If you don’t make a lot of money, you might think that you can’t afford to save. It will be more challenging, but you can still do it. When your salary is small, your savings goals and strategies need to be very targeted. And more creative. The most important thing is to start.
Here are 7 tips to maximize your savings if you don’t make a lot of money.
1. Set an Achievable Goal
Set a preliminary goal of how much you will save each month. It can be as little as $25. Setting this goal, even if you fall short, creates a reality in your mind that maximizing your savings is a priority.
2. Create a Budget
How much money comes in and how much is going out? You will find these answers in your budget. If you didn’t make a budget, now is a good time to do it.
3. Audit Your Out-of-Pocket Spending
Maximize your savings when you don’t make a lot of money by identifying all the ways in which you are wasting money. Instead, take that money and put it to work for you.
Keep track of the cash you spend each day on things like coffee, snacks, and drinks and all the items you purchase as you travel from place to place. At the end of the week when you add everything up, you might be amazed to learn how much money you could save.
4. Trim Your Monthly Expenses
You may think you have a bare-bones budget, but it’s easy to overlook monthly expenses that could be trimmed or eliminated.
- Do you use all your subscriptions? Do you have a gym membership? Do you use it? Can you afford it?
- Is the streaming or cable service worth it, or can you get by with a smaller package?
- Are you paying extra for bandwidth and other mobile/internet services that you don’t use?
- Are you paying maintenance charges and other fees at your bank? Do you routinely use out-of-network ATMs?
- Are there ways to reduce your housing costs? Can you move to a more affordable home? Or look for a roommate? If you own your home and have a room to spare or the basement is free, consider renting it out. Or turn the extra space into an Airbnb rental.
Take advantage of sales at your grocery store and stock up on the drinks and snacks you love. Invest in a coffee maker and create your favorite coffee drinks at home.
5. Get Rid of Your High-Interest Debt
High-interest debt, specifically credit card debt, will hinder your ability to maximize your savings, whether you make a lot of money or not. The longer you carry a balance on your credit cards and other high-interest loans, the longer you will stay in debt.
Use the money that you found from tracking your money and trimming your budget and put it toward getting rid of your high-interest debt
6. Save Money on Groceries
Your grocery bill can take a huge bite out of your budget, especially if you are in the habit of stopping off on the way home from work when you’re hungry. These frequent trips to the grocery store rob you of the money you could be putting into savings.
- Plan your meals in advance.
- Inventory your grocery supplies and make a list of what you need. Take it with you and use it.
- Look for sales and make use of coupons.
- If you purchase perishables, check the expiration date and be sure to consume them before they expire. Tons of food goes into the garbage every day…that’s money you could be putting into your savings account.
- If you have kids, leave them at home.
7. Increase Your Income
To maximize your savings even more, look for ways to increase your income. The gig economy is booming. Utilize your talents and interests and turn them into a money-making venture. Ultimately, your side gig could turn into a full-time startup, increasing your income and your savings.