How to save money monthly? Check out these top 10 creative money-saving tips that will show you how to save money every month, even on a low income!
How To Save Money Monthly When You’re On A Low Income
Have you ever heard people discussing the ways how to save money monthly or how to save money on a low income? Instead, we often hear people talking about various ways to earn money.
Saving money seems to be one of the toughest jobs nowadays when most of us are already on tight budgets. Still, many say that saving money is relatively straightforward as compared to earning money.
The situation prevailing as a result of the COVID-19 outbreak has proved the importance of saving money. It shows that saving money should always be our priority to handle severe and unexpected expenses that may occur. Like the ones that we are now facing during the lockdowns around the world.
Most of us are suffering from the misconception that saving money requires significant sacrifices, which is not necessarily the case. There are numerous ways to save money monthly without making huge sacrifices.
Sometimes, one of the hardest things about the ways to save on your fixed monthly expenses is getting started. This article reveals some quick and easy ways to save money monthly that can make quite a difference over time.
Without further ado, let’s dive into the best ways to save money every month, even on a low income!
1. Set Your Budget
The first and foremost money-saving tactic is to set your budget. It will enable you to categorize your expenses and prevent you from overspending.
Your net income after the deduction of taxes is your starting point. Allocate a set amount of cash for each expense. The experts suggest using either the 50/20/30 rule or use spending and budgeting tools to achieve the saving goal for each month.
The 50/20/30 principle states that 50% of your income should go to your essentials needs, while 30% should satisfy your personal wants. The remaining 20% is the money you should save.
There is no denying the fact that your spending habits will resist your saving plan. However, you can overcome this resistance by altering your spending habits. Always analyze your flexible and fixed needs and wants to track the areas where you can improve.
The question arises what should those with irregular income do to set their budget. My suggestion is to use the average of the last six to twelve months’ salary as your starting point.
2. Automate Money-Saving Process
After setting up your monthly budget, it becomes easy for you to assess how much money you can afford to save monthly. Now, it is imperative to automate your savings to curb your spending habits because they are the biggest threat to your savings.
The automated money-saving process will save a specific amount of your income to a separate savings account. It is among the best ways to save money monthly that give you peace of mind that you are saving money without doing something special. Let the technology work for you and grow your savings with every passing month.
3. Track Your Expenses
Tracking your expenses is another of the most crucial monthly money-saving tips that will help you categorize your expenses and cut down the flexible costs from those.
The simple way to do this is to save receipts for all the purchases that you make in a month. At the end of the month, gather all the receipts and categorize them into fixed and flexible expenditures and break these categories further into needs and wants.
Fixed requirements that remain the same in all months include rent, utilities, healthcare, insurance, car, and loan payments. Fixed wants include TV subscriptions, internet, cable, premium phone services etc.
Flexible expenses vary from month to month, depending on spending habits. You can start saving for your retirement by cutting down manageable costs like smoking, drinking, hobbies, entertainment, and many more.
The experts even suggest ways to save your fixed monthly expenses by changing your lifestyle. Nowadays, you can easily track your expenses through automated software that tracks your monthly payments automatically.
4. Unsubscribe Memberships
Unsubscription from various memberships is another easy way to save money every month. Tracking your expenses will reveal this bitter truth to you that you are in the habit of spending on various memberships.
The marketing emails and text messages from the malls where you go for most of the shopping tempt you to spend money on flexible purchases. Unsubscription will stop these emails and text messages from hitting your inbox, thereby saving you a lot of money. However, these tempting emails and texts go in vain if you know how to save money while shopping.
You can also unsubscribe from the membership of various clubs to minimize costs and boost your monthly saving. Most of us pay for gym and country club memberships without using these services. Always keep in mind that you can renew these memberships if the need arises.
5. Get Rid Of Bad Habits
Getting rid of bad habits is one of the long-term money-saving tips that will have a positive effect on your health too.
Smoking and drinking are the two major evils that people are suffering from nowadays and spend unknowingly too much on these habits.
Smoking is the most dangerous of flexible wants that not only cost you a fortune but also deteriorates your health and can actually kill you. Tracking your expenses will make it clear how much money you are spending monthly on this bad habit.
