June 4, 2020
Trying to increase your saving when you're not earning much money is no walk in the park. Discover our tips for saving money on a low income.
Savings are an important safety net for your financial security. Whether you're saving for your future or simply putting cash aside for a rainy day, increasing the size of your savings account is a simple matter of careful budgeting. But when you're not earning much income, saving money can feel almost impossible.
If you're working for minimum wage, part-time, or your hours have been cut, there are steps you can take to keep saving money. Your savings will likely grow more slowly, but there's no need to stop putting money aside completely. Here's how to budget and save money on a low income.
Having a clear goal in mind will ensure your savings stay on track. It's easy to feel disheartened when you're setting money aside at a snail's pace, but try and think of the big picture – even if you only save $50 a week, those contributions will add up over time.
If you're tempted to abandon your savings plan, visualise the item you're saving for. Whether it's a new car, luxury holiday or house deposit, don't let a few setbacks stop you from eventually affording your dream purchase. Giving your goal a deadline will help strengthen your motivation for saving money, making it easier to be disciplined when budgeting. Set a date for when you'd like to hit your savings goal and do everything you can to stick to that timeframe (within reason of course; don't start living off toast just to meet your savings goal).
Not sure how to save money when you live paycheque to paycheque? Getting your debts paid off quickly is crucial. Figure out how much money you spend servicing your debts each month to better understand the size of your debt. You might be surprised how much of your income gets swallowed up by paying back borrowed money. Saving for your future will become a lot easier once you've paid off any high-interest debt.
From cigarettes to lattes, everyone spends money on items we don't necessarily need. These little extras may bring you joy but cutting back on them for a while will make a big difference to your savings account. Rather than trying to go cold turkey on non-essential purchases, take a gradual approach by buying coffee every other day or catching the bus instead of getting an Uber to work. You could save hundreds or even thousands of dollars a year!
Saving money on a low income can take time, so try and be patient. It might be tough, but your discipline will be rewarded with a nice savings account.
Need to pay for an unexpected expense but don't have the savings to cover it? Consider taking out a fast cash loan with Sunshine Loans.