Saving Tips For Low Income Earners
Saving or putting some money aside could be very hard most of the time, especially if living on a low income. The fact is we are not going to pretend about this, we all know how it is when going through tough times financially.
When you have truck loads of unavoidable responsibilities, you will understand why many people don’t have savings anywhere. I and my wife have personally saved money in different bank accounts never touching it until a dire need arises, but we ended up using all the funds due to the things we could not avoid taking care of.
Before you feel all hope is lost for a low-income earner like you, lighten up, because this post is for you. In this post, we will look at, in detail, 12 powerful tips/methods to save money as a low-income earner.
1. Start a Side Hustle
Starting or creating another stream of income should not be a difficult task. Many individuals augment their financial level even when their earnings or income was insufficient, they still managed to break even.
One of the ways to build a money-saving culture is to set up a business that can help you diversify your budgets to the most important aspect of life while keeping some for the rainy days. For instance, if you are a salary earner, and your monthly payment is ₦50,000, you can set aside ₦30,000 with a plan to start up a business.
Moreso, it would be advisable or recommended to save ₦30,000 every month for 4 months, totaling ₦120,000, and then venture into an Indomie Noodles Cooking Business with the capital you realized from savings. It’s not compulsory you run the business personally, you can employ labor if you have the capacity.
This is actually a practical step to set up a side business that will help assuage the financial burden resting only on one source of income; your job. Moreover, it doesn’t have to be a Noodles Stand business, it could be other businesses with low capital – you can search our blog and discover the ones we have published already.
2. Create a Budget And Stick To It
Let’s extract something from the first tip. Saving ₦30,000 every month from your ₦50,000 salary is not easy, but you and I know that whatever you don’t plan won’t work. After deducting ₦30,000, you will have ₦20,000 remaining. Now, how you will live on the remainder is predicated upon how you lay out your budget.
If you must put some good money aside as savings, you must create a budget if you didn’t have one before and be disciplined with it. Note, that this would be different for families with children. However, this article is applicable to all and sundry, and may not provide 100% perfect answers to whatever is your challenge, so open your mind to possibilities!
In this modern time, we are in, almost every individual is using the internet, and data is needed for uninterrupted access online. So, if your data subscription monthly was ₦5,000 and you now have ₦20,000, that’s ₦15,000 left for you.
What you would do in this case is to create a new budget by reducing the data amount to at most ₦3,000 per month till you have achieved your savings goal or aim. This is also applicable to other monthly expenditures you budget for, don’t spend beyond or exceed what you budgeted.
3. Pay Off Your Debts
Debt is the worst enemy to savings. Try to offset your debts at all costs no matter what. You see, in reality, a 9 – 5 individual would likely borrow to seal up the gaps that have been created by delayed salary payments.
Borrowing would be your last resort if you don’t get paid on time by the end of the month. Getting loans for the right purpose is great, but taking care of needs at home without any means to pay them back on time could result in debt accumulation.
The best advice is to get a sheet of paper, write down all your debts, start settling or wiping off the smaller ones, then to the big ones till all is gone. And while paying off your debts, avoid creating new debts.
4. Reduce Spending Money On Food
Food is one of the basic needs of man, it’s highly fundamental. Be that as it may, one could be tempted to waste funds piling up foods or food items he or she doesn’t need. If you must have savings, then you must avoid being a glutton.
If you are a low-income individual, common sense should tell you there is no buying fast food or extravagant eating outdoors. Therefore, for you to save money effectively, you should cut down the number of times you eat in a day, probably from 3 square meals to 2. Also, note that the quantity of food you dish per time matters too!
5. Eliminate Liabilities
Liabilities are the unnecessary or unneeded “baggage” or “loads” you have around in the name of “living the life.” If you are serious about putting money aside, then you must learn to set boundaries and let go of some of the liabilities that are not benefitting you.
Having an iPhone worth ₦950,000 and you don’t have savings is a liability except the device is generating passive income for you. If not, sell it, buy a moderate android phone, invest part of the money, and save some.
6. Minimize On Entertainment Cost
Entertainment is sure a money sucker! Talking about going to the cinema, going to musical shows, standups, sleeping on social media platforms, watching comedy skits on Instagram and YouTube, and so on will prevent you from saving money if you are not moderate about these activities.
These activities involve spending money in several forms; ranging from data to paying money for show tickets. For a low-income earner, this should not be a lifestyle for the meantime until you have financially stable to handle more responsibilities without feeling overwhelmed.
7. Check On Your Utilities
One of the major aspects that consume money more is utility. If where you are living has a prepaid meter, putting the freezer on for 24 hours is not a good idea, using an electric heater to boil water is reckless, and plugging the iron to press plenty of clothes is not wise.
