Last Updated on January 21, 2025 by Katie
If you’re looking for a guide on how to save money on a low income, you’re in the right place!
For many individuals facing the challenges of a low income, the thought of saving money might seem daunting. Yet, achieving financial stability and growth is entirely possible with the right strategies and mindset.
You don’t need to earn a high salary to start saving effectively – you just need to adopt practical and simple saving techniques which we will talk about today.
A well-planned approach to managing expenses, and creating new income streams, along with developing a habit of saving, can transform your financial health over time.
I spent years on a low income in my 20s, never seeming to be able to keep my bank account in the plus and saving was out of the question!
So, I know how tough it can be to start developing a positive money mindset.
But, over the years I’ve managed to turn things around and if I can do it – you can do it!
Let’s get started.
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How to Save Money On a Low Income: 21 Simple and Practical Ways
Now, we will take a look at how to save money on a low income, even as a beginnner.
Remember that you can try out more than one method to build your savings in multiple different ways.
1: Track Expenses
Tracking your expenses is crucial for saving money, especially with a low income.
It helps you identify where your money is going and where you can make cuts.
By gaining clarity on your spending habits, you’ll be better positioned to make informed financial decisions.
To set up expense tracking, consider the following steps:
- List all monthly expenses and categorize them (e.g., groceries, utilities).
- Use a spreadsheet or a budgeting app to record daily spending.
- Review your expenses weekly to spot patterns that need adjustment.
Thrifty tip: Automate your expense tracking by linking your bank account to budgeting apps for real-time updates.
2: Create a Budget
Creating a budget is a vital step when learning how to save money on a lo income.
It helps you track where your money is going and ensures that you’re prioritizing essentials.
With a budget, you gain better control over your finances and can stretch your paycheck further.
Follow these basic steps to create a budget:
- List all sources of income.
- Record all your expenses, including fixed and variable costs.
- Prioritize necessities like housing, utilities, and food.
- Allocate remaining funds to savings and discretionary spending.
- Review and adjust monthly as needed.
Utilize online tools like You Need a Budget (YNAB) to make budgeting simpler and more efficient.
Thrifty tip: Use cash envelopes for categories prone to overspending, ensuring you don’t exceed your limits.
3: Use Cashback Apps
Cashback apps can boost your savings by offering a small percentage back on purchases, which adds up over time.
They are especially beneficial for those on a low income since they provide extra money for everyday expenses without much effort.
To set up cashback apps:
- Download popular apps like Rakuten or Ibotta.
- Create an account and link your preferred payment method.
- Start shopping through the app or upload your receipts.
Thrifty tip: Regularly check for special offers and promotions within the app to maximize your cashback earnings.
4: Buy Generic Brands
Buying generic or store-brand products can significantly reduce your shopping expenses and help you to save money.
These alternatives often offer the same quality as name brands but at a fraction of the cost, making them an excellent option if you’re on a tight budget.
You can find generic options for a wide range of products, including food, medicines, and household items.
When choosing generic brands, make sure to compare the ingredients or components to ensure you’re getting the same benefits as their branded counterparts.
This method works especially well for medications and pantry staples.
Thrifty tip: Store loyalty programs sometimes offer additional discounts on their own brand products, so make sure to sign up and take advantage of those deals.
5: Cook at Home
Cooking at home is an effective way to save money when you don’t earn high wage.
It allows you to control ingredients and portion sizes, reducing waste and costs. You’ll find this especially helpful as dining out or ordering takeout can quickly become expensive.
Create weekly meal plans to avoid impulse purchases and stick to a budget and utilize simple recipes with affordable ingredients like beans, rice, and seasonal produce.
Shop sales and buy in bulk to get the best deals on staples.
Thrifty tip: Set aside time to prep meals in advance, making it easier to avoid last-minute fast food runs and buying expensive meals out.
6: Start a Side Hustle
Starting a side hustle can significantly boost your income without requiring a large upfront investment.
It’s an effective way to utilize your passions, skills and hobbies to make money in your spare time.
Whether it’s working as a proofreader, becoming a transcriptionist, or selling digital planners on Etsy, there are numerous options to fit your lifestyle.
Here are the steps to start:
- Identify skills or passions that can be monetized.
- Research potential markets to offer services or sell products.
- Set realistic goals for time commitment and earnings.
Thrifty Tip: Focus on side hustles that align with your interests to ensure you remain motivated and engaged. Prioritize flexible opportunities that fit your current schedule.
Take a look at these side hustle ideas for beginners:
- 26 survey sites that pay instantly
- How to earn $50/hour as a virtual friend
- 23 game apps that pay instantly to PayPal
- 46 ways to make $100 a day online
7: Lower Your Energy Bill
Cutting down on your energy bill can have a significant impact on your budget, especially as a low earner.
Utilizing Energy Star-certified products and adjusting your daily habits can save you money in the long run.
Follow these steps to lower your energy bills:
- Set your thermostat 7-10 degrees lower (or higher) when you’re asleep or away.
- Swap out incandescent bulbs for CFL or LED lights.
- Invest in Energy Star appliances if possible.
