How to save money fast on a low income

WeMoney

There are plenty of different reasons why you might want to start saving money. But, when you’re on minimum wage or a similarly low income, it can be difficult to manage your personal finance. In turn, this can make it a lot harder to put money away each month, especially if you want to treat yourself and keep on top of your social life. 

But, no matter your circumstances, there are plenty of simple ways to save that you can try. With our money-saving tips, you won’t need a financial counsellor. You’ll just need a determined approach to budget planning and better awareness of your financial situation. 

Let’s get to the following commonly asked questions:

  • Why is saving money important?
  • How to manage money on a low income?
  • Is it possible to save money on a low income?
  • Can you save money fast on a low income?
  • Will budgeting be necessary to save money on a low income?
  • How to write a budget?
  • How to budget and save money fast?
  • How to save money fast on a low-income budget? 
  • How to save money fast while paying bills?
  • How to pay down debt fast and save money?
  • How to save money fast in different circumstances?

Q1. Why is saving money important? 

Simple saving tips can make all the difference when you’re trying to put money away, regardless of the reason. You might, for example, be starting your retirement planning early or trying to build up an emergency fund. Or, you might be hoping to grow your savings so you can invest in an exciting financial product in a few years. 

For a lot of people, though, particularly Millenials, the ultimate concern is whether they’ll be able to own real estate. But, before you can approach the mortgage lenders, you’ll need a house deposit and a high credit score. Saving is a surefire way to secure them both in good time. 

Q2. How to manage money on a low income? 

In some cases, saving might be a secondary consideration. Those on a lower income might live paycheck to paycheck and find that they struggle with basic financial security. In such situations, people often find that they rely on high-interest payday loans or emergency loans to get by. All too often, these exacerbate financial difficulties and should therefore be avoided at all costs.

Ideally, you should always have enough in your bank account for what you need with some money left to spend or save as you wish. But everything from housing costs to food shops and other expenses will add up. So, before you can even consider saving any extra money, you need to find a way to manage. 

Important: To manage your money on a low wage, start by looking at your monthly income and subtracting all necessary expenses, for example, utility bills and rent. Use this as the baseline for your purchases for the next month. Then, track your spending to see if there are any habits you could do with kicking. By doing this, will make it a lot easier to create a realistic budget. That’s when you can really start thinking about how to save money fast on a low income. 

Q3. Is it possible to save money on a low income? 

It is completely possible to save money on a low income, but that doesn’t mean it’s going to be easy. The best tips for saving money are often the simplest, although they will still require plenty of determination and consistency. Otherwise, it’s unlikely you’ll get anywhere near your savings goals


Note: By sticking to our budget tips to save money, you will be able to save even when money is tight. However, how much you save and the timeframe in which you save it will mostly be up to you. 

Q4. Can you save money fast on a low income? 

You don’t need to be a professional money manager to start setting aside money on a low income. With a tight budget and a solid savings plan, you can build your savings up quickly, even when you don’t earn as much as you’d like to. 

To do so, you’ll need to be on the ball every single month and set strict limits that you know you can stick to. Find out how to do exactly that below. 

Q5. Will budgeting be necessary to save money on a low income? 

It will be much harder (if not impossible) to save significant amounts of money fast if you don’t make a budget. Between bills, insurance costs, and every little living expense, there often isn’t much room for people on low incomes to start saving money unless they find it for themselves. 

With a good budget, you’ll always know how much you have to play with as soon as you get paid each month. You’ll also know how much you’re likely to spend on each type of expense before any of your money leaves your checking account. When you only have a small amount to play with, this sort of intentional, pre-planned spending can be invaluable. 

If you’re committed to your budget, by the end of your first year, you might have saved hundreds of dollars that you never knew you had to spare. 

Q6. How to write a budget? 

Writing a budget might not be the most exciting task, but it can make a whole world of difference to your long-term financial health. So, if you’re wondering how to save money fast on a low income, the answer is to start with a budgeting plan. 

Important: If you’ve already subtracted the coming month’s essential expenses from your income, such as your car payment and car insurance, renters insurance, and grocery shopping, you can begin to split up the money that remains. While the idea is to use 50% of your wages for bills and other necessities, 30% for wants and 20% for savings and a safety net, those on a low income should find a ratio that works for them. 

