How to save money when I earn little?
It seems impossible to think about saving when the main problem is how to make ends meet. The fact is that saving on a low salary can seem like a difficult challenge, but it’s not impossible. With a good strategy and discipline, it is possible to create a financial cushion. If we want to start as soon as possible, let’s follow these tips.
Create a realistic budget
The first step to improving a financial situation is to be clear about our expenses and income. To do this in the simplest way, it is useful to use an Excel sheet to classify essential expenses (rent, food, basic products) and non-essential expenses (leisure, travel, clothing) and start to see where adjustments can be made.
To avoid frustration, it is important that the goal we start with is realistic; if it has to be 5%, even 1% is fine. It’s also important to keep in mind that it will always be easier to do this at the beginning of the month, to allow for a timeframe and see more of this money in the account for the rest of the month.
Reduce non-essential expenses and shop smart
Once a solid budget is built, it is necessary to start saying goodbye to less essential expenses or to rethink them so that they are not so crucial. For example, if a large part of the salary is spent on going out, we should think about more economical alternatives, such as trying to eat at home more often or limiting the number of outings per week. It’s also important to review subscriptions and cancel those that are not used or are used infrequently.
On the other hand, taking advantage of opportunities for discounts on major expenses or spending time on shopping is also a good way to save. Going to the supermarket with a list and trying not to deviate from these essentials, comparing prices using apps to find deals, and even buying in bulk certain products to make them more economical are some tricks that can be incorporated into the routine.
Increase income
Although the focus is on saving, if we want to build a more solid cushion for the future, it is important to consider improving financial health. Improving or updating our training is one way to grow and develop. While the salary is somewhat below average, there is also the option of getting rid of items we do not use on platforms like Wallapop, Vinted, or eBay and making them profitable. Similarly, we could make a profit from some of our hobbies, by giving classes or selling handmade products.
To build a more solid foundation that shapes the cushion, it is important to continue educating ourselves with books, courses, and blogs on finance that will help make better decisions to gradually improve our financial health. Similarly, whenever there are doubts, it is possible to turn to advisors who offer free or low-cost consultations to start with things a bit clearer and, above all, start as soon as possible.
Automate savings
If we are young and just starting to work, it is essential that we start from the beginning with the savings routine. Without depriving ourselves of some treats from time to time, save a defined percentage of the salary at the beginning of the month and maintain the habit with discipline. Once we get used to not counting on that money, it will be much easier in the future.
To start this routine off on the right foot, first choose a savings account, considering which one benefits the most according to the economic situation and age. Ideally, keep it in a separate account from the usual one and avoid having quick access to this account, to avoid the temptation to spend it.
Conclusion
Keeping all this in mind, it is also important to be realistic and understand that the situation will not always be optimal to save part of the salary every month, go out, eat well, and cover payments. Sometimes it will be harder and sometimes it will even be impossible, and we should not lament this.
What we must keep in mind is that saving little by little can end up being a lot in the future. Although it may seem insignificant, we should try to keep it in mind. Once we build the first budget, we will be much more aware of what we can enjoy more and when we will have to tighten our belts.