Do you feel like it's nearly impossible to save money based on your current
income while saving money is much easier when you're making big bucks it is
entirely possible to save money on a low income therefore in this video I will
share with you seven practical ways to save money on a low income and if you're
new to the channel then hit the subscribe button for more life-changing
content tip number 1 lower your housing costs
whether you rent or you own the cost of your housing will be your largest
expense every month many financial experts suggests that the total of your
rent or mortgage payments plus bills should be no more than 35 percent of
your monthly after-tax income and while this expense eats up a lot of your
monthly income it also offers the largest opportunity to find cost
reductions essentially allowing you to save more money even if you're earning a
lower income for renters there are numerous wastes you can reduce your
housing costs with the first being to find a cheaper place perhaps a single
room in someone's house will be adequate for your needs instead of continuing to
rent a two-bedroom apartment but if you have no desire to move then it may be
time to look into other ways to reduce your current rent effective strategies
can include negotiating an exchange of your services like doing renovations for
a rent reduction or agreeing to sign a longer lease if the tenant security is
what your landlord wants when I used to rent I exchanged tax advice and monthly
bookkeeping services for a few extra hundred dollars off my rent this simple
swap of goods and services saved me thousands of dollars over the course of
my lease allow me to save money while earning a low income and if you're a
homeowner then the advice is a little bit different well you probably don't
want to move out to save money even small things like turning off the lights
and reducing your water usage can lead to substantial savings over time however
the best way to offset your housing costs is to rent out a room rent a gun
room in your home can easily net you a few extra hundred dollars a month which
can help cover your bills allowing you to put more money in your piggy bank at
month's end tip number two avoid debt if you want to save money while making an
income smaller than you'd like then you must avoid debt at all costs
this is because debt deters you from saving in two ways
firstly having that means monthly repayments every month creditors will be
knocking at your door for money which if that debt was avoided would mean more
money in your pocket at month's end secondly debt is almost always
associated with monthly interest charges for lines of credit these rates are
typically around three to five percent which means that on a ten thousand
dollar balance you'd be handing over around twenty five to forty dollars a
month well this seems like a small amount of money when compounded monthly
it can begin to add up when you total the dollar value of all of your
repayments and their associated interest charges you can start to see how caring
debt can make saving on a low income a challenge this issue is only further
exacerbated when it comes to credit card debt as of 2019 credit cards calm
reports that the average interest rate on credit cards is seventeen point six
five percent meaning that getting into debt is an expensive ordeal and if
you're carrying the average credit card balance per US adult of six thousand
three hundred and forty eight dollars which at that rate means you're paying
about one thousand one hundred and twenty dollars and forty two cents and
interest charges to credit card companies therefore if you want to save
money on a low income you need to avoid debt and their associated interest
charges at all costs tip number three limit entertainment costs we all want to
have fun but unfortunately for many people this comes at a hefty cost eating
out hitting the bar after work going to the movie theater and other
entertainment purchases can make a huge dent in your budget but luckily doesn't
have to when I was younger my main source of fun was going out to the club
with my friends but unfortunately most nights were very expensive between
calving to and from the bar buying drinks and paying cover most nights
Remmy $100 easily as I got older my attention shifted towards growing my
wealth and I didn't want to lose out on social time with my friends this made me
brainstorm new ways to get in quality time with my friends while not breaking
the bank one of my favorite alternatives has been going on walks with my friends
but some other ideas i've come up with include having dinner parties at home
rather than at a restaurant and watching a movie on netflix rather than going to
the theater in short we all need to have fun but we don't
spend an arm and a leg to do it tip number four understand your wants versus
your needs there's no doubt that spending money makes us feel good but
when you're earning a low income and have a desire to save you need to be
able to donate your wants from your needs for instance you may want to
upgrade your phone to the newest model but you probably don't need to you may
want a new shirt to wear out this Friday but you probably already own plenty of
good shirts when you're not making a lot of money you have to be extra diligent
and spent only on your core expenses so how should you draw the line between
want and need items I like to classify anything that relates to my survival as
a need these are things like food clothes shelter and transportation in
their most basic form sure buying a Ferrari is transportation but in its