Energy Star-certified products are helpful because they are designed to use less energy, helping you save money on utility bills over time.
For more energy-saving tips, visit the Energy.gov website.
Thrifty tip: Unplug electronic devices when not in use to prevent phantom power consumption. This simple change can lead to noticeable savings on your energy bill.
8: DIY Repairs
When learning how to save money on a low income, performing DIY repairs will save significant money by reducing the need to hire professionals for minor home issues.
You can avoid high labour costs and increase your confidence in maintaining your home and start with small projects, like fixing leaky faucets or patching drywall.
Follow these steps:
- Identify manageable repairs in your home.
- Gather necessary tools and materials.
- Follow online tutorials for guidance.
- Consult a professional if unsure.
Thrifty tip: Invest in a basic toolkit to ensure you’re prepared for various repairs, maximizing your savings over time.
9: Find Free Entertainment
Finding free entertainment can significantly reduce expenses without sacrificing fun.
Engaging in activities that don’t cost money is a great way to enjoy leisure time while keeping finances in check.
Explore local parks for hiking or picnics and attend community events or festivals, often free to the public.
Libraries offer free access to books, movies, and sometimes even workshops or events.
Tips to Find Free Entertainment:
- Check local event listings online or in community centres
- Visit public libraries for resources and events
- Search online for free events in your area
Thrifty Tip: Keep an eye on social media for pop-up events and free local attractions.
10: Shop at Thrift Stores
Shopping at thrift stores can be an effective way to save money and stretch your budget.
New clothes, household items, and even furniture can often be found at a fraction of the original cost.
By purchasing second-hand items, you help reduce landfill waste, supporting a more sustainable lifestyle.
Things to consider:
- Visit stores early for the best selection
- Look for discount days or special sales
- Be open to unexpected finds
Thrifty tip: Always inspect items for any hidden damages before purchasing to ensure you’re getting the best deal.
Further reading: 20 best sites to sell used clothes online.
11: Avoid Impulse Buys
Impulse buying can quickly derail your budget, especially on a low income.
Controlling these spontaneous purchases saves money and keeps your financial plan on track.
Follow these steps to avoid impulse buying:
- Create a shopping list before heading to the store
- Set a spending limit using cash or a budget app
- Take time before purchasing non-essential items
Thrifty tip: Wait 24 hours before making an unplanned purchase. This helps to differentiate between wants and needs.
12: Use Credit Card Reward Points
Maximizing credit card reward points is a smart strategy for saving money, especially on a low income.
Many credit cards offer points for various purchases, which can be redeemed for travel, gift cards, or cash back.
This can reduce your expenses by allowing you to use points to cover costs that would otherwise require cash.
To get started:
- Choose a card with rewards that fit your spending habits.
- Pay off your balance monthly to avoid interest charges.
- Use your card for essential purchases like groceries and gas.
Thrifty Tip: Use rewards for items you would buy anyway, ensuring the value of points enhances your savings without extra spending.
13: Make Your Own Gifts
Creating your own gifts can be a fantastic way to save money in the holiday season.
Instead of purchasing expensive presents, consider making something personalized. This approach not only saves money but also adds a personal touch that store-bought items lack.
Personalized gifts are often cherished more because they show thoughtfulness and effort.
You can even make your own Christmas decorations to save extra cash.
Here’s a quick guide to get started:
- Determine the recipient’s interests to tailor your gift.
- Use materials you already have at home to reduce costs.
- Search for DIY gift ideas online for inspiration.
Thrifty tip: Consider crafting consumable gifts like homemade jams or baked goods. They are typically inexpensive and well-received.
Further reading: 21 easy things to make and sell.
14: Save Change from Each Purchase
Saving the change from each purchase can gradually build a significant amount of extra cash over time.
This method works well for those with limited income, as it easily integrates with daily spending habits.
Track your cash purchases and set aside coins and small bills. The key is consistency; even small amounts add up.
Follow these steps to get started:
- Use a dedicated jar or container for change
- Consider rounding up purchases to the nearest dollar and saving the difference
- Utilize apps like Acorns that automatically invest spare change
Thrifty Tip: Combine this strategy with a budgeting app for a more comprehensive approach to saving.
15: Cancel Subscriptions
Cancelling unnecessary subscriptions can be a powerful way to cut expenses, especially on a low income.
Evaluate your monthly subscriptions, such as streaming services, gym memberships, or magazine deliveries, and determine which ones you genuinely use.
Consider the cumulative cost of these subscriptions – even cutting out just one or two can lead to substantial savings over a year.
Follow these steps:
- List all active subscriptions.
- Identify seldom-used services.
- Cancel those that aren’t essential.
Thrifty tip: Use a subscription management app to track and manage your services effectively.
16: Use Public Transport
Using public transport can significantly cut your transportation expenses, which account for a major part of most budgets.
Public transportation generally costs less than maintaining, insuring, and fueling a personal vehicle, making it an economical option for those on a low income.
Here are some tips:
- Research bus and train routes in your area to identify the most efficient options.
- Purchase monthly or annual passes to save on daily fares.
