How to Budget and Save Money on a Low Income

Surviving on a low income isn’t easy in times when the cost of everything is rising faster than the average wage. Financial obligations can be frustrating and fraught with uncertainty even with proper money management, while saving money can seem almost impossible during lean times. People who want to budget and save money on a low income do have options, but creative thinking is required and diligence is essential.

For those on a low income, the adage ‘a dollar saved is a dollar earned’ rings true. In many cases where money making options are limited, saving money is the alternative that will help strengthen finances. Turning the corner toward financial freedom takes time, but a more comfortable financial situation is immediately attainable by making a few simple changes that won’t dramatically affect living circumstances or lifestyle choices. Here are some ideas for saving money on a low income.

Housing affordability adjustments

Whether owning or renting your home, housing costs are a major factor in family budgeting. When preferable, housing costs should be kept below 30% of take home pay, although in the present economic environment this can be almost impossible, especially in major cities. If you are renting and have a small household, it’s worth considering downsizing if the necessary compromises are acceptable. If you are an owner or renter with a spare room, taking in a boarder or flatmate to share expenses is another alternative that will put money straight into your bank account savings fund.

Planned shopping with shopping list and budget

Money can be squandered when it is spent whimsically. Using limited income wisely is an essential money saving strategy, with no better example than regular supermarket shopping. With a little discrimination and an eye for value, loads of money can be saved, especially when purchasing for larger families. A budgeted shopping list provides the diligence and determination required to resist temptation and save money, while also facilitating the creation of a healthy meal plan that will benefit the entire family. Frugal shopping generally results in more nutritionally valuable purchases at the expense of unhealthy, expensive junk food.

Join the ‘used stuff’ revolution

It’s difficult to keep pace with the latest expensive luxuries and gadgets even if you can afford them. Fashions change as fast as seasons these days, and maintaining status can be expensive and wasteful. People on low incomes are the beneficiaries, acquiring used items in ‘as-new’ condition for a fraction of the price. In addition, a drive around any reasonable suburb during ‘council collection’ week will also disclose an abundance of furniture and household goods that are free for those who aren’t too proud to stop and look. Online bargains abound and charity stores continue to fill the void for bargain hunters everywhere.

Clear credit card debt

Credit cards are an extremely handy device when they are backed by sufficient wealth, but they tend to keep poor people poor. It’s been revealed that the effortless nature of spending with plastic increases expenditure, and that’s even before credit card interest and fees are taken into consideration. If credit cards are dragging your finances down, it’s best to avoid them for a time and use cash whenever possible.

Make small changes that add up

There are choices in the way we do almost everything. Dedicated saving can involve taking lunch to work, co-ordinating shopping and errands to save on fuel costs, keeping loose change and cashing it in periodically, restricting household appliance use, or even learning basic home and car maintenance. Small changes ultimately add up to big savings along with improved overall household efficiency and productivity.

Once you set your mind to the task you will uncover countless ways to cut costs and save money. It does take diligence and a conscientious effort, but most savings methods become second nature in time and they are good habits worth learning. Becoming debt free and financially solvent is a long-term plan, but as wealth accumulates, money will become your friend, working with you to establish assets and equity that had previously seemed unobtainable.

[Source: How to Budget and Save Money on a Low Income.]

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