We all need to save more but what if you don’t have a lot of money coming in, how can you save money on a low income? As a university student I would have to budget very carefully to make sure I paid for rent and food let alone put some money aside. In order to save money I had to make sure that I knew exactly how much money I had coming in and going out, that way I would be able to budget how much to spend.
Pay yourself first
I treat my savings or investments the same as I would a bill. I need to pay all my bills or I won’t have gas or electricity etc. If I don’t pay myself I won’t have any savings or investments.
Are you more likely to save money at the beginning or end of the month? Well how much money do you have at the end of the month, on a low budget chances are you will say nothing. So if you were to wait to see what is left at the end of the month to save, you will save nothing.
When I was a student I was paid weekly. Every Friday before I paid any bills I would put £10 into a savings account. If there was any money left over, often there wasn’t, I would put that into my savings account too. Eventually, my savings account grew bigger meaning that I felt more secure financially.
Round up your purchases
Many banks and apps allow you to round up your loose change from your debit card purchases. So if you go to the shop and spend £8.40 on food, your bank will round up the purchase to £9.00 and put the 60p into your savings account. While this doesn’t sound like much, this can quickly add up to the point that you are saving £5-10 a week depending on how much you use your card.
I did this with my bank for a week and saved £5.14. Taking that as an average that could add up to £267.28 in a year. Combine that with paying yourself first, you will be well on your way to saving a good amount of money.
After all the bills are paid for, our biggest expense is typically food. It is so easy to spend £30+ on food in a weekly shop, especially if you go in without a list. When you go shopping without a list you are basically shopping based off your cravings. You will go around each aisle and pick up anything you think you want. Before you know it, you are spending a fortune on stuff you don’t need or even won’t use. We have all been guilty of this.
Since having been in lockdown due to Covid-19 and wanting to save as much money as possible, I have incorporated meal planning in order to make a shopping list. This has the benefit of not only cutting down on costs, I have also reduced the amount of food wasted. Additionally, having had to think about what I am eating has made me want to make my eating habits more healthy.
No spend days
Challenge yourself you have at least one no spend day a week, you will be amazed at how much you save. By doing no spend days you begin to realise not only how much money you are spending, but how often you are spending money. By thinking about both you will realise your spending habits. You will also ask yourself if you actually need to buy something.
Quickly you will find yourself saving money as you become more careful about how and when you save money.
Do a savings challenge
Savings challenges are a great way to save money because it introduces a competition and a goal. Two saving challenges that I am fond of are the 52 week saving challenge and the £1 a day challenge.
The 52 week saving challenge involves you saving the same amount of money as the week you are on in the year. So in week one you save £1, week 2 you save £2, week 3 you save £3 etc. Eventually on week 52 you would need to save £52. You could do this challenge either in order 1-52 or in reverse 52-1. If you are not a fan of either you could mix up the weeks so that one week in June you saved £50 but the next you saved £4, this can spread out the large saving weeks. If you stick to this challenge you would save a total of £1,378 a year.
The £1 a day challenge is as simple as the name suggests, you put away £1 every day into a savings account or pot. It is the easiest savings challenge to do and you will save £365 in a year. This challenge is particularly good for kids, just change the daily amount to suit how much you want to save.