How to save money—it’s probably the biggest challenge for all of us, whether we have a low or high income.
The money you’re saving on a low income might be more than a rich man’s savings by the end of this year.
You’re probably wondering how that is possible—it is.
There are too many people failing to manage their finances, and it’s not because of a lack of an abundance of money. It’s simply because man must know thy money, and they don’t.
Luckily, we’re here to help you know yours so you don’t end up as one of them.
Make a budget
You must’ve been told this every time you’ve looked for money-saving solutions. There’s good reason for that—it is the most important step to saving money. Making a budget and following it will make all the difference you need to save money faster.
Prioritize your spending and divide it into essential and non-essential categories. Every necessity you need to pay for like housing and groceries should be in your essential tab. The rest could be labeled as disposable/non-essential spending. Writing it down will help you understand the flow of your money and find its loopholes. You may still be subscribed to a service you don’t even need anymore!
If you’re struggling with the what and how of things, you can always start by making a personal budget to get you rolling!
Allocate yourself an allowance
If you’re too stressed out from not saving enough money and decide to have a free-spending month to relieve that stress, you’ll only end up with more money problems.
A better way to accommodate both your spending on entertainment and savings at the same time is to provide yourself a monthly allowance and stick to it. It would be better to stop spending on entertainment and save more, but that would become counterproductive if it makes you mentally exhausted.
So go ahead and spend for your joy, but spend mindfully. The other small chunk of money you’re saving will eventually become a bigger sum as long as you save it and do not spend it on impulse.
Change your habits
Are you the type to wake up late, make a run for work, and grab some coffee and breakfast on the way while you’re at it?
There are many people like that and if you’re one of them, it’s time for a change.
Statistics have shown that the average cost of eating out for breakfast/lunch was $1,043 per year in 2015! Can you imagine how much it has increased after these years of economic inflation and how much you can save per year by making your breakfast and lunch?
The answer is a lot. Let’s suppose your daily coffee costs you $3 a day, that’s $90 a month. In contrast, a bag of the good-quality coffee mix can cost as little as $16, which can last you longer than a month.
Do you see how much you save there?
This can apply to many other things that we can easily DIY at home but we choose to buy elsewhere.
Build a source for passive income
A side hustle, we call it these days.
We know it’s easier said than done. However, the benefits of having one will outweigh your struggle in no time. Actually, it doesn’t have to be a struggle at all. Do something you enjoy. It can be a skill you’re good at, like drawing, painting, writing, tutoring, babysitting, walking pets, or anything that doesn’t tire you out like a 9 to 5.
Do it on weekends to unwind from a mundane routine. Or daily at a specified hour. Whichever it may be, use your hobbies or skills to help you increase your overall income. It has become much easier to seek such opportunities in today’s era, so make sure you do!
Switch to better options
There are always better options, whether it’s an electricity provider, an internet provider, an insurance company or otherwise. If you ever find yourself paying too much for a low-quality service, start looking for a better option. The market is extremely competitive for most of our day-to-day services, and there’s a huge possibility you’ll find the same or better service at a lower cost. So keep your channels open and stay on the lookout.
This also applies to all of your everyday ventures. When doing groceries make a list of things you’ll need for the whole month and that are easy to store. Buy these things at wholesale prices, which will collectively save you a considerable amount. When shopping for clothes and accessories, use coupons and special offers or end-of-season sales to buy your favorite items on a budget.
Let go of the consumer mindset
The biggest reason for all of us having a hard time saving in the 21st century is the consumer mentality. It’s not a recently discovered phenomenon. In fact, the consumer mindset has been chasing our wallets for the past seven decades. Even now, you might be considering buying that newly released pair of jeans even though you have three other similar pairs in your closet already. The culprit is consumer mentality.
Consumer mentality is exactly that desire you feel about buying and owning material things just because others have them.
If you’ve become aware of it, letting go of it will truly help you reach your savings goals. The most successful people know how to manage their money without falling into the consumer trap. That does not mean you should stop spending money on things you like, just make sure you don’t like them because you were told to. That could take a heavy load off your wallet.
Saving money isn’t easy for any of us, especially on a low income. But as long as you’re making an effort and implementing the ideas on this list of how to save money, you should see a substantial increase in your savings over the coming months. You can try and see for yourself.