I get a lot of questions from readers wanting to know how they can save money on a low income, so I thought I would write a post about some of the suggestions I’ve been giving out that can help you put money in the bank, even when you’re living on a limited income. I’ve also included some great resources along with the suggestions that will help you get started putting money in the bank right now! You Can Still Save Money On A Low Income 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.
Here are 10 ways you can save money on a low income
1. Have a budget
Never spend money on a whim or just because you “feel like it”. That’s where a lot of money leaks tend to happen. 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. When you approach your spending in that way, you’ll feel like you got a raise because it frees up money that you were wasting when you didn’t have a plan.
2.Buy basic necessities in bulk
Buy children stationaries, toiletries and food stuff in bulk when you buy in bulk you save more cost than buying in bits. Let us do this simple calculation. A bag of rice costs N16,000.00 and we have 320 milk tin cup size of rice in a bag, a milk tin cup of rice costs N80 this times 320 equals N25,600.00 technically the retailer has made N9,600.00 from you from a bag of rice. We have not evaluated vegetable oil, onion, magi, peppers and co. When you buy food stuff in piece meal you are making the mistake of kobo wise, naira foolish. When you buy food stuff in bulk you save more.
3.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% your take home pay or less. I realize that in some areas of the country this might be impossible on a small income, but there are always a few very good deals available on rent. Just be diligent and keep looking. If you are single, you can even take in a roommate or two and charge them rent to save money on housing costs. That’s money you can put straight into investments or an emergency fund!
4. Buy Used Stuff
Buy everything you can use. Buy used cars, used electronics, used furniture, clothing, etc. You’d be surprised at the great deals you can find on stuff that’s been barely used. Sometimes you can find “open box” items that haven’t been used, Believe it or not, my wife even picked up a beautiful set of wrought iron and glass shelves that someone had set out for the garbage collector that had absolutely nothing wrong with it. They just didn’t want it anymore and were too lazy to give it away or sell it (price = FREE!). There are incredible deals out there for most anything you want or need, you just have to know where to look. Never pay full price if you don’t have to!
5. Sweat The Small Stuff
Take your lunch to work, plan to do your errands all at once to save fuel instead of making multiple trips. Save your change and cash it into an investment there are always ways to cut costs if you need to that will free up money that can go straight into savings. You will be surprised how much you can save when you get creative.
6. Take public transport
If you can ditch the car to go to the store or to work, then do it. You can park your car take public transport in order to save money on fuel and wear and tear. You will save money on fuel and have the added benefit of getting more exercise. It’s a win-win!
7. Find a Side Gig/hustle
There has never been a better time in history to find ways to make extra money. I’ve written a whole series of articles that can get you started, and I’ll be adding more “Money Making Ideas” over time. Ideas rule the world, when you discover a problem, find solution through ideas, create added value and make extra source of income.
8. Stay Out of Restaurants
Of course, it’s ok to eat out occasionally, but making eating out a regular habit can add up very quickly. 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 get together at your house and have everyone bring a dish. You’ll have just as much fun for a fraction of the cost.
9. Get Rid of Cable TV
This is one of the more common suggestions you’ll find, but it’s also one of the most effective. Get rid of your cable bill and save money for your future instead. You can still get the free broadcast channels and enjoy plenty of good programming and all the news you need or download favourite movies on YouTube, store in the flash and watch later. It could also have the side benefit of freeing up some extra time to work on a side gig or increase your skills for your present job so you can get a raise or promotion.
10. Get prepaid meter
A prepaid meter can save you a lot of money being paid to Electricity and distribution company. I remembered sometimes ago when using the Analog meter, PHCN officials will just come with a monthly bill of N20-25K monthly with inconsistent electricity supply but now with the use of prepaid meter and energy saving bulbs, I pay as low as 6k monthly.
Diligence Is the Key
Of course there are plenty of ways to save money if you put your mind to it and get creative. But when it comes down to it, diligence is the key to save money on a low income. When you use any of these techniques mentioned above, you have to be sure to stick with them for the long term, and when you determine how much you’re saving from each one, put that money in the bank as an emergency fund, or into investment accounts to provide for your future needs. I realize that trying to put money into savings on a low income can be a daunting task, but it can be done. These are just a few of the things you can do to get started. It is doable, you can start now! A journey of a hundred mile starts with a step!