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How To Save Money Fast On A Low Income

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If you’re like most people, saving money is a challenge. But if you’re living on a low income, it can feel downright impossible. The good news is that there are plenty of things you can do to save money fast on a low income. You can start by following our helpful money-saving tips below!

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Living on a low income can be difficult, especially when it seems like every penny has to be carefully accounted for.

However, there are still ways to save money and make your budget stretch a little further.

In today’s post, we will discuss 15 ways that you can save money fast on a tight budget.

Some of these tips may seem like common sense, but, in the end, they can still make a big difference in your finances!

Tips to save money fast on a low income

According to a recent GOBankingRates survey, 40% of Americans have less than $300 in savings.

This is a troubling statistic, as it means many people are vulnerable and may have to rely on credit cards when an unexpected financial emergency comes up.

If you’re one of the millions of Americans who don’t have enough savings saved up, here are some tips for how to start saving for a rainy day, even if you are on a fixed (or low) income.

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1. Track your spending

One way to start saving is to track your spending for a month.

This will help you see where your money is going and where you can cut back.

Make sure you pay attention to expenses that seem small, such as trips to the convenience store or ordering takeout.

You’d be surprised how much these little things add up over the course of a month!

How to track your spending

  • Use a spreadsheet or app to log your daily expenses.
  • Look for patterns in your spending and make adjustments accordingly.
  • Don’t forget to include fixed costs, such as rent and loan payments, in your tracking.
  • Set a spending limit and make sure you stick to it.

What to track in your spending

  • Date
  • Amount
  • Method of payment
  • Where you spent the money
  • What the money was spent on

Taking the time to track your spending can help you identify where your money is going so you can make adjustments if necessary.

Benefits of tracking your spending

  • You’ll be able to identify where your money is going
  • It will help you set realistic savings goals
  • You’ll be able to make adjustments if necessary
  • You can allocate more funds toward things that are important to you

Once you have a clear picture of where your money is going each month, you can start to make adjustments to ensure that your spending aligns with your goals.

If your income is low, there are a few strategies that can help you stay on track.

2. Create a budget that works for you

A budget is simply a road map to help keep you on track with your money goals.

Creating a budget is essential if you want to save money especially if you live on a fixed (or low) income.

How to create a budget on a low income

Let’s face it, most of us are not very good at managing our money.

We often overspend on things we don’t need throughout the month and then find ourselves struggling to make ends meet at the end of the month.

This is why, if you’re tired of living paycheck to paycheck, it’s time to create a budget.

The first step is to figure out how much money you have coming in each month. This includes your salary, any benefits you may receive, and any other sources of income.

Once you have a clear idea of your income, you can start looking at your spending habits.

Where are you spending too much money? Are there any areas where you can cut back?

Once you have a better understanding of your spending patterns, you can begin to create a budget that works for you.

It may be tough at first, but stick with it and you’ll soon see the benefits of living within your means.

Add up your total income

Start by adding up all the money you make each month. This includes your job, government benefits, child support, and any other kind of income you receive.

List all of your expenses

Once you know how much money you have coming in each month, it’s time to list out all of your expenses. This should include things like rent and food, but also any discretionary spending such as entertainment and travel.

Set realistic savings goals

Use the information you’ve gathered about your income and expenses to set realistic goals for how much you can save each month.

Prioritize your essential expenses

Make sure you have enough money to cover your essential expenses each month, such as rent, transportation, and food.

Factor in unexpected expenses

Setting aside some money each month for unexpected expenses such as car repairs or medical bills is important because it’s not a matter of if an emergency will happen, but when.

Find ways to cut back on discretionary spending

Once you’ve set a budget, look for ways to cut back on spending. This could include making your own coffee instead of going out, taking the bus instead of driving, or packing lunch instead of eating out.

Seek assistance if necessary

If you’re struggling to make ends meet, don’t be afraid to seek out assistance from government programs or nonprofit organizations.