Then, you’ll need to note down each expected expense alongside the amount you plan to spend on it, which you can do in an Excel spreadsheet or on a budgeting app. If you’re serious about saving money fast, you might find you have to be more frugal for a while. 

Q7. How to budget and save money fast? 

Your money-saving endeavours don’t start and end with writing a budget. Once you have a plan in place, it’s time to put your new frugal living style into action. With our super practical budget tips to save money, you’ll have everything you need to begin building up a strong savings pot regardless of what you earn. 

Work out a minimum saving amount 

Given that your goal is to save, one of the most important actions you’ll take each month is adding money to your savings account. 

If you want to hit a particular target by a set deadline, you can use a savings goal calculator to find out the minimum amount you should be putting away every time payday rolls around. Then, when your paycheque comes in, use online banking to pay yourself before you get a chance to spend it. 

To make this process smoother, automate your savings. To do so, simply set up a direct debit from your current account to your savings account. When you do, you can rest assured that your minimum saving amount will always end up where it needs to be. 

Spend less on food 

Because food is an essential expense, it’s very easy to justify spending more than we need to on it. Whether you’re prone to impulse purchases in the grocery store or you like to order your meals instead of cooking them, food costs can very quickly spiral out of control. 

Consider making a meal plan at the start of each week and aim to use ingredients that are well within budget. And, instead of buying an overpriced branded product, why not try out a home brand alternative? Very often you’ll find it tastes the same and saves money. 

Look for free entertainment 

Getting out and about is important for your mental health, especially if you’re currently working from home. To avoid spending too much money, do some research to find entertainment that will save you money. Museums, art galleries, and libraries are all good choices because they’re usually free to enter and they often host community events. 

Use the envelope system 

Even the best intentions in the world can’t always keep you from succumbing to impulse buys. A tried-and-tested money-saving tip like the envelope system can help you avoid any blips and save money faster. 

With the envelope system, all you have to do is withdraw the money you’ve allocated for some of your monthly costs and split it up into envelopes. This could include, for example, taking money from your transaction accounts that have been assigned for food and drink, haircuts, and any extra spending money. 

As long as you only take the cash from the appropriate envelope out with you, you’re far more likely to stick to your spending limits. 

Evaluate your expenses 

If you find that you’re still struggling to save money with a more thrifty approach, the problem might not be your spending habits; it might instead be the cost of your monthly expenses. Check your bill statements; use a mortgage calculator and other loan calculators to better understand whether you might be being overcharged for some of your bigger outgoings. 

Then, move onto the smaller stuff. Cancel subscriptions you don’t use, downgrade your TV subscription (especially if you have an overpriced cable TV package), and shop around for a better value gym membership to ensure you only pay for what you need. 

Q8. How to save money fast on a low-income budget?

The above budget tips are all great ways to ensure you always set aside at least your minimum savings amount each month, no matter your income. But, if your income is low and you want your saved money to mount at a much faster rate, you’ll need to try a few bolder techniques. 

Make the most of freebies 

If your income is low, you may qualify for certain government benefits, for example, Commonwealth Rent Assistance or a Utilities Allowance. For more information on this, check out the Australian Department of Social Services official website. 

If not, you can always make the most of the benefits you get with loyalty reward programs and some rewards credit cards. By taking advantage of freebies, you can reduce the amount you spend each month and free up more money to put straight into your savings. 

Keep it lean 

While you shouldn’t stop yourself from enjoying life, it is also true that the leaner your budget is, the more you’ll be able to save. For a more aggressive saving strategy, then, keep all costs outside your essential expenses to an absolute minimum. 

Start a side hustle 

A side hustle, whether that be a part-time job, freelance work in your spare time, or selling items online, can help you increase your income. If you’ve already started saving, a side hustle could help you live a more comfortable life while putting more away than you could before. 

Q9. How to save money fast while paying bills? 

It’s no secret that bills cost a lot of money. As such, when your income is low, it can be difficult to see past the expenses and find a way to save. Here’s what you need to do to manage your bills so you can keep putting money away. 

Deduct bills from your net income 

Factor the cost of your bills into your net income so that you always know where you stand at the start of the month. Do so by totalling up the cost of all your monthly outgoings and subtracting them from your take-home pay. 

Note: Once you’ve deducted your income tax and income protection, energy bill, life insurance, home insurance, and other expenses from your standard monthly income, you’ll be in a much better position to create a budget that has longevity. 

