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Saving can feel impossible on a low income.
How are you supposed to put money aside for the future when you can barely afford the present?
While it might not feel like it, we’re happy to let you know that it is actually possible to build your savings on a small income.
You might not be aiming for a house deposit, but even putting away enough for small emergency fund will put you ahead of the game in the future.
Whether you’re currently studying, on maternity leave or simply stuck in a job that doesn’t pay you well, Cashrewards advocate, money expert and the founder and CEO of Smart Women Society (SWS) Téa Angelos shares exactly how to save on a small income.
Start Small
Téa advises those with a low income to start by saving small amounts.
“Don’t be discouraged—small amounts each week add up significantly,” Téa explains.
“Savings $20 a week will give you over $1,000 in savings in a year. Saving $60 a week will give you over $3,000 in savings in a year.”
Automate Your Savings
Automating your savings will keep you accountable. Even automating 25 dollars (which you were probably going to spend on Uber eats anyway) will give your account a boost.
“Set up an automatic transfer to your bank account the day after your payday,” Téa says.
“The best part about this is the saving happens without you having to think about it and before you can spend it!”
Don’t Try To Keep Up With Your Friends
Téa says that trying to keep up with your friend’s financial situations can really impact your own.
“Money should not be a contentious point in your friendship. There should be no pressure to ‘keep up’ with each other or constantly compare your circumstances to your friends,” Téa says.
“Strong friendships respect each other’s unique circumstances, openly communicate when something is out of budget, discuss their financial goals and support each other to achieve these goals.
Creating a safe space for everyone to share their financial journey and voice when something is not in their budget is key.”
Consider Your Spending Habits
Even if you don’t think you’re spending a lot, you might be surprised by where the bulk of your money is really going.
Téa says to start by tracking your spending for a month.
“This will help you really understand where all your money goes every month, allow you to reflect on your purchases and decide if they were necessary.”
After this month, it’s important to continue to keep an eye on your spending.
“Regularly review your subscriptions and memberships and cancel any you don’t use. Similarly, regularly review your bills and see if you can get a better deal.”
When purchasing something fun, Téa says to “wait 24 hours before you buy anything non-essential to avoid impulse shopping”
Create A Budget
Téa believes that a budget is essential for absolutely everyone—regardless of your income.
“I want to remove the negative stigma around the word ‘budget’—it’s almost like a dirty word. But really, a budget is just a plan for your money, it doesn’t mean that your life is over
and you can never leave the house again or you’re boring.”
“You can have a budget and be good with your money and still live your life and have fun—they aren’t mutually exclusive concepts.”
Take Part In A Savings Challenge
If you need some extra motivated to get started, why not try a savings challenge?
These challenges help you progress towards a savings goals by saving different amounts here and there.
“Every time you transfer an amount to your savings, cross off the box. You can make it more fun by doing the challenge with a friend—this will help you stay more accountable to stick to it.”
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