Saving money becomes the top most priority when the income graph is going down. Unfortunately, this has become pretty common for most people in these tough times. World economies are heading for downturn, economists are predicting an economic recession.
Well, you may not stop the global economic recession, but you can sure guard yourself from the storm by following few simple methods. You have trust these 10 money saving methods as it has helped me when I was going through hard times. No, I won’t suggest the “increase income by doing side-hustle” BS. Those side hustles seldom work and most of them are either scams or the payout is outright awful.
Enough talk, if you’re ready…let’s dive in.
I have one request though! Should I start a free email service? I’m asking you because you matter the most. Please comment down and I’ll start one.
(1) Track Expenses
Regularly tracking your expenses is one of the best way to monitor your spending. Expense tracking also helps you with saving money, especially when your wallet is a bit tight. An another benefit of tracking your expenses is budgeting. If at the end of a month you learn how much you’re spending, then it’ll hugely help you in formulating a budgeting plan.
Honestly, expenses tracking is only the beginning. It only helps you learn how much you’re spending and how much you should/can. Unsurprisingly, without tracking money outflow you’ll inevitably face problems in budgeting. And in return, that will also make it almost impossible to keep a check on unnecessary expenses.
Once you’ve made a list of all the things you should spend money on, and the things you should stop spending, it’s time to make a strong budget. How you budget will decide how you saving money and how you spend.
(2) Budgeting
Budgeting is THE most important aspect of saving money. And it becomes even more essential with low income. As I briefly mentioned before, with a good budget you can literally change your life even if you’re living paycheck to paycheck. How? By following the process of elimination.
Yeah, it’s a bit wordy, but the so-called “process of elimination” is nothing but removing the things that you don’t need. You can either replace them with something else or let them be as it is. When you’ll create your own budget, you’ll automatically feel that you’ll eliminating things more than adding. In the end, you end up replacing the expensive things with their cheaper alternative.
Decisions like not going to movies and eating at restaurants is also one of the major budgeting decisions that most people take while trying to save money. Try this for yourself and you’ll automatically see a difference.
(3) Cut Unnecessary Expenses
I know you have created the best budgeting list. But still, have you cut unnecessary expenses? How far have you gone? See, I’m not asking you to deprive yourself with something that you really need in life, but you sure can take cost-cutting measures when financial situation is fragile.
Saving money and cutting unnecessary expenses are the two pillars of savings money with low income. I won’t talk about growing money in detail here as it’s not the topic, but investing is the central pillar of a sound financial decision.
Anyways, if you’re regularly cutting unnecessary expenses, and investing it in the right place, you’re already doing far better than most people out there. Keep doing it, and you’ll never face any financial issues in the future.
(4) Explore Low-Cost Alternatives
I’ll be frank here… I feel a tickling sensation when I find a low-cast alternative to an expensive item. It rushes me with a sense of adventure. Discovering low price alternatives feels like finding a goldmine in the midst of Sahar desert. So, now that you’re saving money, how about you try your luck on exploring low-cost alternatives to the more expensive products you usually use?
For example, SEMRUSH is a powerful software, but too expensive for smalltime website owners. Years ago, I had to face the same issue. That’s when I found Keyword.io. The free version does the job great. Yeah, it’s not as powerful as SEMRUSH, but more powerful than simple Google search suggestions.
In your case it can be anything else. Either it’s clothing, or grocery store. Initially you might have to research harder, but once you get a hang of it, you won’t have any issues saving money.
(5) Build Emergency Fund
This section is a bit different. Building an emergency fund is like saving money for unsuspected hard times. In these times of major uncertainty, it has become even more crucial than before to build an emergency fund. Put aside a small portion of money every month. Treat the money as something you won’t get access to. Ever. Hope that you won’t ever have to use money from emergency fund.
Building an emergency fund is nothing but an effort to increase financial security. By regularly saving money in your emergency fund, you gain peace but thinking that no matter what happens, your emergency fund has got your back.
I started creating my own emergency fund years ago after I felt a strong urge to do so. Back then, I didn’t know a lot about finance as such, but for some reason I felt a strong intuition to save money for adverse situations.
(6) Diversify Income
Isn’t it a great feeling when your income goes up? You know what’s better? When you have multiple such income sources. You’ll rarely find a person who only have one job nowadays. It’s nearly impossible to stay depended on just one job.
Hence, one of the best way of coming out of the low income trap is by exploring more income sources. If you try other ways of making money, you become open to opportunities, which in turn bring in money. And, you know what happens when you make more money? You save more.
Put more effort into diversifying your income. Try offering your experience as a freelancer. Nobody knows how successful you can become if you keep on trying something new. Yeah, this suggestion is kinda different than others, but I strongly feel that everybody should come out of this low income trap.
(7) Learn Finance
You cannot operate in this world without knowing finance. I did a personal research and tried to find similarities between famous Billionaires, Millionaires, CEOs and well-known businessmen. Although I found several things common in them, one particular thing intrigued me: Most of them are voracious reader. They have probably read every finance there is in this world. They are always hungry to learn something new.
Always learning help them stay one step ahead of the competition. And all these great suggestions they learn help them in taking critical decisions easily.
I won’t lie, I have only read a handful of finance books, but they have changed my life completely. Learning finance may not help you immediately, but it has major good side effects. Earlier you might have taken finance decisions just on a whim, but reading books will help you think twice before making the next move. Hence, learn finance and push your earning higher.
(8) Use Public Transport
Do you own a car and use it for even the most trivial tasks? If yes, then it’s time you decrease using them and opt for public transport. Public transport is always easy on your pocket and you don’t need to think about the gas prices. The power of budgeting comes in handy here.
How much money do your spend refueling your car? Does it make into the top 5 most money spenders? If yes, then switching from your personal car to public transport will have a major impact in your budget. On the other hand, if you seldom use your personal vehicle and opt for public transport, then you’re already doing well.
Nice! You have opted to use public transport, and use the extra money for savings. But that’s not enough! Enter Thrift Store products…
(9) Shop From Thrift Store
I suppose you know what are thrift store? You can buy second-hand items at lower prices. The items are usually donated by people who don’t need them anymore. Fortunately, the good thing about thrift store products is their quality. Although the products are second hand, they are in good condition. Good enough for anyone to wear.
You can opt to buy things from thrift store when you’re so hell-bent on saving money. I have wore thrift store products before when I had no option. But, I thing it’s a choice. I have seen well-off people buying from thrift store, and actually enjoying the quality.
So, if you want to take the saving money challenge one step higher, then let it be this one.
(10) Automated Savings
Banks and financial institutions have this great option to automatically save a portion of your income every month. I urge you to use Automated Savings. You might have heard this famous quote: Money has wings. It never sits at one place. Hence, if you don’t automatically save money, you’ll find reasons to spend it. You might end up buying things that wasn’t necessary, or something that you could have bought it later.
How to decide how much money you should autosave? It’s simple. apply the 70/30 rule. Either spend 70% of your savings and save 30% of it every month, or the vice-verse. Well, I don’t know whether you’ll survive by saving 70% of your monthly income and only spending the remaining 30% when your income is low, but it’ll be incredibly fruitful if you can do it.
I am a firm believer of Automated Savings and have saved a lot as emergency fund by following the 70/30 rule. I did it when my monthly income was abysmal, and I still do it when I’m making more than what I can spend.