When you’re living on a small income, it can be especially hard to save money for things like an emergency fund, college, retirement, cars, or anything else. We all have our lean times financially, but even in those lean times you can still find ways to save money for the future needs of you and your family, such as college and retirement. I truly believe that even if you have a low income, you can still save money if you’re diligent about the process.
* Evaluate Housing Costs
Many times it’s difficult to save money because housing costs take a huge chunk of the family budget. In general, it’s best to keep housing costs to 25% of your take home pay or less. If you’re single, you can even take in a roommate or two and charge them rent to save money on housing costs. And the saved money you can put straight into investments.
* Plan Your Shopping
Never spend money on a whim or just because you ‘feel like it.’ The best way to spend a limited income is to plan your shopping ahead of time using a written budget every single month. That way, you spend your money on paper before you spend it in real life. When it comes time to buy what you need, you will already have a plan in place and you won’t overspend because you only have so much allotted for each category.
* Buy Used Stuff
Buy everything you can used, such as used cars, used electronics, used furniture, clothing, etc. There are incredible deals out there for most anything you want or need, you just have to know where to look.
* Don’t Use Credit Cards
Studies have shown that you spend 12% more on average because using plastic is such a smooth and friction less way to spend money. Your best bet is to go cash only and use cash in an envelope system along with your monthly budget.
* Sweat The Small Stuff
Take your lunch to work, plan to do your errands all at once to save gas instead of making multiple trips. Save your change and cash it into an investment account periodically. You will be surprised how much you can save when you get creative.