This is a guest post by Cassie Pipp of the personal finance blog Living Low Key.
Cassie has done something really impressive — going from $30,000 in debt to a six-figure retirement account in just six-years.
More impressive, she did it on a low-income.
I asked Cassie to share her own story and share her best tips for how to save money fast on a low income.
And if you’re looking for ways to build wealth on an average or below-average salary, check out my step-by-step guide to investing on a $50K salary — it’s applicable advice even if you make a little more or a little less than that figure.
Saving money isn’t easy, we know that, we’ve been through the struggle too. It can be even more difficult to save money if you’re living on a low income.
Don’t worry, I’m going to show you how to save money fast while living on a low income!!
A few years back, my husband, David, and I found ourselves drowning in debt. I’m not talking a little bit of debt, we had over $30,000 in car and student loans to make payments on.
At the time, David was enlisted in the military and I was working a part time job while going to school. It was early in David’s military career so we weren’t making a lot of money.
It was overwhelming, the financial situation we had gotten ourselves into was terrifying. When it started getting hard to keep up with our bills each month, we knew we had to make a change.
We knew that, with our after-tax income of about $32,000, we had to start saving money and paying off debt. It was time to get serious about our finances.
Over the following two and a half years we put a lot of effort into saving money and paying down that debt. Guess what happened?
We did it!
We paid off that $30,000 in debt in two and a half years. It was an amazing feeling to be able to become debt free. We’re living proof that even on a low income, it is possible to save money and pay off debt.
Now it’s time to show you how we did it.
How to Save Money Fast on a Low Income: 10 Proven Tips
#1) Learn To Live On A Budget
Before we got serious about fixing our financial situation, we didn’t have a budget. To this day, when I think about us not living with a budget, it makes me laugh. If only I would have known better back then.
If you’re struggling to save money every month, you need to create a budget! There is no excuse for you not to live on a budget, they’re so easy to set up!
This is, without a doubt, the most important tool we had to help us save money. Not to mention it’s super easy to build a budget.
When we were living on a low income, the budget really helped us control what our money was being spent on. It gave us a very clear picture of where every dollar went.
No matter your income level, you need to have a budget!
#2) Reduce Your Food Expenses
If you’re anything like us, one of your major expenses every month is probably food. It can be downright expensive!
If you’re looking to save money when money is already tight, try looking at how much you’re spending on food each month. I bet you can find ways to save money there.
One of the things that we did to save money was stop going out to eat. I don’t mean cut back on how much we went out to eat, I mean we totally stopped going out to eat.
During that two and a half years we didn’t go out to eat a single time. It gets really expensive when you go out to restaurants. We found that cooking our own meals is a great way to save money.
The next place we looked for savings on food was at the grocery store. We were spending way too much on groceries each month.
Here are some of our helpful tips for saving money on groceries:
- Shop with a list, and stick to it
- Shop sales
- Use apps like Cartwheel or Ibotta to save money
- Buy generic brand food
- Don’t shop while you’re hungry
- Score big discounts by opting for “imperfect” produce — learn how
There are so many ways to save money on groceries. Take some time to look at what food you’re buying and I’ll bet you find ways to save money next month.
Related: How To Save Money on Groceries.
#3) Save Money on Transportation
You might not think about it, but driving to work every day costs you a lot of money. Many of us write it off as a necessary expense because, well, you know, you need to get to that job if you want to have any money to save.
We know that you need your job but have you ever considered finding alternative methods to get there? What if you rode your bike or carpooled with a coworker? That could save you money!!
A few years ago, when we lived in Washington DC, David rode the Metro system to work every day. He didn’t do it because it was easier or more convenient. No, he rode it because it was free!!
His employer paid for people to ride the Metro system so he took advantage of that. He didn’t have to pay for gas or parking in the city. He did have to sacrifice some sleep because he had to get up earlier to get to work on time, but it saved us money!
Try to think about your commute to work every day. Do you think you could get there a different way that could save you money?
#4) Coupons Can Save You Money
Growing up I never really knew what coupons were all about. I didn’t know just how awesome they really are. I can tell you now, I love them!
Don’t get me wrong, you’ll never catch me on an episode of Extreme Couponing, but I do like to use them when I come across good ones.
Coupons are great for helping you save money on groceries, diapers, formula, clothes, and just about anything else you can think of. Do a quick search online and you’ll likely find a coupon for whatever it is you need to buy.
