How To Save Money on a Low Income: My Personal Story and Experience

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Can you really save money on a low income? Ask this janitor who quietly amassed an $8 million fortune! Yeah, no kidding!

I have to admit that living a frugal lifestyle may not be enough for those who have a low income.

It’s a great and helpful start to saving money but it’s just not enough.

That’s why taking advantage of the best and free money hacks or looking for creative ways to earn extra money during your spare time can go a long way when you’re living on a low income!

Trust me, I’ve used many of those resources to help improve my life and situation!

 

How to save money fast on a low income

Today is going to be a special post that’s a little different since my blog doesn’t concentrate on extreme frugality.

My past posts about how we create and build wealth in 10 years inspired a bunch of my readers. But after finding out that 78% of Americans are living paycheck to paycheck, I realized that it may not resonate with some people (and 78% is A LOT of people!).

Gosh, even some people who make over $100,000 per year are living paycheck to paycheck let alone the ones who are struggling to save money on a low income!

I cannot hide the fact that our combined income is higher than average, but back in 2010, my fiance and I started with a one-income salary of $31,000 (~$15 per hour). The struggle is real and we know how it feels!

As things improved, our savings jumped from the first $1,000 savings (combined with paying off some debt) to $10,000 savings per year. Eventually, we were able to save over 50% of our income and purchase numerous investments once we identified methods to enhance our earnings. Today, those savings are growing faster than the initial amount we struggled to save, all thanks to the power of compounding interest on those investments held for a long time.

Most of our wealth today is not because we saved every little penny we earned in the past. I honestly cannot imagine doing that! Yes, it became easier to save money as our combined incomes grew, but most of our savings today come from the investments we consistently purchased over a decade ago. I also cannot hide the fact that we also got a little lucky with the strong stock markets since the last recession!

Though I am a HUGE fan of making money work for you, this post isn’t about amassing your wealth through savings and investing. You can learn more about how to invest for dummies here.

Today, I want to give you tips on how to save money fast on a low income or how to live well on one income.

Aside from starting off with a single income of $31,000 ($15 per hour) before taxes, we both know what it’s like to be “poor” because we grew up in very low-income families (try living off less than $15,000 per year with a family).

I never like bringing up this point, not because I think it’s embarrassing, but because I don’t like using it as an excuse or a way to showcase how we “came from humble beginnings.”

Overall, I hate talking about myself and this post really isn’t about me or where I came from. But since more than 77% of my life has been living on a low income, I want to help you manage and cope with it without going nuts!

 

You know that you are living on a low income when you are forced to:

• rent in an apartment located in an area with a high crime rate (ever witnessed stabbings from your balcony window?).
• reside with a few roaches and rodents (I really don’t miss those days of seeing Mickey without having to visit Disney World!).
• eat at home all the time (there’s no such thing as going out).
• take “hand-me-downs” from your friends and family who are financially better off than you.
• stay in town when your parents are “on vacation” (what vacation fund???)
• rely on some government aid.

 

Real life lessons learned growing up in a low-income family

Growing up in a low-income family, I would always hear my dad complain about us being poor.

What I’m about to say may sound odd, especially when this comes from someone with the lowest income bracket, but my dad would never go out of his way to save money or build wealth.

He thinks being frugal and saving money is a complete waste of time and doesn’t produce any real results (Hint: he thinks it’s cheap and I’m not sure why he thinks that).

 

 

 

He would talk about how climbing a corporate ladder, building a successful business from scratch, or investing in the latest and hottest real estate trend is what makes you rich.

Okay, he talks and talks about it ALL the time, but where’s the action? Instead, he would generally have something or someone to blame (i.e. a bad government or being born unlucky) or come up with some excuse for our misfortunes. Now, I love my dad to death and I am not here to talk about him.

In fact, it’s his complaining that helped me build wealth today.

How?

Well, if there’s one thing I learned from him, it’s that complaining and coming up with excuses (which most people do) will get you nowhere!

Once I realized that complaining, blaming and coming up with excuses of why I’m poor was the real root of our problems, I took action and did exactly the list below to save money, make money, and build wealth.

I started off doing this while still being in the low-income bracket.

Mind you, my dad and others used to laugh at me while I was saving money, investing, and hustling away, but I ignored them and did my own thing. They thought it was too slow since the results weren’t instant (BTW, they are still complaining and in the same position today).