Any device or equipment that has reputation for draining units on the prepaid meter should not be utilized too often. In this case, every other utility should be minimized like tightening the gas cooker nub completely to avoid the flow of gas instead of leaving it halfway.
Utilities should be under check at all times to avoid wastage, especially if you have kids around the home. Because these are the things you can’t live comfortably without.
8. Reduce Your Housing Cost
If your monthly income is ₦100,000, then you don’t have any business living in an apartment that will cost you ₦500,000 per annum. This is one of the main reasons why a lot of individuals can’t have savings.
You will only incur many expenses when you live above your income. Living in an exotic apartment that will cost you a fortune to maintain can hinder you from executing a proper and strict money-saving lifestyle.
In a practical sense, rent an apartment that you can comfortably renew rent when it expires while planning out your finances in a more intentional manner. Remember, you should not only live as though you will be a tenant forever, someday you will definitely own your own house.
9. Curb Your Appetites
Saving money is not for the fainthearted, it will require sacrificing a great deal of your pleasure in order to be able to achieve your financial goal. When I started out in life, especially when I had a little breakthrough financially, My wife and I will be shopping for anything that caught our attention.
We would go to fast food and spend a good amount of money in the name of enjoying ourselves. All of that came to a halt when we realized that we didn’t have savings, maybe because money was coming in frequently. You need to know that there are days of drought you can’t avoid; it happens to every man.
However, we needed to draw the line and set boundaries for our appetites, so that we will be able to build a financial structure that will outlast us. Appetite can make you a slave to pleasure if you don’t curb it. You must learn to say NO to habits that will encourage reckless spending.
10. Reduce Your Cost Of Transportation
Those living in Lagos can attest to the complicated life that is going on there. You will see people with salaries of ₦50,000 to ₦100,000 every month, but the expenses for transportation would be approximately ₦15,000 to ₦20,000 at the end of the month. What percentage of their salary is that?
To be sure, other monthly expenses have not been deducted yet and such an amount of money is swallowed up in transportation fares. With this in mind, it’s pertinent that you need to reconsider your choice of where you work and live.
To do actual savings and succeed at it, you need to adjust your plans, and see to it that you make every effort at cutting costs in your daily routine.
11. Be Very Calculative
Financial prudence demand a frugal living. For you to successfully set some money aside for a project, you need to understand the common sense in deciding the most important things to put first and distribute your budget accordingly.
It’s not every side of the attraction that you will patronize because you are on a mission to build your finances. This calls for calculative reasoning when it comes to apportioning money to execute your plans. Also, not all your proposed plans must be monetized.
What I mean by being calculative is knowing the outcome, result, or benefit you will get before spending a dime on any venture. That is to say, you must endeavor to weigh your financial decisions before making them concrete.
That means if you desire to buy a pair of sneakers and the cost is high in a boutique and way beyond your budget, you should be able to get a cheaper one at a shop or roadside ( I have personally purchased very mature, beautiful, and durable sneakers from a small shop for just ₦3,500 when a boutique was selling it at ₦8,500), I saved ₦5,000!
12. Automate Your Savings
This is one of the very best methods to consider implementing if you must grow your finances. Most of the time, we need to consciously and painstakingly force money out of our bank accounts for savings’ sake. Because, if you want to think about it, you will become emotional and never get any tangible result.
There are some legitimate applications that can help you in deducting a certain percentage from your bank account anytime you receive your salary or business profit and saves it automatically for future purposes.
These are automated financial systems programmed to help you put some money aside with utmost discipline and 100% strictness. Almost all of these apps will recommend you to lock up your money in your savings wallet for a period of time; for either 3 years, 2 years, 1 year, or 6 months as the case may be.
Take Home Notes:
- To be successful at saving money, you need to configure your mind that whatever happens, you must not tamper with your savings
- Create two bank accounts for expenses and miscellaneous
- Organize your financial life and know what to spend per time
- Keep money for an emergency aside from your savings
- Your savings don’t need to be hundreds of thousands before you can begin, start from the little you earn and grow from there
Going through this article or write-up may give you the impression that I am a miser, stingy, or probably one of the “Stingy Men Association” members, smiles! Perhaps this post is hitting real hard on some of your consciences because you feel guilty about the points explained in this content.
Be that as it may, my motive is to help or guide you on the practical steps to saving money as a low-income earner. Even if your monthly earnings are high, this post is also applicable to you.
It would be best if you had the right mind while reading this piece, and you will see how sincere I am in unraveling these secret tips. These are tips I have executed in my personal dealings, from this experience I’m able to give you tips as detailed as this.
If you find this post valuable, kindly share it with your friends and family on your social media handles. And if you have any contributions or suggestions, use the comment section below, and let’s interact. Thank you!
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