We always try to look for coupons for groceries, oil changes, baby supplies, or kid’s clothes. There are a ton of them out there, you just have to look!
#5) Ask for gift cards as gifts
One of my favorite gifts to receive for birthdays or holidays is a gift card. Yea, it’s nice to receive an actual present every once a while, but I prefer gift cards and here’s why.
When you receive a gift card, especially a visa gift card, you can use it for whatever you want. Maybe you don’t have enough money for groceries this month. If you have a gift card in your purse, you can use that to help pay.
Maybe you have enough gift cards to pay off your phone bill this month. That money you would have spent on the phone bill if you didn’t have gift cards can now be put into savings.
If you have gift cards to cover expenses, you can put your money into a savings account for a rainy day. For your next birthday or holiday gift, start asking for visa gift cards as gifts.
Editor’s note: You can also earn free gift cards by completing online surveys and other easy tasks (like watching videos).
#6) Cut Back On Unnecessary Expenses
We’ve all got them, those unnecessary expenses. When times were getting tough for us financially, the first thing we did was cancel any unnecessary subscriptions.
The first thing we cancelled was our Direct TV. We cut the cable cord and haven’t looked back. Aside from the financial gain, not watching TV has been AMAZING for us!
If you’re not sure where to start with saving money, start by looking at what you’re spending your money on. Try writing down all your bills and then ask yourself which ones you absolutely need and what can you get rid of.
I say take a chance and cut the cable cord. You’ll thank me later!
#7) Automate your savings
When it comes to saving money, my personal favorite way to do that is to pay myself first. If I set aside the money right away, I don’t have a chance to spend it.
The best way we’ve found to make this happen is to automate our savings. We have automatic transfers from our checking account to our savings account set up. As soon as our paycheck hits the account, money is automatically moved to our savings.
We take the “out of sight, out of mind” approach with our saving. The money moves automatically so it’s like we never had it. Then, when we check out savings account after a while, we find that it’s grown quite a bit.
Automating your savings is a great way to help your bank account grow.
#8) Reduce Your Utility Bills
I know what you’re thinking, how can I save money on my utilities? I know it might not sound like a great way to save money, but focusing on your utilities is more important than you might think.
If you’re trying to save money on a low income, simple things like adjusting your thermostat or turning off the lights if you’re not in the room can have a big effect. The house we bought last year was poorly insulated. During the winter it gets cold in Minnesota so we buy a couple cheap window insulator kits and sealed any leaky doors. It makes a huge difference in our heating bill.
Simple changes to your lifestyle and being conscious of your utility bill can help you save big money throughout the year.
#9) Sell Unwanted Items
This whole post is about ways to save money fast on a low income. One of our favorite ways to build up some cash quick is to sell stuff around the house.
If you need some fast cash, take a look around your house and I bet there is stuff you can sell for some money. Or, better yet, have a garage sale if you have enough stuff to sell. We’ve done garage sales in the past and made a couple hundred bucks each time.
It’s never been easier to sell things with sites like Letgo, Craigslist, or Facebook Marketplace. We try to go through our house monthly now and anything that we don’t use gets sold.
This is a great way to declutter your home and get cash in your purse.
Related: How To Get Free Money Right Now.
#10) Start a Side Hustle
If you’re trying to save money on a low income and the other 9 tips you’ve read so far aren’t helping you get it done, there’s one last thing you can try… Start A Side Hustle!
Increasing your income is a great way to save more money. That is, of course, as long as you don’t start spending more!
We’ve tried a ton of different side hustles. David is pretty good with tools and ran a small woodworking side hustle for a while. I made and sold soap for a little bit.
I’m pretty sure our family thinks we’re crazy for all the different side hustles we’ve tried over the years. But you know what, who cares! Each of these side hustles helped us make a little extra money that ended up helping us grow our savings account.
It’s time to bring out your entrepreneurial spirit and start your own side hustle. There are tons of options out there, you just have to find the one that works for you!
How to Save Money Fast on a Low Income: Summary
There you have it, those are our 10 tips for saving money fast on a low income. When we were $30,000 in debt we used every single tip on this list to help us pay off that debt. I wouldn’t recommend these if I didn’t know from experience that they work.
We still use them to this day. We found a method for saving money that worked for us and we stuck with it.