It may look easy, but saving is tough and requires extra effort. It’s bad enough that most people can’t save money with big salaries, let alone save money on a low-income budget.
Whether you are on a high-income or low-income, saving has to be intentional. No doubt, human needs are insatiable, and that makes your income budgeted.
However, you can decide to overlook some needs to ensure you save out of the budgeted income.
Generally, the inability to save on a low or high income is associated with several financial and psychological factors. Some of the factors include; lack of discipline, lack of access to the rudiments of savings, inability to see the reason to save.
Among these factors, the most evident one is the inability to employ creative saving strategies. People with high-income believe they will always have money to cover loopholes. In contrast, people with low-income believe the income is too small to deduct an amount for saving.
Either way, it is essential to know that your income can only determine how much you save and not give you a reason to save. Whether low or high, you will be surprised how much you can achieve by saving.
Stop being afraid to start saving even with a low income.
In case you are bothered about how much you will be left with after saving from your low income, you must know that you will always have needs to meet. So using all your income to sort immediate needs doesn’t change the fact that you wouldn’t have another set of requirements to meet the following month. It will keep increasing. So you have to learn how to save as long as you are earning some income.
Ask yourself some important questions;
What if you get to save a certain amount for a year or two?
What if you cut some cost from your wants cart and transfer it to a savings cart?
What if you challenge yourself to start saving more money?
Well, all you need to do is to start saving and stop wishing or hoping. Rather than procrastinate, take action. Save some dollars from your income, no matter how small.
How to Increase your income by 50% in a month?
Increase in value equals an increase in income. As an employee or an entrepreneur, you can increase your income by 50% if you are determined to add value to yourself. Most employers only pay people who keep adding value to their organisation, people who can help them reduce costs or increase sales.
For entrepreneurs, you will be able to enjoy increased lead conversion and experience an increase in sales if you make your product more valuable. If you are looking for a pay raise in your current company, you need to increase the value you have been giving to the company. As a baker, don’t be afraid to add pastries and smoothies to the baking service you provide.
As a freelancer, don’t be scared to pick up more jobs. You can develop some skills within a month or two by dedicating just a few hours a day to learn or brush up on the skill. Take advantage of that and increase your value.
What comes to your mind when you have money?
Know the thoughts that engulf your mind when you have money. Before diving into the world of savings and investing, you must know the things that overwhelm your mind regarding money.
Let me ask this important question;
When you have money, what do you think of?
Do you always pay others and completely forget to pay yourself?
Take some minutes to ponder these questions and write down why you haven’t been saving.
Save a part of your income immediately you receive it. A lot of people make the mistake of spending before considering saving or investing. Never spend before you save. Instead, save before you spend. Decide how much money you intend to start saving from your paycheck
monthly or pick a percentage that suits your style. I will advise you to start saving 20% of your income and aim to grow further.
How to survive on a low-income budget?
Surviving on a low-income budget requires a lot of financial discipline. A millionaire won’t increase their expenses immediately after a pay raise; they will instead increase their savings and investment than some believe.
To be rich, you must learn to manage your income wisely. When a low-income earner successfully masters how to save and manage money like a millionaire, he or she will be on the right part to becoming one.
Discipline in your income area can guarantee steady financial flow, while indiscipline will cause total disruption. Hence, you need enough knowledge of business intelligence and patience to manage your income as a low-income earner.
So, let’s dive into the topic of the day.
20 Easy Tips to Save Money on a Low-Income Budget for Beginners
1. Set a Yearly Goal: As a low-income earner, setting a monthly goal can be discouraging, but a compilation of annual income savings will be substantial enough to be converted into a profitable and well-researched investment. Setting goals is different from committing to it.
While goal setting is useful in itself, commitment is much more critical. However, active commitment towards your goals may require you
to have an accountability partner that will remind and nudge you to execute your goals. Be deliberate and committed to setting the goals and towards the attainment of the goals.
Careerwise, you can also take some time to audit your personal
development. You can take some training online to improve your present skills or develop some new simple skills that can earn you more money.
Much more, it is very crucial to prioritize your financial goals. Make your goals visible by pasting them where you can continuously see them daily to avoid non-execution.
2. Find Ways to convert your Time to Money: While working your regular 9-5 jobs, you can still find time to create digital products that can be sold online to earn more money. Social media platforms are there for people with little to no startup costs to build their leads and ultimately convert them to loyal customers.
So take advantage of these media platforms. Twitter is one of the best media platforms to create a convertible client base. Prioritization of your time for maximum productivity will also enhance more cash flows. Set a reminder to help you focus on using your time to produce results that will improve your financial life.
3. Invest in Longtime Business with Small Amount: Many resources teach low-income earners how to start saving and investing. You can start exploring those resources (books and video courses) to build your motivation to start working towards achieving your goal.
Platforms like Udemy, Lynda, and Coursera are enough for you to learn all
you need to learn about saving and investing. The majority of low-income earners or minimum wage salary earners are already living above their income. If you fall into this category, start taking a proper audit of your monthly expenses and cut costs by shoving aside some wants.