Adjust your budget as needed

Don’t be afraid to adjust your budget if you need to. Review your spending regularly and make changes as needed to ensure that you are staying on track with your money goals.

By following these steps, you’ll be able to save money even when living on a low income and build a secure financial future for yourself.

What to include in your budget

  • Income
  • Fixed expenses (rent, loan payments, etc.)
  • Variable expenses (groceries, entertainment, electricity, etc)
  • Emergency expenses (car repairs, medical bills, etc.)
  • Savings

Creating a budget that you can live with is an important first step in saving money. It will help you keep track of your income and expenses so you can see how much money is left over for savings.

Adjust your budget as needed, in order to make sure that your spending is realistic and sustainable.

3. Automate your savings

Setting up automated transfers from your checking account to your savings account each month is a great way to stay on track with your savings goals.

You can set up an automatic savings amount and frequency, so you don’t have to worry about manually transferring the money each month.

Advantages of automating your savings

  • You won’t forget to transfer the money
  • It will help you stick to your budget
  • You can adjust the amount and frequency as needed
  • You can save without having to think about it

In short, automating your savings is an easy and effective way to stay on track with your savings goals.

By setting up the transfers ahead of time, you’ll be able to save money without even thinking about it.

How to automate savings

  1. Set up an automatic transfer from your checking account to your savings
  2. Choose the amount and frequency of the transfers (weekly, bi-weekly, monthly)
  3. Make sure you have enough money in your checking account for the transfers
  4. Adjust the amount and frequency as needed

Disadvantages of automating your savings

  • You may not have enough money in your checking account for the transfers
  • You could get too comfortable with the automated savings and forget to make manual transfers
  • It may be difficult to adjust the amount and frequency as needed

5. Try a no-spend month

If you’re really serious about saving money, a no-spend month may be the best thing for you.

A no-spend month means that you commit to not spending any money (outside of your necessary bills) for a full month.

This includes all forms of spending, from food and entertainment to clothing and home goods.

No-spend month rules

The rules for a no-spend month are simple.

Decide on a timeframe.

If an entire month of limited spending terrifies you, try it for a week and work your way up.

Don’t buy anything that isn’t absolutely essential during this timeframe.

This means no dining out, no impulse purchases, and not even a trip to the store for snacks.

The goal is to rely on what you already have in your home—from food to entertainment—and avoid any unnecessary spending.

At the end of the month, track your progress.

Calculate how much money you would have spent if you hadn’t done a no-spend challenge and compare it to what you actually saved by cutting out unnecessary spending.

This can be an eye-opening experience that might even inspire you to keep up the tradition!

6. Cut out unnecessary expenses

Take a look at your last few bank statements and identify any expenses you can eliminate, such as subscription services or streaming content. Cut out any impulse-buying and unnecessary items especially increased credit card debt.

Do you frequently swing by the fast food drive-thru on your way to/from work?

Regularly purchase items other than gas at convenience stores?

Or buy pre-packaged snacks that you could easily make at home?

These are all small expenses that can add up over time.

7. Sell your stuff

From clothes and furniture to electronics and toys, we all have items in our homes that are just collecting dust. Why not turn them into cash by having a yard sale or selling them online?

You can use the money you make from these sales to help build your savings account or pay off any outstanding debt.

You’ll be shocked at how much extra money you can make fast just by decluttering your house!

8. Set aside money for emergencies

Before you start saving up for a large purchase or paying off debt it’s important to first set aside some money for unexpected expenses that will inevitably come up.

If you don’t have an emergency fund already, start small and commit to setting aside a certain amount of money each month.

Even if it’s just $10 or $20 per month, this financial cushion will help prepare you for anything life throws your way.

9. Save money on housing

The most expensive categories in anyone’s budget are housing expenses, transportation, and food. Therefore, the best way to cut back so you can save money fast is in these areas.

