When you’re living day-to-day on a modest income, it can feel impossible to make significant progress with your savings account. This can become frustrating if you’ve got financial goals like buying a car or putting down a house deposit, but there are ways to increase your savings quickly while you’re not earning a lot.
The key to fast-tracking your savings is working out how to budget and save money on a low income. Here are some of the ways you can make this easier for yourself.
Change Your Mindset
The first step in changing your savings trajectory is to change your relationship with money. This isn’t always an easy step to take, but it’s important if you really want to discover how to save money fast on a low income.
It’s all about making this firm commitment to yourself, your family, and your bank account: you will not indulge in unnecessary purchases until your savings hit the next milestone.
Note that we say the next milestone (not your final goal). This is because it’s unrealistic to cut off all your leisure spending indefinitely until you reach your ultimate goal. It’s important for your long-term motivation to set milestones along the way at which you might reward yourself for your progress. And that’s where the next tip will help…
Make a Budget
This advice appears in just about all our posts about saving money, but there’s a good reason for that. Without a written budget, it’s impossible to even track your savings goals – let alone achieve them.
Depending on how your salary or wages are paid, you might choose to map your budget out weekly, fortnightly, or monthly. Either way, insert your income and all ongoing expenses (e.g. rent, bills, groceries) to see what your usual balance will be. From there, you can make the appropriate decisions about where you might be able save money on costs or cut down on discretionary spending.
Save on Household Bills
Some utility providers will offer payment plans for customers on low incomes. Speak with your electricity, water, and/or internet company to see what options might be available to you.
Aside from that, there are plenty of nifty things you can do to reduce your expenses on many of your regular bills. Try these articles for specific ideas:
Automate Your Savings
When you manually move your income into your savings account every time, it becomes every easy to skim some cash off your transfer or even forget altogether. However, if you set up an ongoing automated transfer every week, fortnight or month, this will ensure you always have a consistent amount of money going into your savings account.
Stay Out of Debt
Sometimes taking out a loan or using your credit card is your only option. But unnecessary debt can prolong your journey to financial freedom, so only fall back on these options when you really must. And when you do, consider choosing an option that you can pay back rapidly, such as a quick cash loan from Cigno.
Repayments can take a big bite out of the money you set aside for savings on each payday, so sorting out your debts is an essential step in getting your finances back on track. In fact, you may even be better off using any extra money to pay off debts early rather than putting it into your savings – just watch out for any fees for advance payments.
Earn Extra Money
One way to save money fast on a low income is to earn more money in the first place. Of course, you can’t magically turn a low-income job into a high-paying gig overnight. But what you can potentially do is pick up a side hustle to supplement your pay. From money-making apps to selling items online, here are some ideas to get you started.
We hope these suggestions have helped you work out how to budget and save money on a low income. Just remember there are always options available to you, and some smart choices and small sacrifices can make a big difference in the long run.
Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.