How to save money on low income minimum wage?
When you are on a low income or minimum wage, getting by every month is already hard enough on its own, let alone saving some money. You may feel helpless and it may seem like saving money is close to impossible to do. So you might be asking, “How can I save money on a low-income or minimum wage?” Is it even possible in the first place?
As someone who also earns a low income, let me tell you that it is possible to save a lot of money even on a low income or minimum wage. All you have to do is follow the 5 tips in this article.
1. Start by creating a budget and tracking your expenses
This will help you understand where your money is going and identify areas where you can cut back. A good budget plan to follow, which a lot of personal finance experts recommend is the 50/30/20 rule. This means that 50% of your money goes to essential needs such as rent, transportation, and food, 30% goes to your wants, and 20% goes to savings. Of course, this is not a law and can be customized depending on your personal circumstance. I for myself tweaked this to 50/20/30 which means only 20% goes to my wants and 30% goes to savings.
2. Pay yourself first
The mistake that most people do is that they wait for the end of the month and only save the money that’s left. But what if there’s nothing left at the end of the month? Then they also don’t save anything for that month. Sounds familiar? Well, this might be the situation you always find yourself in.
Paying yourself first means that once you receive your paycheck, immediately save the amount that you want to save based on the budget that you made from step 1. By paying yourself first, you ensure that no matter what unnecessary thing you might spend on, you have something already saved up. The truth is, most of what we spend on are not really necessities. Take for example—do you really have to buy soft drinks when you need to eat your meal? Do you really need to go shopping at the mall every Sunday? These types of expenses are not really necessities and can be avoided or minimized by forcing yourself to save the money at the start of the month. How? By paying yourself first.
3. Identify all your fixed expenses and look for ways to reduce them
Examples of fixed expenses are rent or cell phone plans. You can save money by reducing your fixed expenses such as by finding a cheaper apartment to rent or switching to a cheaper cell phone plan.
4. Cut back on discretionary spending, such as dining out and entertainment
Instead of going out to expensive restaurants or cinemas, try to find free or low-cost activities to enjoy, such as cooking your own food or watching movies at home. This way, you get to enjoy good food or movies without breaking the bank.
5. Use cash instead of credit cards to avoid overspending and accruing debt
Credit cards are the most convenient way for banks to enslave people into a debt trap. By using cash instead of credit cards, not only are you more aware of your spending, but you also get to avoid paying interest.
Saving money can be a challenge, especially on a low income or minimum wage. But by following these 5 tips on how to save money on low-income or minimum wage, you can save a lot of money and improve your financial situation. It may take some time, effort, and discipline, but the rewards will be worth it in the long run.