Compare costs 

Because most bills will leave your bank account automatically, it’s easy to get complacent about them. If you take the initiative to shop around — then you might end up finding that there’s a better comparison rate for your gas and electricity bill; or cheaper insurance quotes for your car and home. 

Q10. How to pay down debt fast and save money? 

Another reason you might be struggling to save money is debt. With, say, a personal loan, home loan, and car loan to pay off all at the same time, there’s unlikely to be much left over for your savings. So, it’s a good idea to pay off debt as soon as you can so you can focus all your efforts on setting money aside. 

Refinance your loans 

If you want to pay off your debts faster, it’s worth looking into refinancing. As mentioned above, there could be plenty of low rate options out there waiting for you. To find them, try online price comparison tools that will seek out the best rates for your financial situation.

Important: If you decide to switch your existing loans or take out any new ones, avoid payday loans and loans with a variable rate. They’ll only interfere with your budget and end up costing you more than you need to pay. 

Pay your debts on time 

Just like with paying your bills, it’s important to always pay your debts on time each month. Whether it’s your car or your credit card, paying on the specified date (or even earlier) will help you avoid late fees and keep your credit score intact

Pay off high-interest debt first 

It’s good to be tactical about debt repayment, especially when you want to get as much paid off as soon as you can. So, figure out which of your debts carry the highest interest rates and aim to pay those off first. 

Remember that payday loans, which are also known as quick loans and short term loans, carry some of the highest interest rates, so steer clear. 

Start saving as soon as your debts are paid  

Don’t fall into bad habits and use paying off your debts as an excuse to start spending unnecessarily. Remember that you’re working towards a bigger goal here. So, once your loans are paid, try diverting a large proportion of the amount you used to pay each month into your savings instead.

And, if you did want to treat yourself to any big purchases to celebrate, look into buy now, pay later options. 

Q11. How to save money fast in different circumstances?  

By now, you know how to save money fast on a low income. However, different personal circumstances are likely to bring with them different barriers to effective saving. So, the following budget tips to save money are all about adding cash to a savings account whether you’re a student, single parent, or you’ve just started an entry-level job. 

Just remember that this advice is general. For personalised insights that are tailored to individual people’s financial situations, it might be worth reaching out to a financial advisor. 

How to save money fast as a student? 

For a lot of students, going away to university means taking charge of their finances for the first time. If that’s the case for you, you might feel at a bit of a loss when it comes to banks and credit. So, it’s a good idea to stick to your debit cards for the time being. And, even if you have a free arranged overdraft, avoid going into it. This will help you to consolidate good habits early. 

Note: To help you better manage your money while you’re still a student and also later, when it’s time to start paying your student loans, consider approaching financial advisers at university fairs or getting yourself a budget planner. 

How to save money fast as a single parent? 

Saving more money can be tough as a single parent, but it is doable. There are plenty of options available to you, from forming new daily habits to more extreme methods. You could, for example, start meal planning to ensure you always put meals that are healthy and affordable on the table. Or, you could consider downsizing. 

With a smaller home, you’d have lower living costs. So, the more annoying outgoings like the bills for your and your families’ cell phones wouldn’t seem so bad. 

Note: For more money-saving ideas for single parents in your situation, check online for good budget examples. There are sure to be plenty that will make budgeting for you and your kids a whole lot easier. 

How to save money fast with an entry-level job?  

When you get your first job, chances are the wages won’t be all that high. Before you work your way up, you’ll need to be careful with the money that you earn. Unwise spending right now could lead you straight to a bad credit score and this could jeopardise your chance of getting a mortgage later on. 

So, opt for public transport rather than getting a car for your commute and avoid overspending on nights out. Remember that living costs and mortgage rates are sky-high at the moment. If you want to save enough to eventually get your own place, you’ll have to be savvy in the early stages of your career. 

Note: If you’re saving now for a more comfortable retirement later, check to see if your new company has a super funds scheme in which they will match your super contributions. You’ll put far more in your pension pot far quicker if they do. 

In summary 

Managing your money and putting money into savings might sound simple on the surface. But, in reality, it takes a lot of lifestyle changes, both big and small, for hopeful home buyers to set money aside fast or to save for retirement quickly. 

Don’t worry too much, though. With our financial advice, a strong (and realistic) budget, and a smart approach to paying off your debts, there’s no doubt you can figure out how to save money fast on a low income. 

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Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs, or financial situation.

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