How to Save Money Fast on a Low Income: 8 Tips & Hacks
When I was trying to learn how to save money fast on a low income, it was really the little things that added up over time to make a big difference. That meant becoming really resourceful.
Yes, I was a little bit different and weird to save money. Though what I did might sound extreme or impossible, it is definitely feasible and possible for anyone. Here are some ways I saved $25,000 by the age of 22 while earning a low income.
1. Working at a job I hated
You may be at a job you don’t love and believe it or not, that’s a good thing. How much money you make isn’t exactly the most important thing at this point.
Having a job I hated working nights and holidays gave me the motivation to get out of it. It was a great motivator to move forward. It’s also a good time to better yourself.
I took advantage of the time I was driving in my car to and from jobs and listened to hundreds of hours of audiobooks, podcasts, and YouTube videos studying finances and entrepreneurship and in the end, it made me tens of thousands of dollars.
Just shift from listening to the radio to something that can make a difference in your life.
2. Reducing my expenses
At the time, I couldn’t earn more money. I didn’t have any usable skills and I hadn’t even finished high school. So I decided to reduce my expenses and save up an emergency fund so if I had some sort of random problem, like a flat tire, I wouldn’t end up in bad debt. How did I do this?
3. Housing by rent hacking
Housing is going to be your biggest expense–about 50 percent of your earnings. You have to think about taking care of that first before cutting out the smaller things. I decided to rent hack. That means you rent something slightly larger than what you need and rent out the other room or rooms to cover all of your expenses.
Do that for one to three years to save an enormous amount of money for a short-term sacrifice of living with other people. If you’re a family, look for rentals with in-law setups so you can sublet.
4. Actually taking action
We can hype ourselves up by reading books and watching motivational videos but unless you are taking action, all of it doesn’t really matter. I’d recommend taking five seconds now and thinking about what way you can save $5 to $10 today or tomorrow.
What can you cut out? Can you bring your own food to work, make your own coffee at home, or make a cheap dinner? Cut your cable cost or call your phone provider for lower terms. What are the little things that you can do to save money every single day and take action on them?
It’s really not about the amount of money you are making, it’s about the amount of money you are saving.
5. Realizing happiness doesn’t come from a store
People come up with all kinds of excuses for why they can’t save money. Kids, for one. But I know tons of people with kids who are saving money. It can be any excuse but you have to be creative.
Don’t underestimate your brain. You also need to realize you can’t have it all. You can’t go out every night or grab a drink with friends all weekend, have a shopping addiction, and also have money.
Studies show you get that dopamine hit not from buying anything but from the anticipation of buying something. Do you know what makes you really happy, though? Reducing your stress!
6. Reducing transportation costs
Transportation is one of the three big expenses right after housing. You can bike, walk, get an older car, or do what we did and move down to one car. The cost of owning two cars was ridiculous for us.
The average cost of owning even one car is astronomical. It’s almost more economical to stay home with one car than go out and work once you factor in all the expenses of going to work.
7. Reducing food costs
Your food costs are the third largest expense after housing and transportation. Find a cheap grocery store, cook at home, meal plan, and bring your own water; all these little things can be cut out of your budget to make a huge impact.
When I learned that in order to save $10,000 a year, all you have to do is earn $27.40 a day, that’s something that’s actually achievable when you put all these little expenses together.
8. Earning more money
At a certain point, there’s only so much money you can save and you have to start earning more money. Over the course of three years, I was working a few side hustles at a time.
I was doing construction in the mornings, my regular job in the evening, and on nights and weekends, I was doing YouTube and doing real estate. I did all this to have the downpayment for my first house hack. I bought a triplex, lived in one unit, and rented out the others so I could live for free.
That led me to save up enough money to buy other homes. All of this led to my wife and I being able to leave our jobs in about six years' time.
How to save money fast on a low income
Remember the sacrifices you make will be for the short term. None of it’s forever. But if you don’t do something, nothing’s going to happen. I hope these best ways to save money on a low income are helpful. They got me to where I am today.
Have you done some short-term sacrifices to help you save money? Let us know by sharing in the comments.