minimum payments. Have an idea of what you want before you call them. Also, be sure to call your lender before you start missing payments and incur additional charges.
If you have the opportunity, consider transferring your debt to a zero-interest credit card. Once you’ve transferred it, try to clear your debt during the interest-free period.
Make Your Saving Automatic
Having worked out the amount you want to save each month, set up an automatic transfer from your main bank account into a savings account. The advantages of doing this are twofold. First, it means that you won’t forget to transfer the money. Secondly, you will not miss the money if it goes out automatically – out of sight, out of mind!
Saving just a little every month is a fantastic financial habit to get into if you are on a low income. Setting up your budget and establishing modest savings goals are your first steps.
Remaining mindful about your spending, supplementing your income, and clearing your debts will help you meet your monthly savings goals. So, you don’t forget or get tempted to skip your monthly savings goals, make it automatic.
With these tips, we wish you success with your saving and hope it builds to larger savings goals.