I still continue to save, invest, and make extra money during my spare time, so despite being a low-income or high-income earner, anyone can follow these steps and find success in saving money and building wealth over time.

Here are fail-proof ways to save money on a low income (or any income).

 

 

Ways to save money on a low income:

Here are the steps I personally took to save money when I lived with my parents, who were low-income immigrant workers.

 

1. Change your money mindset.

This is the first and most important step that you need to achieve. I can almost promise you that once you get through this step, you’ve already won 50% of the battle! The other 50% is setting realistic goals and taking action.

So, it’s really time to cut all those excuses such as:

• “There’s not enough time during the day!”
• “Work like a b*tch for extra money? No thank you, I rather enjoy my naps during the day!”
• “I’m not young anymore so there’s no time when you have a family!”
• “I wasn’t smart or lucky enough to pursue a masters or Ph.D. so my earnings will be limited!”

I was like my dad with a gazillion excuses for why we live a poor life.

But once I stopped believing that I was the victim and started taking action, my life along with my finances improved significantly.

Also, reading books like The Millionaire Next Door and How Rich People Think opened up my mind to a world of abundance!

So, the first and most important thing you need to do is to change your mindset. Just because you are living on a low income, doesn’t mean that it has to last forever.

Make changes today by keeping an open mind.

For example, be willing to find ways to save smart and make money online using the Internet or offline during your spare time.

Most people won’t do this because they are lazy AF (or come up with a million excuses) but want instant results. I know you are not that person! You are the driver of your car and you can choose your direction. Believe me, you have control. It’s just a matter of whether you want it or not.

 

2. Earn free gift cards to reduce your spending!

If you’re ever feeling a little tight on cash, I recommend joining these best survey sites like Swagbucks or Survey Junkie to start collecting free gift cards to your favorite shops. They are absolutely free to use and only requires your e-mail to become an exclusive member!

This may help you save money especially when you’re on a low income. I was able to redeem free gift cards to the stores I normally shop at, so this definitely helped me when I found it hard to make ends meet!

I personally like using them to redeem free gift cards to Starbucks or Walmart!

Yes, I admit I’m a sucker for Starbucks (even when I was a broke student with no money) and I won’t hide my guilty pleasures.

Anyway, how it works is you get rewarded with cash through PayPal or free gift cards just by doing the things you normally do. That includes surfing the net, playing games, shopping online, and completing easy surveys. As you can see, I like choosing the gift card option instead of cash. 🙂

Most of the survey sites I recommend offer gift cards to your favorite shops such as Amazon, Starbucks, Walmart, Target, and more. Read here if you want to learn how to earn free gift cards online.

 

Related posts on how to save money and make money when you have a low income:

• Need money now? 15 Ways To Make Cash When You Desperately Need It Today
• The Best Paid Survey Sites When You Need Cash (Earn Up To $50 Per Survey Here)
• 6 Sneaky Ways To Earn Free Gift Cards Online

 

3. Create a fail-proof budget that works for low-income earners.

It’s time to create a budget for low-income earners and still live richly on a modest income!

I’ve mentioned time and time again that we used to watch Gail Vaz-Oxlade’s money makeover shows. She’s exceptional at teaching you how to thrive on a low-income budget.

Thanks to her fail-proof budgeting strategies, we were able to save a million dollars in net worth by age 30.

I must admit that our income did increase over the years and our investments benefitted greatly from the stock markets. I won’t hide that fact. Nonetheless, Gail’s weekly and monthly budget planner became the cornerstone that allowed us to cultivate our net worth at a pace comfortable for us.

Results will differ, but persistence and making it a core part of your lifestyle are essential to truly see the benefits!

Despite being a low-income or high-income earner, coming up with a fail-proof budget plan offers many benefits such as:

• knowing exactly where your money goes and how much you are spending.
• building momentum when you are on track with your weekly goals (baby steps, girl!).
• creating a plan so that you are not surprised at why you are in debt or living paycheck to paycheck (a budget can help avoid it).
• knowing how much you can afford (this will motivate you to find creative ways to earn $100 per day AKA increasing your income so that you can live and do more).

We created this free budget printables binder to help you keep track of your money. It’s 100% free and only exclusive to my subscribers, so grab your budget template here.

 

4. Find fun and free frugal activities to do when you’re bored

One of the best strategies for saving money on a low income is to immerse yourself in fun and free frugal activities, especially during those weekend hours when boredom might tempt you to spend.