It’s important to note, your housing costs aren’t limited to your rent or mortgage payment. They also include your utilities, internet, maintenance, insurance, and even the products you buy to clean your home.

Of course, you’ll save the most money if you can find a cheaper place to live. However, this isn’t always possible.

Therefore, you should start with your insurance company. Call them and see if you can switch or adjust your coverage in order to save money. Increasing your deductible will often reduce the cost of insurance.

Another way to save money fast is to reduce your electricity and water usage.

Lower your thermostat in the winter and raise it in the summer. Instead, wear extra layers and use fans when it’s hot out.

Cut back on the cleaning supplies you use and purchase them from the dollar store whenever possible.

10. Save money on transportation

The best way to save on transportation expenses is to go car-free or to become a one-car family.

Again, this isn’t always feasible. However, that doesn’t mean you have to resign yourself to spending more than the minimum on transportation.

You can eliminate car payments by selling your car and replacing it with a vehicle you buy with cash.

Call your insurance company and negotiate a better rate.

Again, the higher your deductible, the lower your premium will be. Just make sure you have the money set aside to cover the deductible in case you need to file a claim.

For shorter trips, why not walk, ride a bike, or catch a ride with friends?

If you live in a larger city, you can rent out your car on your days off.

11. Save money on food

Let’s face it, in the past year, the cost of food has gone through the roof and creating food budget is essential.

Food is one of the biggest expenses on a low-income budget, but there are still plenty of ways to save.

Start by planning your meals for the week and creating a grocery list based on what you need. Stick to it and only buy items from that list.

Next, look for coupons and discounts at your local grocery store. You can also look for deals online and use cash-back apps.

Cut back on food waste by finding creative ways to use leftovers.

Finally, eating out should be a treat, not an everyday occurrence.

If you currently grab fast food for lunch every day, switching to bringing your lunch from home can save you between $100-$200 dollars a month.

Meal planning and cooking at home will help you save money while still eating healthy meals.

12. Reduce your cell phone bill

If you’re low on income, one of the best ways to save money fast is by reducing your cell phone bill.

Do you really need that unlimited data plan? Could you get away with just a basic plan and use Wi-Fi for streaming content when you can?

Look for cheaper plans or consider switching providers. You’d be surprised at how much money you can save by shopping around. Many cell phone providers will even buy out your existing contract.

Finally, if you’re on a low income and receive government benefits, the Lifeline Assistance Program can help you save money on your cell phone bill each month.

Additionally, the Affordable Connectivity Program can help you save up to $30 on your broadband internet connection each month.

13. Don’t buy, borrow

Another good way to save money is to borrow items instead of buying them.

For instance, if you need a saw for a one-time job, ask around to see if anyone has one you can borrow. Just remember to repay the favor whenever you can.

You can also rent items for short-term use or join a tool library where you can borrow items for a low fee.

14. Bank extra money

If you get an unexpected cash gift, raise, or bonus, avoid the temptation to ‘treat yourself’ and stash that money in the bank instead.

This will help you quickly build up an emergency fund that can be used for unexpected expenses.

You can also use this money to save up for larger purchases like a car or home upgrades.

By banking the extra cash right away, you won’t be tempted to blow it on non-essentials.

15. Increase your income

Sometimes, no matter how much you cut back, there’s simply not enough money in your budget to get ahead.

When this happens, your best bet is to look for ways to increase your income.

See if your employer has any available opportunities for overtime or ask about taking on extra responsibilities.

You might also think about starting a side hustle or even a side job on your days off or even finding a job that pays better.

Just be careful to avoid ‘lifestyle creep’ (increasing your spending when you increase your income), and stay focused on building up a healthy savings account.

How to save money fast on a low income: Final thoughts

Living on a low income can be challenging, but that doesn’t mean you have to resign yourself to spending more than the minimum on housing, transportation, food, and other essentials.

There are plenty of ways to save money while living on a tight budget. By following these tips, you can make your hard-earned dollars go further.

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