The inflation rate in India is extremely high; what this means for the low-income earners is that a further increase in commodity prices could jeopardize their survival. History is proof that salary income does not always witness a tantamount growth as that of expenses. And if you live in a Tier-1 city, expenses can be a huge burden if you don’t have just enough income earning capacity. So, what can be done? Is there no way to save money for future dreams when incomes are low? Let’s dive deep into the most doable ways to save money.
So, how can you save money if you have a low income?
Saving money on a low income can get quite overwhelming. It won’t be easy; it might mean that you will have to cut down on extravagant expenses and outings, but if you make a plan and follow it judiciously, you are sure to get remarkable benefits in the long term. Before looking for ways to save money, you must understand where your hard-earned money is going. And you can get a holistic picture only when you make a budget.
Why is budgeting important?
To budget means to make a plan – a plan of your future incomes and expenses. This plan will help you gauge whether a particular expenditure is feasible and in line with your end goals. A dinner party with your friends may sound fascinating, but you should consider slowing down if you have been eating out frequently. So, make a budget and have complete power over your finances. Another great advantage of budgeting is that it makes you aware of your most significant expenses. Here are some beneficial tips to save money:
1) Try to reduce striking expenses
Once you have identified what constitutes a large chunk of your overall spending, focus on reducing that first. If your house rent takes away a considerable part of your earnings monthly, then consider shifting to a more affordable location. If you end up spending a lot on the commute, take a bus to the office instead of a cab. Also, try getting a house near your office so that you don’t waste a drastic amount on the everyday commute – quite wasteful, honestly! Spending wisely is essential. Think before you spend, and sooner than you know, you would have enough saved for all your needs despite having a low income.
2) Eliminate your debt
Cutting down on debt expenses is the best way to save money. A loan might give you immediate financial freedom, but you will have to pay the price for several years into the future. Especially if you have a low income, you should repay your debt obligations before wasting money on unnecessary activities. Once you are no longer required to shell out interest costs, you will be able to put your money to better use.
3) Save first, spend later
To achieve the aim of saving first and spending later, consider investing a pre-determined sum in a Systematic Investment Plan. When you invest in mutual funds and ETFs, your portfolio is diversified, increasing your chances of a higher return. A monthly SIP will inculcate saving habits and will cap your expenses. Try investing at the start of every month; then, you will have to manage your expenses with the remaining cash – combatting overspending.
4) Meal planning is a crucial task
If you have confined cash to spend, you wouldn’t want to misuse it on eating out too frequently—battle last-minute food purchases through meal planning. Remember, restaurants are a luxury, not a necessity – the outings can be avoided, and the urge to eat out can be controlled. When you decide to prepare food at home, do not overspend on groceries. Mismanagement can lead to food wastage and unnecessary expenses. These small tips to save money will make a difference if you take them seriously and show courage to implement them.
5) Starting earning on the side
Combined with the ways to save money discussed above, try earning extra income by working part-time or freelancing. If you have tried everything to push your expenses down and nothing seems to work, maybe then you have reached the peak, and you should consider having additional disposable income. But do not forget to stick to your spending budget because a side income source will not make you rich overnight.
6) Look for cheap entertainment alternatives
Who said saving tips had to come at the cost of entirely compromising on entertainment? Do your research and find ways of having fun at no cost. It could be going for a run at your nearby park or hosting a pot lunch at home instead of dining out. Till things get on track, buy cheaper clothing alternatives and purchase beauty accessories less frequently.
7) Find great deals on purchases
Discounts and deals could be your saviour. For instance, during festivities, e-commerce sites sell products at a discount to drive sales. Instead of buying into instant purchase cravings, you must wait for the right time to get the same commodity at a discount.
You must prioritize saving up for an emergency fund. This pile of cash will have your back in challenging times when survival seems harsh. Saving even a small amount would seem like a draconian task at first. Start small. And when you feel that you have got the hang of it, increase your savings percentage.
There are several ways to save money. But what matters is the intent to save money in the first place. You must be strong to comprise short-term activities that make you happy and focus on the greater good. You must create a balance between your joyful spendings and the dream you want to achieve a few years later. Savings should not feel like a compromise but a mission leading to a secure life. Feel free to think of more saving tips and implement them.