This weekend, instead of leaning towards pricey entertainment, you can look into the vast array of free frugal activities available around you. Whether it’s nature hikes, local art exhibitions, DIY crafts, or joining community events, there’s always something to pique your curiosity.

Taking advantage of these opportunities not only supports your financial goals but also enriches your life with experiences that go beyond mere monetary savings.

 

5. Save money by reducing your food expenses.

One of my favorite ways to save money on groceries is to shop sales and combine them with coupons plus some cash-back savings apps. These are clever strategies that anyone can use, especially those who are struggling to save money on a low income.

You can also check out my evergreen list of the best ways to save money on groceries. These are the very techniques I use to save while maintaining a healthy lifestyle!

One tip I recommend is also this.

Studies show that people tend to waste money at the grocery store when they shop on an empty stomach with no plan. With that said, I made this free downloadable printable for you to write down your shopping list so that you can save money each time you go grocery shopping.

 

Related post: Hacks I use to get free Starbucks drinks on a regular basis

 

6. Save money on meals.

I was a member of this $5 Meal Plan and I really enjoyed it but had to cancel it because my parents want my fiance and me to join them for dinner every other night (it’s a tradition in our family).

You may not be lucky like to me have parents who want you to go over for dinner, so an alternative is to try the $5 Meal Plan.

They send you a weekly meal plan where each meal costs about $2 per person. I’ve personally tried this and it’s legit! The whole point is to help you save time and money! You can sign up for a free trial here for 14 days risk-free.

 

7. Find free money resources.

Who doesn’t like the sound of free money?

Hunting for sources of free money can provide a financial boost, especially in tight situations. Whether it’s unclaimed funds, cashback rewards from credit cards, joining the highest-paid survey sites in America, or referral bonuses from apps and services, a little research and vigilance can uncover opportunities to add extra cash to your pocket without additional work.

 

8. Find free stuff online.

In addition to free money, you can also score free stuff online.

For individuals on a tight budget, the internet is a goldmine for locating free items. Numerous websites and online communities offer giveaways or list free products, from furniture to electronics. By tapping into these resources, those with limited means can obtain necessities or luxuries without straining their wallets.

 

9. Celebrate your birthday with freebies.

Living on a low income and trying to save money simultaneously doesn’t mean you have to deprive yourself. In fact, there are many places willing to celebrate your birthday with you by offering you birthday freebies.

You can check out these best places to get freebies on your birthday!

 

10. Reduce your ATM and overdraft fees.

You need to take care of the low-hanging fruit first!

Reducing ATM and overdraft fees is essential when saving money while living on a low income. By planning withdrawals and monitoring account balances, you can avoid these additional costs, ensuring every penny is used wisely and contributes to your financial stability and growth.

 

11. Bring your own lunch.

Bringing your own lunch is a smart move when you’re living on a low income. Not only does it help you save significantly over time, but it also allows for healthier choices, ensuring you get both economic and nutritional benefits.

I used to spend money lunch every day and it’s no wonder why I was living paycheck to paycheck. Start packing your lunch more often and you will see what a huge difference this makes!

 

12. Pay your bills on time.

Paying bills on time is crucial, especially for those navigating the challenges of a tight budget.

For individuals living on a low income, every dollar counts. Late payments can result in added fees, higher interest rates, and potential hits to one’s credit score. Over time, these costs can accumulate and put an unnecessary strain on an already limited budget.

By ensuring timely bill payments, you not only save yourself from these extra costs but also establish a positive financial reputation. Setting up reminders, automating payments, or using budgeting apps can make this task easier and help in securing a stable financial future.

 

13. Earn cash back to save money.

I understand the irony: it seems counterintuitive to spend in order to save. However, my advice is to only shell out for genuine needs. And when you do have to spend, use cashback apps like Swagbucks or Rakuten to make the expenditure feel a bit more rewarding. These are my go-to free money resources, and I wholeheartedly recommend them for those necessary purchases.

 

14. Negotiate every bill you hate paying for.

When money is tight, every penny counts, and one of the most effective ways to stretch a dollar further is by negotiating the bills you dread paying.

Whether it’s a monthly subscription, a gym membership, or a cable package, companies often have some flexibility in their pricing. They’d often rather make a concession than lose a customer altogether.

