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5 Tips for Saving Money When You Have Low Income by CONNIE MEI · Moneyning.com

Most of us want to save money so we can build wealth and plan for the future. We have goals we want to reach (like traveling) or things we want to buy (like a dream home). However, this can seem impossible when you’re surviving on low income.

According to CNN, 25 million American households are living paycheck to paycheck. When money is tight, saving any amount can be the last priority on your list. You’re just trying to get by.

So how do you save more money when you’re making minimum wage? How can you reach your financial goals on a low income?

When it comes to finances, it’s important to not only think about the now but also the future. Even if you’re earning a minimum wage, you can still save little by little. Here’s how:

 

Tackle High-Interest Debt First

In order to start saving more, you have to tackle your debt head-on. Specifically, high-interest rate from personal loans, or credit cards, because they force you to pay outrageous fees and interest charges.

When paying off debt, you need an attainable, yet challenging plan to pay it off. Start by prioritizing your debt so you’re paying off the ones with highest interest first.

Then, as you go forward, avoid accumulating any more high-interest debt, especially credit cards.

 

Cut Down Your Biggest Expenses

Trying to save money when you have low income can be very difficult. Sometimes it feels impossible to cut down even a dollar or two every month.

Aside from the usual money-saving ideas, like cooking meals at home and canceling your cable bill, what more you can do? Instead of trying to cut back your small expenses, focus on the larger ones so you can make more of a significant impact.

For most people, housing costs tend to be biggest part of their expenses. If you’re renting, consider downsizing to a smaller home or living with roommates.

If you own your home, take a look at whether or not refinancing your mortgage for a lower rate would be beneficial. You can also rent out a room or parking spot for additional income.

 

Take Advantage of Free Money

Take advantage of “free money” when you can. As a family with low income, you may qualify for the earned income tax credit (EITC). According to the IRS website, the EITC, can be a large refund on your taxes, helping you keep more of what you earned. Sometimes even as much as a few thousand dollars.

You should also look into a 401K at work and see if your company matches up to a certain percentage of your contribution.

If they do, you should take advantage of it and start saving as much as possible. The company match is basically free money that will help you save towards retirement.

 

Keep Your Budget Lean

To save more, you have to take control of how much you spend. Choose the categories you want to indulge in and keep the rest of your budget as lean as possible. You’ll have to make sacrifices but it’s not impossible.

Just learn to spend in moderation. For instance; cut back on how often you dine out. You can still enjoy a nice meal at a restaurant, just not multiple times a week.

 

Start a Side Hustle

 

If you can’t cut costs anymore than you already have, consider diversifying your income by starting a side hustle to earn extra money. Aside from your full-time job, you can get a job on the side to provide another income source.

Many side hustles can be done right from your own home in your spare time. Think about what you’re good at doing, what kind of hobbies can earn money, or what you already enjoy that can be turned into a side job.

 

Make Mobile Banking Part of Your New Year’s Resolution

With It’s Me 247 Mobile Banking, you can keep track of your money anywhere you are, via your phone or other smart device. No more worrying about your funds – your account is just a few clicks away! Log into Online Banking and click ‘Go Mobile’ to learn more.

 

New Year, New Password

The new year has arrived, but security should remain a top priority when accessing online banking.  Keep your account protected by changing your password and security questions at regular intervals.  For additional tips on keeping your money safe, visit cusecure.org.

 

Start Saving for Your 2019 Adventures Today!

You can set up your ACH direct deposit to have part of it go into a savings account, for any trips or vacations that you have planned for 2019. To configure this, log into online banking, click on ‘My Accounts’, and then select ‘ACH Transactions’. Next, click the name of the company and then click on ‘Create New Distribution’. (If you do not see this button displayed, please contact us at the credit union for assistance.) Finally, enter the amount you would like to begin saving. Then select the account, a start and end date, and click ‘Create’ to complete the process.