13 Ways You Can Save Money On A Low Income

I get a lot of questions from readers wanting to know how they can save money on a low income, so I thought I would write a post about some of the suggestions I’ve been giving out that can help you put money in the bank, even when you’re living on a limited income.  I’ve also included some great resources along with the suggestions that will help you get started putting money in the bank right now!


You Can Still Save Money On A Low Income

When you’re living on a small income, it can be especially hard to save money for things like an emergency fund, college, retirement, cars, or anything else.  We all have our lean times financially, but even in those lean times you can still find ways to save money for the future needs of you and your family, such as college and retirement. I truly believe that even if you have a low income, you can still save money if you’re diligent about the process.


13 Ways To Save Money On a Limited Income

So let’s get on with it!  Here are 13 ways you can save money on a low income:


Evaluate Housing Costs

Many times it’s difficult to save money because housing costs take a huge chunk of the family budget.  In general, it’s best to keep housing costs to 25% of your take home pay or less.  I realize that in some areas of the country this might be impossible on a small income, but there are always a few very good deals available on rent.  Just be diligent and keep looking.

If you own a home, you may be able to refinance your mortgage at a lower rate and free up some money that you can put into investments or savings. If you’re single, you can even take in a roommate or two and charge them rent to save money on housing costs.  That’s money you can put straight into investments, IRA’s, 401k’s, or an emergency fund!


Plan Your Shopping

Never spend money on a whim or just because you “feel like it”.  That’s where a lot of money leaks tend to happen.  The best way to spend a limited income is to plan your shopping ahead of time using a written budget every single month.  That way, you spend your money on paper before you spend it in real life.

When it comes time to buy what you need, you will already have a plan in place and you won’t overspend because you only have so much allotted for each category.  When you approach your spending in that way, you’ll feel like you got a raise because it frees up money that you were wasting when you didn’t have a plan.


Buy Used Stuff

Buy everything you can used.  Buy used cars, used electronics, used furniture, clothing, etc.  You’d be surprised at the great deals you can find on stuff that’s been barely used.  Sometimes you can find “open box” items that haven’t been used, but can’t be sold as new because the packaging has been damaged or opened.  I get some killer deals on EBay on this kind of merchandise all the time. I always buy used cars, and I’ve even been known to shop at Goodwill and at yard sales.  I’ve gotten $100 shirts for $4 at Goodwill and $250 shoes for $45 (worn only once!) on Ebay.

Believe it or not, my wife even picked up a beautiful set of wrought iron and glass shelves that someone had set out for the garbage collector that had absolutely nothing wrong with it.  They just didn’t want it anymore and were too lazy to give it away or sell it (price = FREE!). There are incredible deals out there for most anything you want or need, you just have to know where to look.  Never pay full price if you don’t have to!


Don’t Use Credit Cards

Credit cards keep you poor.  When you use a credit card, studies have shown that you spend 12% more on average because using plastic is such a smooth and frictionless way to spend money.  That doesn’t include the money you also spend on interest and fees that come with using credit cards.  Your best bet is to go cash only and use cash in an envelope system along with your monthly budget.

Find more articles on Credit Cards here


Sweat The Small Stuff

Take your lunch to work, plan to do your errands all at once to save gas instead of making multiple trips.  Save your change and cash it into an investment account periodically.  Heck, you can even roast your own coffee (you can also make extra money doing that, here’s how).  There are always ways to cut costs if you need to that will free up money that can go straight into savings.

You will be surprised how much you can save when you get creative.


Walk Or Ride Your Bike

If you can ditch the car to go to the store or to work, then do it.  You will save money on gas and have the added benefit of getting more exercise.  It’s a win-win!

Find out how Mr. Money Mustache retired at 30 by saving money riding a bike!


Find a Side Gig

There has never been a better time in history to find ways to make extra money using top passive income business ideas.  I’ve written a whole series of articles that can get you started, and I’ll be adding more “Money Making Ideas” over time.

You can see all my Money Making Ideas articles here


Stay Out of Restaurants

Of course, it’s ok to eat out occasionally, but making eating out a regular habit can add up very quickly.  Restaurant food costs at least 4x more than a homemade meal would cost.  That multiple goes even higher at more expensive restaurants.  If you want to save money and still have a nice meal with friends, host a potluck at your house and have everyone bring a dish.  You’ll have just as much fun for a fraction of the cost.


Plan Your Meals

You can save money using meal planning apps or even a paid service like Emeals.com.  Planning your meals ahead of time allows you to better plan your grocery list, thereby spending less on food and saving much more than the service costs.

You can check out Emeals.com here.


Get Rid of Cable TV

This is one of the more common suggestions you’ll find, but it’s also one of the most effective.  Get rid of your cable bill and save money for your future instead.  You can still get the free broadcast channels and enjoy plenty of good programming and all the news you need.  It could also have the side benefit of freeing up some extra time to work on a side gig or increase your skills for your present job so you can get a raise or promotion.