- Consider programs offering reduced fares based on income level.
Thrifty tip: Utilize apps and websites to check real-time schedules and plan your trips efficiently. This can minimize waiting times and make your commuting experience smoother.
17: Borrow Rather Than Buy
Borrowing items instead of purchasing can be a practical way to save money, especially if you only need something temporarily.
This approach reduces the need for storage and avoids the cost associated with purchasing.
Consider borrowing tools, party supplies, or even books from friends, family, or community organizations like a library.
Thrifty tip: Always return borrowed items on time to maintain trust and ensure you can borrow again in the future.
18: Make Your Own Cleaning Products
Creating your own cleaning products is a practical way to cut costs, when learning how to save money on a low income.
Many household cleaning products can be made from simple, inexpensive ingredients like vinegar, baking soda, and castile soap and these homemade solutions are often just as effective as store-bought products.
Check out these sites to make your own cleaners:
Thrifty Tip: Customize your cleaners with essential oils for a personalized scent that also adds cleaning power.
19: Learn Money Saving Skills
On a low income, adopting money-saving skills can make a significant difference.
Focus on practical skills like budgeting, couponing, or meal planning that are easy to understand.
Analyze your expenses and identify areas where you can cut costs and learn the art of using coupons both in-store and online to lower your shopping costs.
Check out these sites for free financial education:
Thrifty tip: Regularly review your skills and adjust your methods to ensure they fit your lifestyle and goals.
20: Grow Your Own Vegetables
When searching how to save money on a low income, growing your own vegetables is an effective way to cut costs and keep more money in your bank.
This approach is beneficial for those on a low income as it reduces grocery bills and provides healthier options.
Starting a vegetable garden doesn’t require much space or money and even small containers on a balcony can yield productive crops.
Follow these easy steps:
- Start by choosing easy-to-grow vegetables like lettuce, tomatoes, and herbs.
- Use seeds instead of buying plants to save more.
- Utilize kitchen scraps and compost to enrich your soil.
Thrifty Tip: Try vertical gardening if space is limited. It maximizes your growing area and is perfect for small spaces.
21: Automate Savings to a Savings Account
Automating savings is a practical way to ensure regular contributions to your savings account without extra effort.
It involves setting up automatic transfers to move a fixed amount of money from your checking account to your savings account on a regular basis.
This method is beneficial for those on a low income, as it helps build savings without needing to remember each month.
Consistent saving, even in small amounts, can lead to significant savings over time.
This approach allows you to prioritize saving before spending, making it easier to manage your finances effectively.
Follow these steps to get started:
- Choose an amount you can afford to save regularly, even if it’s small.
- Log in to your bank’s online portal or app and set up automatic transfers.
- Specify the frequency of transfers, such as weekly or monthly.
Thrifty tip: Start with a small amount and increase it gradually as your financial situation improves.
Things to Consider When Saving On a Low Income
While there are many benefits to how to save money on a low income, there are a few things to consider before you get started.
Take a look below:
Your Budget
Creating a budget is the cornerstone of managing your finances.
Prioritize essential categories like housing, utilities, and groceries and allocate a portion for emergency savings, even if it’s a small amount.
Tracking your income against expenses helps identify where cuts are feasible.
List all your income sources and add them up monthly and break down costs by category for better visibility.
Apps or spreadsheets can assist in maintaining and reviewing your budget regularly.
Your Expenses
Evaluating your expenses is crucial when saving on a low income.
It’s important to differentiate between needs and wants eg; needs include rent, utilities, and food, while wants might be dining out or entertainment.
Start by listing all monthly expenditures and look for subscriptions or memberships you can live without.
This can free up funds for savings or debt repayment. Always look for ways to reduce existing expenses, such as switching to cheaper service plans or negotiating bills.
Consistent review helps keep your expenses aligned with your budget.
Financial Goals
Setting specific financial goals is vital for guiding your savings strategy.
Decide what you are saving for—emergency funds, debt reduction, or future investments as goals give a clear direction for your savings efforts.
Quantify your goals in real terms, eg; saving $500 for emergencies within six months gives you a target to work towards.
Break these goals into smaller, actionable steps, and review your progress regularly to ensure you’re on track as a well-defined plan keeps you motivated.
Partner or Child’s Needs
If you have a partner or children, consider their financial needs as part of your saving strategy.
Family discussions about money can help everyone understand financial limitations and priorities.
Balance your budget to accommodate shared responsibilities, such as education expenses or shared household costs.
Open communication ensures that everyone is on the same page.
Be sure to factor in costs like healthcare or child care that could impact your budget, and adjust other areas to accommodate these needs.
Final Thoughts on How to Save Money on a Low Income
Now you know how to save money on a low income, it’s up to you to start using these strategies in your daily life.
Focusing on essential needs over wants can help you manage your funds better and assessing your expenses and cutting unnecessary costs is a crucial step.
Keeping your goals small and achievable encourages consistent progress – remember, incremental savings add up over time.
The post How to Save Money On a Low Income: 21 Practical and Simple Ideas appeared first on Remote Work Rebels.
* This article was originally published here
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