Career Advice Finance Guide

How to Save Money When Earning a Low Salary

By: Charlotte Couch
Dec 15, 2020 • 6 min read

How to Save Money When Earning a Low Salary – Your Guide to Financial Independence. 

In general, you should try to start saving money as soon as possible. Even saving just $5 a day can help you become financially healthier. However, following this general principle can be difficult if you’re living on a low salary. If you are also paying off student debt or other loans, this can further complicate your budget. In this blog, well review some tips and tricks for saving money on a low salary! 

fan of 1 US dollar banknotes and coins on beige surface

1. First, Examine Your Spending

Before doing anything else, you should take a close look at your spending habits. What are you spending the most money on? How much do you spend on take-out or recreational activities? Those costs can add up pretty quickly if you aren’t careful. By examining your spending habits, you can figure out what you need to cut back on to save more money.

2. Pack a Lunch Instead of Going Out

Unless your company serves catered lunches or offers a meal stipend, you’re on your own when it comes to lunch. Luckily, packing a lunch can actually save you a ton of money. According to Money Crashers, you can save around $100-$200 a month.

Eating or ordering out typically comes with extra costs. If you have to get the meal delivered, you will have to deal with the delivery fee and tip. Save your cash for something like an A.C. unit or your emergency fund instead, and enjoy a nice home-cooked meal instead. 

muffin on yellow plastic container

3. Automate Your Savings

Saving money can be difficult, especially if you are dealing with a low salary. By automating your savings, you are adding them in as a regular monthly expense. Some people do this by enrolling in their company’s retirement plan. This can be especially beneficial if your company matches contributions. You’re basically getting “free money.”

Automated savings tools like Albert and Stash can also help you save without thinking about it. For instance, Albert offers a Smart Savings feature that automatically saves a certain amount of money that takes your current savings and spending habits into consideration.

4. Find Free or Cheap Entertainment

With restaurants and bars shutting down again, we don’t really have to worry about dining out or Ubering as much. That said, it can be hard to entertain yourself at home if you don’t have much to do around there.

Thankfully, hundreds of organizations have begun offering at-home classes, tours, and more for people who are bored at home. Museums like the National Museum of Natural History and the Louvre can be toured for free online.  

how to save money

5. Try Couponing

Couponing can actually be kind of fun. Who doesn’t get a bit of an adrenaline rush when they get a great deal? To get started, you’ll need a printer to print online coupons. If you don’t have one, you can download a cashback app on your phone instead.

Set aside a couple of hours each week to search for coupons. Coupon websites, newspapers, flyers, and apps are great resources. Once you finish collecting them, we recommend organizing them in a binder. Pro tip: make sure you put the coupons with the closest expiration dates first.

6. Start a Side Hustle

Some people make $1,000+ a month with their side hustle. Depending on what kind of side hustle you choose, it might take a while before you start seeing four-figure paychecks. But if you have the time and passion, it is possible to build a lucrative side hustle while maintaining a full-time job.

Dropshipping has grown in popularity. However, some ethical and legal grey areas come with the territory. Affiliate marketing is another lucrative side hustle. However, it can take a while to see high returns.

Other side hustles you could try include:

  •     Freelancing through Fiverr or Upwork
  •     Blogging
  •     Virtual assistant work
  •     Food delivery through Postmates or Doordash

brown paper bag on gray concrete floor

7. Follow a Zero-Sum Budget Plan

When following a zero-sum budget plan, your goal is to make your income minus your expenses equal to zero. If you have a monthly income of $3,000, your expenses should total $3,000. This gives every dollar you earn a specific purpose, whether for groceries, streaming services, or savings.

To make sure you are following your plan, remember to log all of your expenses throughout the month. Some apps like Albert and Mint automatically do this and can even warn you when you’re overspending.

8. Live With Roommates

You can save thousands of dollars on rent and utilities by living with roommates. If you happen to know anyone who also needs a roommate, great! You don’t have to worry about searching for roommates online or through mutual friends. If you don’t know of any possible roommates, you can search on Facebook Marketplace as well as other sites to find a compatible person to live with. 

how to save money

9. Track All of Your Expenses

Being mindful of how much money you spend and what you spend it on can prevent you from making rash or poorly thought out purchases. Some people like to manually enter their expenses into a Google Sheets or Excel document. Others prefer using automated apps to help track their expenses.

10. Try the Cash Envelope System

Another popular savings method is the cash envelope system. Let’s say you want to budget $200 a month for dining out. You would take out $400 in cash and tuck it away in an envelope. Whenever you dine out, you can only use money from the envelope. Some people use this technique to track all types of spending, not just ones where they tend to overspend or need to watch closely.

Saving can be hard. If you’ve never followed a savings routine before, it can sometimes be difficult to start one. However, by tracking your expenses and creating small savings goals, you can put yourself on the road to great financial health! What savings tips do you enjoy following? Let us know in the comments below!

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