most basic form taking the bus also gets you from point A to point B one items
are basically anything that falls outside your needs group this includes
anything that is an extension of things you already own for example if you were
to upgrade your phone to the new model just to get a camera with an extra two
megapixels in it now of course you can't restrict your spending to the bare
minimum forever so if you do want to splurge on a one item here's what I
suggest set a financial goal you want to achieve
like saving a thousand dollars once you've hit the goal you can then go
ahead and purchase the item you've been wanting this technique is great for two
reasons first it helps you build the habit of forming financial goals and
second it gives you time to process how badly you want the item as often we
purchase things out of impulse and find ourselves experiencing buyers are more
soon after so if you want to ensure you save money on a low income you must be
able to delineate your wants from your needs tip number five spend wisely on
groceries the average amount of money a family for spends on groceries is
estimated at nearly $1,000 a month which makes it one of the higher monthly
expenses we typically incur however with a bit of planning and the strategies I'm
about to share with you it's not unreasonable to be able to cut that
number in half the first step in cutting your monthly grocery bill is to plan
your meals ahead of time this will not only be a step in the right direction
from a health perspective but it will also ensure that you only
when you absolutely need you see whether you realize it or not we waste a lot of
food a 20-18 study in science daily found that Americans waste on average
uptown to food a day which if avoided commune big savings in
the grocery department besides avoiding waste planning ahead will allow you to
buy foods that are on sale meaning that your typical $250 a week grocery bill
can easily shrink to $200 or less ultimately putting more money in your
pocket at month's end the second step in reducing your grocery costs is to eat
less meat meat is by far the most expensive grocery item you can buy it
which makes it an easy target when trying to reduce your bill now I'm not
saying you need to become a vegetarian in order to save money but by cutting
down your meat consumption or replacing it with cheaper options like beans you
will be able to cut down your grocery bill drastically the final tip that will
help you reduce your food bills is to only bring cash when going grocery
shopping all too often people find themselves at the grocery store hungry
and eager to fill up their shopping carts which is facilitated by the
seemingly endless ability to spend on credit instead plan out your purchases
ahead of time and only bring enough cash for those items you need so you don't
let your hunger get the best of you tip number 6 practice zero-sum budgeting
when practicing zero-sum budgeting you are intentionally spending every single
dollar you make but not in the way it sounds zero-sum budgeting involves
allocating your income towards each of your expense line items and in your
marking any leftover funds towards the savings or investment account let's use
an example to illustrate this budgeting method say you were earning $2,000 a
month after tax at your job using the zero-sum budgeting method you
would allocate this entire $2,000 towards your monthly expense line items
typical expenses include rent car payments gas groceries and entertainment
but using this method you would also create a line item for savings
once this listing is complete you would then allocate your entire $2,000 to the
light items which forces you to put part of your income and savings the strategy
is particularly effective for those who typically get to the end of the month
and realize they have no money left for savings but with the zero-sum budgeting
method as long as you stick to your initial budget you will be
sure to see your bank balance grow tip number seven automate your savings the
final step in ensuring you save money even on a low income is to automate your
savings one of the best things I have ever done for my finances was setting up
automated deductions from my pay with my employer in essence what these
deductions allowed me to do was send part of my paycheck directly into a
savings account instead of the full amount going right into my checking
account when I initially set up this process I allocated 10% of my after-tax
income to my savings account but over time I found that I've been able to up
this to about 20 percent and double my monthly savings now I think this savings
technique has been so successful for two primary reasons first it allowed me to
pinpoint exactly how much I wanted to save in fact by using automated
deductions you can set your deduction to the amount you have designated as
monthly savings in your zero sum budget which helps you tie the two money saving
techniques together second it took the thought of having to save off my mind
allowing me to focus on other important things like improving my skills in order
to make more money I often preach that once you have a solid savings technique
in effect that making more money is the number one way to save more and by
freeing up a mental bandwidth I was able to take on more freelance work earning
the extra income and ultimately boosting my savings thanks for watching if you
want to go from the life you have to the life you deserve then hit the subscribe
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