A pack of 20 cigarettes (full-priced brands), including federal and state excise taxes, ranged from $4.62 in Missouri to $10.67 in New York (November 2017). This means that smokers in New York who smoke one pack of cigarettes per day would spend $320 per month and $3841 per year on this habit.
In regards to drinking alcohol, it turns out that even occasional consumption is not as harmless as we used to think. More and more scientific evidence emerges about the damage that it does to our bodies. As it’s a very expensive habit, it’s definitely one to ditch as well.
6. Reduce Your Monthly Bills
A handsome amount from your monthly income goes to pay your monthly bills.
Utility bills, especially electricity bills, are a significant expense that you can minimize by taking little conscious measures. These include insulating your house to cut down on heating and help with cooling, switching off the unused plugs and lights, and buying energy-saving appliances.
Negotiate with your service providers for phone, cable, insurance, and the internet to reduce monthly bills. Always take advantage of offers from your service providers. Many phone service providers are offering cashback rewards nowadays to maintain their database of trusted customers.
You can also reduce your monthly bills and save more money by switching to other service providers. Bundling various services together will also reduce your monthly bills.
Check out these Easy Tips and Home Projects to Help You Save Money for more great ideas.
Similarly, you can reduce your monthly expenses by buying the right car for daily usage. Always buy a vehicle with long life and better gas mileage in order to reduce your maintenance costs.
7. Change Your Lifestyle
Many people ask how to keep your money safe from yourself. The simple answer to this question is to change your lifestyle because most of your expenses are due to a specific lifestyle. Your lifestyle changes may reduce your utility bills and enable you to save more money monthly.
Stop going out for dinners and start eating homemade meals instead to save a considerable amount of money. Take your own lunch to work.
Avoid going to markets and shopping malls for purchases other than groceries. If possible, shop online and try to save money by sticking to the list of items that you really need and offers available there.
If you own a big house, move into a smaller one, and rent out the other one to increase your monthly disposable income.
Alternatively, you could rent a part of your house to make some extra income. You could either take in a permanent tenant or make a part of your house available to rent by tourists via Airbnb.
Learn simple DIY techniques to maintain your home and save money on paying others to fix things that break.
Opt for buying used gadgets to satisfy your needs along with saving money. If you insist on having a new cell phone, always go for an older model.
Go for supermarket own brands in terms of food and save money on clothes. Check out my previous post “How To Be Stylish On A Budget” to learn the top 10 smart ways to save money on clothes.
8. Build Emergency Fund And Set Saving Goals
One of the best ideas on how to save money monthly is to build an emergency fund and set a savings goal. The experts suggest that keeping six months’ worth of living expenses is always wise to fight unfavorable circumstances and face emergencies.
Saving money after setting saving goals helps you to keep the picture of your goal in mind and keep you motivated. If you are saving for an emergency, keep this amount safe for it.
People who were in the habit of building emergency funds are living a comfortable life in the circumstances prevailing as a result of the COVID-19 outbreak.
And, if your saving goal is to buy a home or pay for a wedding, then keep that goal in mind. The use of a savings goal calculator is a handy technique to calculate the time when you will be able to save the specific amount of money set in your savings goal.
9. Use Cash For Purchases
Markets and shopping malls are among the ideal places to save money. But, it is possible only if you start using cash instead of your cards for expenses.
It is pertinent to mention that you cannot make all the purchases using cash and you will have to use your cards in some instances. For example, you cannot pay your mortgage/rent or utility bills in cash.
Groceries and entertainment, however, are the two major expenses that should be always paid with cash. You can also use cash to buy clothes and food.
Using cash for purchases will make you more aware of your spendings and enable you to make wise decisions. In simple words, using cash will place a harder limit on your spending.
10. Earn Extra Income
You can also boost your monthly savings by earning extra income. You can sell things to make money or start a side business to increase savings.
Make sure to go through your belongings from time to time to decide which items you could sell to make money. This includes clothes, electronics, unwanted gifts, furniture, collectibles, etc.
You could also earn some extra money by selling DIY crafts or make money online by completing surveys or starting a blog.
Check out these 50 ideas for a lucrative side hustle by Entrepreneur for more inspiration.
I hope this article has inspired you to start saving money every month.
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