Cultivating a good saving habit can be tough but doing that on a low income is so much tougher. However, while this can be discouraging, remember that no amount is too small to be saved and the usefulness of saving can never be overemphasized. Ideally, 20% of our salary should be saved. You can still set a savings goal and reach it. The best trick to cultivating a great savings habit is always to find a motivation to save money for the future. Once this is done, you can consider the following tips we have highlighted to help you save more effectively.
1.Make A list:
Having a list will help you visualize very vividly what your new month expenditure will look like. Having made a list of your essential needs, the next step is to prioritize. Having a low income may be inhibiting and sometimes one may not achieve all they want. The trick is to prioritize and solve the most pressing needs while saving the others for later.
2.Set a Spending Goal:
When your 20% has been saved, and your essential needs taken care of, divide the remaining amount of money available by the number of weeks till the next pay day. This is typically 4 weeks. With this as a guide, set the resultant amount as your spending limit per week. Food spending is most likely to wreak havoc on your budget if it is not properly managed.
3.Set a Food Budget:
Within the first few weeks after payday, there is usually an overwhelming temptation to treat yourself to a sumptuous meal at a cozy restaurant. When this happens twice or thrice, setting a sustainable food budget till the end of the month becomes almost impossible. It is advisable to look for means through which you can cut your restaurant spending and the most effective one is through home meal planning.
4.Take Advantage of Fee Free Savings Accounts:
Typically, the bank deducts several fees from your savings as charges for different purposes. However, fee free accounts still exist. As a low-income earner, it is important to create and operate these types of bank accounts to enable you have all the funds you can available to you.
5.Be Resourceful:
While saving on a low income is a very tough challenge, a hard truth is, that low paying job may not be around forever. In this case, being resourceful is a lifeline. Do not settle. Keep looking for a better paying or multi streams of income to widen your financial capability. This may come with a “time” challenge. Uhn huh! This implies that you may not have as much time to play with as those who earn higher. Spend your free time searching for a better job or an alternative stream of income.
6.Reduce Entertainment Cost:
We all know the saying that “all work and no play makes Jack a dull boy”. Well in this case, Jack does not have so much money and time to spend on playing. That notwithstanding, some sort of entertainment is mandatory for a proper work-life balance. Three very useful tips here are to find free entertainment opportunities, very affordable entertainment or create an entertaining opportunity for yourself at home.
Bottom line is, cultivating a fantastic saving habit with a low income is very possible. However, it requires more determination and a higher level of discipline. We hope these tips have helped you on your journey to financial freedom.
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