Get A Programmable Thermostat

A programmable thermostat can save money on heating and cooling bills that can free up money for savings.  You can buy a basic model for around $40, or get a more sophisticated thermostat that saves a lot more energy.  Angie and I have two Nest programmable thermostats in our house that have cut our energy bills by about 10-15%.  That means we save around $30-$45 every month on our energy bills.  SWEET!

Of course, you can always change your home’s temp manually too, but a programmable smart thermostat can sense when you’re away from home, and does a much more efficient job of controlling usage while keeping you comfortable at the same time.  The cool thing is that even though these thermostats can be a little pricey, they will more than pay for themselves over time, making them a great investment.

Learn about the Nest Learning Thermostat here

Learn more about programmable thermostats here


Use Coupons

Using coupons to buy groceries and necessities can save you a large amount of money, especially if you know where to find the best coupons.  You can save even more by going to stores that double your coupons, as well as using that store’s discount card along with the coupons.

You can do a Google search to find coupons on your favorite products, or you can visit my coupon database to search over 10,000 coupons in one convenient place!

Visit ThisCoupon Database

Learn Couponing 101 here

Watch a “How to Coupon” Video here


Diligence Is The Key

Of course there are plenty of ways to save money if you put your mind to it and get creative.  But when it comes down to it, diligence is the key to save money on a low income.  When you use any of these techniques mentioned above, you have to be sure to stick with them for the long term, and when you determine how much you’re saving from each one, put that money in the bank as an emergency fund, or into investment accounts to provide for your future needs.

I realize that trying to put money into savings on a low income can be a daunting task, but it can be done.  These are just a few of the things you can do to get started. So now I want to hear from you!

Question:  What are your best suggestions for saving money?  Leave a comment and tell me about your favorites.

About Dr. Jason Cabler

3 Responses to “13 Ways You Can Save Money On A Low Income”

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  1. Great ideas, Jason. As a family that has an income well under 100k, I totally agree with the ideas here. It’s all about making choices. We are eliminating our debt because we are sweating the small stuff,etc. The short-term sacrifice is worth it for us because we are committed to the long-term goal.

  2. The sacrifice is always worth the result. Keep it up Laurie!!!

  3. JMK says:

    Our spending plan is always mapped out 12 months into the future (excel spreadsheet). I include only the essentials, and items we’ve committed to paying (mortgage, internet/cell, taxes and insurance, a weekly allocation for gas and groceries and monthly utilities based on averages from the past 5 years). I can’t tell you how many times I’ve been asked “how can you know what you’ll spend that far in the future?” It’s actually easy to predict the essentials. Almost everything listed above is a fixed payment on fixed schedule – mortgage every other Monday, electric bill third week every month etc. For the items where the amount isn’t preset (gas & groceries) we have determined what our normal weekly spending is and enter that in the plan. Then as the weeks roll along we replace the estimate with the actual amount. Gas only varies slightly with price changes or extra driving to random events. Groceries have been staying within the estimated amount for 5yrs running. I also include our biweekly pay deposits on the spreadsheet. A running balance tells us where we really stand – like tracking the balance in your old fashioned checkbook. Add a pay day the remaining balance goes up, deduct a mortgage payment the balance goes down. By having all the known income and essential expenses planned out a year in advance we can scroll down and see the predicted balance months into the future. It also means we can test the long term impact of a nonessential purchase made now. If we
    The biggest improvement to our finances by switching to this method is now all nonessential spending has to be added to the plan and it reduces the excess that should have been leftover to make extra mortgage payments or add to our retirement savings that week. The first year we followed this method I actually added the new row and called it something like “lost savings – movie”, or “lost savings – restaurant”. I forced my self to put in black and white that we’d consciously made the decision that spending that money was more important than our savings goals. It makes you think long and hard about any extra spending that wasn’t part of the original plan. We don’t budget anything for entertainment or clothing. That doesn’t mean we never spend on those items, but it has become a rare treat rather than just a regular part of life. If we do go to a restaurant we have to reduce the savings for that week. Clothing is only purchased when something needs replacing (no shopping for entertainment) so when we do replace a pair of shoes or someone needs a to replace a couple of work items, again it comes out of the excess there would have been for the week. The extra spending is glaringly obvious and it becomes almost a game to see how long we can go without having to add a row to the plan. Years ago we tried budgeting a small amount to entertainment and clothing each month and found that we could always justified spending it. It was as if once we’d decided $X was reasonable, then we no longer had to really scrutinize the need for the purchase – we’d already done that by setting aside funds for it.
    This simple change of perspective has made a huge difference to our spending. Rather than setting up a plan where we feel entitled to spend in a dozen different categories, we plan on only the bare essentials and anything over that gets a serious review before being added (and forfeiting the corresponding amount from savings).
    To translate this into a plan for any income, add up all the nonessentials you would have put in the budget (clothing, restaurants, entertainment, haircuts, coffee etc) and instead enter a total for the week or month. Call it potential extra savings. Then every time nonessential spending happens add the amount and description, eg. “lost potential savings – video game” and reduce the remaining amount of potential extra savings. At the end of the week/month you can easily sum up all the “lost potential savings” items and see what your choices cost you. Change the labels to whatever motivates you. (My cousin uses this method and labels the non essential spending rows as “crap and nonsense – ____”.

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