When I was trying to save money on a low income, it was really the little things that added up over time to make a big difference. Being resourceful guided my approach to money saving tips.
By the time I was 21 I managed to save around $10,000, all while earning way under the median salary. It might sound extreme or impossible, but it’s definitely feasible for almost anyone.
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1. You Don’t Have to like Your Job
If you’re at a job that you don’t love, you’re not alone. Many of us find ourselves in that position, feeling like we don’t make enough money. However, having a job you don’t love can actually be a good thing.
It can serve as motivation to seek something better, rather than resigning yourself to a life of dissatisfaction. Take it as an opportunity for growth and learning.
2. Reduce Expenses
My first step towards saving money was reducing my expenses. I couldn’t immediately increase my income, so I focused on cutting down costs and building up an emergency fund.
As I was getting older I realised the importance of having an emergency fund. If you want to learn how to start building one too, follow my Payday Routine: 8 Steps you Need to do on Payday.
Rent hacking was a game-changer for me. I will go into more depth in the next step but by renting out extra space in my home, I covered my expenses and significantly boosted my savings rate.
3. Rent Hacking
Housing is usually going to be your biggest expense. If you want to start saving money, first focus on the things that cost you the most amount of money each month.
One way to do this is a method called ‘rent hacking’. Rent hacking is the idea of renting out your place that is perhaps a little bigger than you need.
For example if you live on your own or as a couple and have a spare bedroom or two you could rent these out to other tenants. This way you could potentially cover all of your housing expenses by the rent collected from your tenants.
By implementing short-term sacrifice of sharing your space, alongside these other money saving tips you could potentially save tens of thousands in a far shorter time frame.
4. GEO Arbitrage
Similar to step number 3, this one’s for families! If you’re living with your family, step 3 might not be feasible for you. However, it doesn’t mean you can’t trim your housing expenses.
You might need to consider GEO arbitrage, a short-term solution involving relocating to a less desirable but more affordable house or area. This move could potentially save you 20-30% on housing costs.
Another option is renting out a duplex or attached in-law unit in your current home.
5. Happiness is Important!
One of the key factors in achieving greater happiness is reducing stress levels.
Nobody wants to feel trapped in a job that causes constant unhappiness or where they face daily confrontations with a difficult boss. Eventually, it becomes imperative to break free from such situations and pursue work that brings you joy every day.
It’s important to recognise that true fulfillment isn’t solely determined by income level; rather, it’s about reclaiming your time for yourself and your loved ones.
6. Take Action
Saving money starts with taking action. It’s not enough to watch videos or read books; you need to implement changes in your daily life.
To begin with, think about small adjustments you can make, like bringing your own lunch to work or cutting out unnecessary expenses. If your stuck for ideas, check out the 21 Things You Should Never Waste Your Money On this year.
7. Excuses
It’s easy to come up with excuses for why you can’t save money, whether it’s kids, partners, or other reasons such as your job etc.
Instead of giving in to defeat, challenge yourself to find solutions. Ask how you can cut expenses or increase income, rather than accepting your current financial situation as your permanent lifestyle.
8. You Can’t Have It All
Remember, you can’t have it all. Sacrifices may be necessary to achieve your financial goals. Cutting back on luxuries and unnecessary expenses can lead to greater financial freedom and less stress in the long run.
In ‘Rich Dad Poor Dad‘, I learned that the initial focus should be on building income-generating assets such as stocks or property. Then, you can use the income generated from these assets to afford luxuries. Here are my 9 Must-Read Books That Will Make You Rich this year!
9. Starting a Side Hustle
Sometimes, saving money isn’t enough, and you need to find ways to earn more. Consider taking on side hustles or additional jobs to increase your income. These sacrifices may be temporary, but they can have a lasting impact on your financial situation.
Curious about starting side hustles? Don’t worry—I’ve got you covered! Explore my three beginner posts dedicated to starting side hustles:
- 5 Ways To Make An Extra $1000 A Month
- The Best Low-Cost Online Side Hustles for Students
- 6 Ways to Make Money Online While Travelling the Globe
Conclusion
Saving money on a low income requires dedication and perseverance, but it’s entirely achievable. By making smart financial choices and taking proactive steps, you can build a secure financial future for yourself, regardless of your income level.
So, keep striving, keep learning, and keep saving. Your future self will thank you for it.
The information provided in this guide is for educational purposes only. Any actions taken based on this information are at the reader’s own risk. It is advisable to consult with relevant professionals or advisors for personalised advice.
