Saving money is important to establish your financial security. Life can be unpredictable. Having savings can help you handle any unexpected life emergencies or situations with ease.
Moreover, it also helps you attain your financial goals and prevents the ‘living from paycheck to paycheck situation.
The major challenge a number of people state as to their lack of savings is that they have no money or don’t make enough to save. However, lack of money should not be an excuse, as you can always work around such a situation.
How to save money with low income
This article explains how you can achieve this in 5 ways.
Get a job
If you have no job, the first step is always to get a job so you can have a source of income. You cannot save without a source of income. Once you get a job, you have to plan on your income.
This means you have to create a budget and stick to it strictly. In making your budget, figure out the amount of money you require for the recurrent expenditure, such as the bills, groceries, etc.
You can then add some cash to your savings account and have the rest as your personal money, which you can either choose to add to your savings or spend. For your savings, you don’t have to put in a lot of money; you can start small and build the account slowly.
In case you have a job, but after paying off the bills and incurring other expenses, you have nothing left, you can consider two things. One is adjusting your lifestyle. Living a life you can afford and embrace simplicity is key to achieving your financial goals.
Cut off all the unnecessary expenses and opt for cheaper alternatives to get some extra cash from your current earnings. Two, you can get another job.
You have to be willing to work extra harder to earn some extra money. An extra job is an easier way to add to your current income and get some money for your savings.
Pay yourself first
This is a common way to make sure you have some savings at the end of every month. This method is effective for those who cannot manage their paychecks and end up with no money.
Sometimes it is very tempting when you have money at your disposal. To avoid temptation, after you get your paycheck, transfer money directly to your savings account. A better alternative is to set up a recurring automated transfer to do the transfer. With the remaining money, you can budget for yourself.
The best solution is to create a high-yielding savings account online. These are perfect for saving. Moreover, they have high-interest rates that help in growing your savings.
It is, however, important to note that before you can transfer money to your savings account, you need to have a budget. This will enable you to know the amount of money you’ll need for your savings that is within your financial capability.
This method is useful for those who use up all the money in their paychecks and remain with nothing afterward. Here, you have to figure out what you don’t need and stop spending on it.
For instance, if you love to shop for new clothes and shoes every month, you can commit not buying clothes and shoes for a few months. You can work with your old outfits in the meantime.
The extra money you can transfer to your savings account. Also, if you need other outfits, you can purchase second-hand clothes in good condition and cheaper. This will save your finances a great deal. Furthermore, you can get free clothes from family, friends, clothing swaps, and giveaways.
For subscriptions, check all the accounts to confirm that you are not paying any unnecessary fees. If you are, cancel the subscriptions. Moreover, if you have too many subscriptions of the same kind, such as movie subscriptions, you can cancel all the subscriptions and remain with the one you love most. Some of these series and movies you can watch via YouTube.
You can also try cheaper subscriptions. In the competitive market, you cannot miss a product of the same quality that is cheaper than other brands.
Additionally, you can be on the lookout for regular discounts offered by your subscription company. If you are uncertain, you can always call to check if there is any. Always pay your bills on time to avoid late charges fees which take up your extra money.
In addition, you can strive to always eat at home more than outside, to save your money. If you go to work during the day, carry some packed lunch from home.
After minimizing the cost to squeeze some money from your paycheck, transfer the extra money to your savings account.
Selling what you don’t need
We often keep things that we don’t need or use, such as clothes, accessories, shoes, furniture, etc., in our homes. This is like having idle money in the house.
You can easily convert these items to something useful to you, like money. The internet has made it easier to buy and sell goods online. All you need is to take a picture of that item and post it online.
In a matter of hours, the item will sell, and you’ll have some money in your account. This money can form a part of your savings. It may not be much or a regular source of income, but it will be useful.
Paying off your debts
The main reason you may be broke is that a good amount of your earning goes to pay off the high interests from your debt. This is more of a long-term saving goal, but it is actually very efficient.
From your regular pay-check, allocate some money to pay off the debts bit by bit till it is complete. The money you would use to pay off the interest and the loan, transfer to your savings account.
Start your saving journey now
The first step to attaining financial freedom has an open mind. Work towards all these steps with a positive mindset.
Make that sacrifice that may turn your life around.
At the end of it all, you’ll have changed something you thought was impossible to possible.