4. Expand your Earning Potentials: Scalability factor is an essential ingredient for anyone who is eager to expand their earnings. You can start building your wealth creation strategies bit by bit and work towards expanding it. Also, work towards creating more active and passive incomes by taking advantage of the internet.
You can learn simple ways of creating wealth; you can create multiple streams of income and start earning more money, thus reducing financial stress. All you need to contribute is the willingness to learn. If you dedicate time to learning, you will be surprised how much money you will save in a short while.
5. Minimize your Expenses: Find a way to limit the amount you are currently spending. Save money by incorporating DIY techniques in your day to day activities. Rather than go to the cinema for movies, you can download Netflix and watch the same movies on the platform. That way you would save the cost of transportation, the cost of buying edibles tickets.
6. Spend Wisely: There are many things you can easily do away with but decide to spend on. When proper budgeting hasn’t been laid down on your finance, you tend to spend your money without prioritizing the essential things to spend.
Always remember how hard it is to work money, as that will help you stop spend widely. Also, managing money properly can ultimately increase income and build your financial target. So get busy prioritizing your needs.
7. Be committed to your Savings Goal: Stop giving excuses for not committing fully towards your savings. Destroy every mindset that gets in the way and concentrate fully on achieving something substantial. Remind yourself daily about the advantages you will be getting from committing to your savings goal diligently and work towards them.
8. Save some money for Recurring Expenses: Recurring expenses like groceries, home repairs, cloths, monthly cable subscriptions can be reduced and replaced with free versions. You can also create separate spending plans for these expenses, quarterly, bi-annually, or yearly.
Having a clear budget plan on your recurring expenses will help you monitor your spending without going overboard.
9. Make a Short-term Savings Goal: Making a list of your savings goals with their price range can give you better prioritization and focus. You can arrange them from a smaller amount to a higher amount. Be it a vacation, a house down payment, short- course training, and other essential savings goals.
Some might be so cheap that you have to save for within a couple of months. Setting a short-term goal is a great motivation because it mostly requires little amount and can be achieved quickly, suitable for a low-income earner.
10. If you don’t have the money, don’t buy it: As a low-income earner, focus on what you need to survive. Prioritize spending on what will give you value and more income over what you don’t need.
A friend once told me, ‘If you cannot afford to buy the same thing twice, at the same time, then don’t buy it.’ Rather than buy the latest iPhone, you can enroll for a course that will increase your value.
11. Maintain an Emergency Fund: Arrange for an emergency fund with 3 or 6 months monthly earnings depending on how frugal you can save up. Emergencies like job loss or change, unexpected kids, sudden illness can be challenging to handle if you do not have funds kept for such situations. So set aside emergency funds to tackle all unforeseen circumstances and cover unexpected expenses without incurring debt.
12. Save your Loose Change: Saving your daily loose change can be an incredible saving technique. Money saved can be channeled to a monthly investment or a particular savings goal that brings a big profit margin after a short while. You can also add a daily saving challenge by getting rid of something you can do away with.
13. Set a Budget: You should not underestimate the power of budgeting your income to save money. Having a budget on your income gives you some form of control over your spending. When you budget, you will rather stick to budgeting than unscrupulous spending. So, create a separate account for your savings, investments, expenses, and emergency funds on a weekly or monthly basis. By so doing, you will have successfully created the habit of saving money from your monthly income.
14. Stop Shopping to Pass Time: You need money for your retirement days, kids’ college funds, mortgage funds, and other important things. So stop shopping to pass the time.
If you want to pass time, read a book or any other thing you love to do. In all, never do anything that will cost you money to pass time.
15. Increase your Income: Add additional streams of income to earn more and save more. Recent happenings in the world have given everyone cogent reasons to find ways to make extra money during their free time. You can even expand your existing skills to other companies or individuals in need of it to earn more.
16. Set Clear Financial Goals: Stop comparing your savings goal to others. Set your own rules and focus on the little you have. By focusing on the little you earn in your daily to monthly to yearly goals, you will be enjoying the power of compounding.
17. Focus on Creating and Maintaining Good Financial Habits: Just as we learn to keep showing up for a job every-day, you can also learn good financial habits. Try to always keep a visible list for your grocery supplies, office supplies, cleaning supplies, and staying ahead of everything you need for proper accountability.
18. Create a Visual Reminder of your Savings Goal: Paste your money goals to be visible to you every day. You can also send it to your family and friends or a community that can hold you accountable and even reminds you about your financial goals.
19. Understand Financial Metrics: Financial metrics are the primary key in your financial statements. To invest your money for more, always check the liquidity of a company’s cash flow. You can also take time to check free or paid resources online that explain in detail how to dive into the world of investments.
20. Keep Investing in Yourself: You can successfully invest in yourself in different ways. You can invest by buying books, enrolling for training and short courses, creating a passive income investment, online or physical business investments, and short and long-term business investments.
If you found these tips helpful, share with family and friends.