Do you feel like it’s nearly impossible to save money based on your current income. While saving money is much easier, when you are making big bucks. So, here I have the best proven ways on how to save money.
It is entirely possible to save money on a low-income, therefore in this article on how to save money, I will share with you seven practical ways to save money on a low income.
How to save money.
1. Lower your housing costs whether you rent or you own.
The cost of your housing will be your largest expense every month many financial experts suggests that the total of your rent or mortgage payments plus bills should be no more than 35 percent of your monthly after-tax income and while this expense eats up a lot of your monthly income, it also offers the largest opportunity to find cost reductions. Essentially allowing you to save more money even if you’re earning a lower income for renters.
There are numerous wastes you can reduce your housing costs with the first being to find a cheaper place. Perhaps a single room in someone’s house will be adequate for your needs instead of continuing to rent a two-bedroom apartment, but if you have no desire to move then it may be time to look into other ways to reduce your current rent.
Effective strategies can include negotiating an exchange of your services like doing renovations for a rent reduction or agreeing to sign a longer lease if the tenant security is what your landlord wants. when I used to rent I exchanged tax advice and monthly book keeping services for a few extra hundred rupees off.
My rent this simple swap of goods and services saved me thousands of money over the course of my lease. Allow me to save money while earning a low income and if you are a home owner then the advice is a little bit different.
Well you probably don’t want to move out to save money even small things like turning off the lights and reducing your water usage can lead to substantial savings over time.
However the best way to offset your housing costs is to rent out a room. Rent a gun room in your home can easily net you a few extra thousands of rupees or dollars a month which can help cover your bills allowing you to put more money in your piggy bank at month’s end.
2. Avoid debt if you want to save money.
While making an income smaller than you’d like then you must avoid debt at all costs this is because debt deters you from saving in two ways. firstly, having that means monthly repayments every month creditors will be knocking at your door for money which if that debt was avoided would mean more money in your pocket at month’s end.
Secondly, debt is almost always associated with monthly interest charges for lines of credit these rates are typically around 3% to 5% which means that on a 10,000$ balance you had to be handing over around 25$ to 40$ or around rs 2000 to rs 3000 a month or well this seems like a small amount of money.
when compounded monthly it can begin to add up when you total the dollar value of all of your repayments and their associated interest charges. You can start to see how caring debt can make saving on a low income a challenge.
This issue is only further exacerbated when it comes to credit card debt as of 2019 credit cards calm reports that the average interest rate on credit cards is 17.6 % meaning that getting into debt is an expensive ordeal and if you are carrying the average credit card balance per US adult of 6,348 dollars which at that rate means you’re paying about 1,120 dollars and 42 cents and interest charges to credit card companies.
Therefore, if you want to save money on a low income you need to avoid debt and their associated interest charges at all costs.
3. Limit entertainment costs.
We all want to have fun but unfortunately for many people this comes at a hefty cost. Eating out, hitting the bar after work, going to the movie theater and other entertainment purchases can make a huge dent in your budget but luckily doesn’t have to. Let’s take an example of one of my friends , When I was younger his main source of fun was going out to the club with his friends but unfortunately most nights were very expensive between calving to and from the bar, buying drinks and paying cover.
Most nights Rummy $100 easily as he got older his attention shifted towards growing his wealth and he didn’t want to lose out on social time with his friends.
This made him brainstorm new ways to get in quality time with his friends while not breaking the bank. One of my favourite alternatives has been going on walks with my friends but some other ideas i have come up with include having dinner parties at home rather than at a restaurant and watching a movie on netflix rather than going to the theater.
In short we all need to have fun but we don’t spend an arm and a leg to do it…..MORE