By simply picking up the phone and expressing your concerns, especially regarding high costs, you can frequently secure better deals or discounts. I remember investing a bit of time upfront to negotiate my bills after each annual renewal.

Remember, businesses want to retain their customers, and your willingness to speak up could be the key to unlocking savings.

 

15. Price comparison.

Price comparisons when shopping are essential for savvy consumers. By evaluating prices across different retailers, one can ensure they’re getting the best value for their money. This practice not only saves cash but also fosters a more informed and empowered purchasing decision, leading to greater overall satisfaction.

 

16. Find ways to earn extra money.

For low-income earners aiming to save money, discovering ways to supplement your primary income can be invaluable.

Consider delving into the gig economy. Opportunities abound, from driving for rideshare services to delivering food and groceries or completing micro-tasks online. In fact, I’ve shared my personal experience in a post detailing the potential earnings from a day on DoorDash.

You can also monetize unused items by selling them online, or capitalize on your skills through freelancing and local odd jobs.

Furthermore, hobbies like crafting or baking can be transformed into side businesses. Every extra dollar earned can be funneled into savings. Over time, these seemingly small contributions can amass significant savings, offering a safety net for future needs.

My blog offers numerous ideas on how to earn extra money, even without specific experience or skills. You can explore them here:

• How to make $300 a day
• Ways to make an extra $500 a month from home
• The best one-day-a-week jobs that are fun

 

17. Inspire yourself to learn from others who are more successful than you!

There’s a quote that goes:

“Surround yourself with those who only lift you higher.” – Oprah Winfrey.

There’s also another quote that goes:

“You are the average of the five people you spend the most time with.” – Jim Rohn

Although I’m not surrounded by many positive influencers, I truly believe in these two quotes. And I really believe that this advice will improve your finances and your life!

I’m not saying that my friends and family aren’t admirable, but most of them don’t believe in financial independence nor my view about living a fulfilling life. Yes, most of them will come up with excuses for why they cannot save or make extra money (and then complain about how unfair life is). Now, I’m not here to say who’s right or wrong — this is a personal choice. At the end of the day, I still admire and love all of them!

But with no one who I could turn to, I basically stuffed my brain with facts about people who are financially successful and started following them for some solid financial wisdom.

 

18. Learn how regular people (or even low-income earners) became millionaires.

I mentioned so many times throughout my blog that The Millionaire Next Door: The Surprising Secrets of America’s Wealthy is one of my favorite books because it has truly changed my life!

I know what your first reaction is… “What the heck? Become a millionaire? I’m on a low income, with massive debt and living paycheck to paycheck.” See, those are excuses again.

It sounds impossible to think about building wealth, but I want you to keep an open mind (that’s what I did) despite how far-fetched you think it seems. In fact, you’ll be surprised that most millionaires aren’t those who were given an inheritance.

Like the janitor who amassed an $8 million fortune, it was the right saving, spending, and investing habits that led him to financial independence. Like I said, less complaining and excuses and more doing will increase your chances of achieving financial success. You’ll be surprised at how small changes in your daily habits today will compound into something massive tomorrow!

 

Related post: How To Become a Millionaire From Scratch With No Money

 

19. Follow Warren Buffett’s financial wisdom.

Before following Warren Buffett, I had a very poor mindset. I was also living paycheck to paycheck with a low income during that time. I don’t like talking about my past (because it sounds like I’m either complaining or humblebragging which I hate), but like you right now, I really thought that was going to be my life forever.

Following someone who is financially better than you is a great way to motivate yourself, especially when you are struggling to save money and build wealth on a low income. I follow Warren Buffett by reading about him almost every day!

 

Read these articles if you are struggling to save money on a low income and need some real inspiration:

• 5 Amazing Money Tips from a Billionaire That Will Help You Conquer Your Finances!
• This Quote By Warren Buffett Will Inspire You To Become Rich!

This may sound crazy, but I wake up each morning searching for his quotes on my phone. It’s what gets me going throughout the day. So, here’s my point, if you want to get out get out of a financial rut and start building wealth… Start surrounding yourself with the right people. It will do wonders for both your finances and self-development!

 

Over to you — how do you save money on a low income? Are you inspired to improve your financial situation? What’s stopping you from improving your life? Remember, I was in the same spot as you are in now! No one but yourself can make changes today! Start believing in yourself ’cause if she can do it, then so can you!

 

 

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