13 Ways To Save Money On A Low Income

How to save money on a low income

If you are trying to save money on a low income, it can feel like a challenge. But don't let a low salary stand between you and your savings goals! You should not feel like you absolutely have to put these goals, such as retirement or a home down payment, on hold. Luckily, there are some creative ways for how to save money on a low income.

Although you will need to think outside of the box, it is completely possible to save money even when you aren't earning as much as you'd like.

Consider making it a challenge to increase your savings with a frugal approach to your budget that doesn't cut out the fun parts of life. Today we will share real tips that can help you save money and create financial stability.

13 Tips for how to save money on a low income

If you have a low income, it will likely take a focused effort to save money. Although it won’t always be easy, it can be worth it. So consider taking action on the tips that stand out below.

1. Build a budget that works for you

When you don't have much money, budgeting might sound like more trouble than it's worth, but it can help you to build your savings. It's a key part of how to save money fast on a low income. And this is simply because having a budget opens your eyes to where your money is going and helps you form a financial plan.

Unless you have a plan for your money, spending it can be extremely easy. With a budget, you can include your savings goals. Instead of aimlessly saving what’s left over each month, you can meet your savings goals through careful budgeting.

If you aren’t sure how to build a budget, consider taking our free budgeting course. It will teach you how to create a budget that works for you.

Learning how to budget is essential when it comes to how to save money on a low income.

2. Lower your housing costs

According to a study conducted by the U.S. Bureau of Labor Statistics, housing expenses can be one of your biggest costs. Imagine if you could cut down your housing expenses by a few hundred dollars each month.

That money could make a huge difference in the size of your savings and overall quality of life. So if you need to learn how to budget money on low income, look no further than your own home.

There are a few ways to cut your housing costs including:


Consider a small apartment or home as a way to slash costs from living expenses. If you can get by in a smaller space, you'll likely build up more savings.

Move to a new location

Location is a key detail in real estate prices. So could you save money by switching up your location? For example, moving from downtown to the suburbs could be cost-effective in some areas, even though it might require a change in lifestyle.

Rent out rooms

If you have extra space in your home, you could rent it out to offset your housing costs. Turning part of your home into a rental property is a great way to house hack, and it might give you enough passive income to be more comfortable financially.

Consider long-term tenants or short-term rentals through a platform such as Airbnb.

Take a look at your situation and decide which option works best for you. An affordable place to live can completely transform your finances.

3. Eliminate your debt

Debt can hold you back from achieving new financial goals. The constant financial strain on your budget can leave no room for savings at the end of the month.

Make it a priority to tackle your debt. It will take commitment to erase your debts, but it can lead to an easier life and peace of mind.

You’ll be able to put the money you were using for credit cards and other debt repayments like student loans, towards your savings. If you want to take action today, then check out our debt repayment strategy course.

4. Be more mindful about food spending

Food spending can wreak havoc on any budget. With the constant temptation to eat prepared food at a restaurant, sticking to a food budget can feel like an impossible challenge. However, this is a good area to really focus on when it comes to how to save money on a low income.

The average household spends about 40% of their food budget on eating out. Although you might not be spending that much, there is likely room for improvement. So look for ways to cut your restaurant spending.

One of the best ways to combat last-minute food purchases is through meal planning. If you already know what you are supposed to eat for dinner, it is easier to drive home without stopping at your favorite take-out place. Meal planning can take some time to get used to, so try our 30-day meal planning challenge to see how you like it.

Finally, make sure that you aren’t overspending on groceries. Take a look at your pantry to see if you can make some meals with what you already have on hand.

5. Automate your savings goals

Making the choice to save money can be difficult. In addition, forcing yourself to make that same choice many times each month can be unrealistic. You are more likely to spend all of the money in your checking account.

Unless you move your savings automatically, you risk spending your intended savings and may wind up not having enough money.

With each paycheck, set up an automatic transfer to your savings account. You can create an emergency fund or a sinking fund to help with expenses. And you'll breathe easy knowing that your savings are safely tucked away.

The automatic savings approach is great if you are thinking of ways how to save money fast on a low income. You'll be surprised how quickly your money adds up and creates a financial cushion. You definitely won’t regret putting your savings on autopilot.

6. Find free or affordable entertainment

One area of your budget that is entirely variable is your entertainment budget. You have the power to overspend in a big way with entertainment. On the flip side, some frugal fun can help you with your savings plan without you feeling deprived.

Here are a few of my favorite entertainment options that don’t break the budget:

  • Matinee movies
  • Host dinner parties instead of going out
  • Go for a hike
  • Practice cooking with your significant other
  • Look for free museums to explore

Do some research in your area to find the best frugal entertainment options. For instance, at-home date night ideas or family fun night ideas.

7. Go to the library

The library can be a great source of free entertainment when you want to know how to save money fast on a low income. But it offers so much more that it deserves its own mention.

Of course, you can check out books, movies, and CDs. But most libraries offer other things, too.

For example, there might be community events, free local attraction passes, seeds for your garden, and more. Talk to your local librarian to see what is available at your library.

The library is my favorite frugal resource! If you aren’t sure where to find your library, then find it on Overdrive. Once you get your own library card, you'll be able to borrow books online via the Libby or Overdrive apps that are connected directly to your local library.

8. Try the cash envelope method

If you struggle to keep track of your spending, then the cash envelope method could be a great option. Learning how to budget money on a low income is very important and this approach can help.

The cash envelopes could help you realize how much you are spending. So it might open your eyes to harmful spending habits and teach you how to save money on a low income.

Once you know more about what you like to spend money on, you can work on adjusting those habits.

9. Find a fee-free bank

It's very easy to get stuck paying unnecessary fees. The median overdraft fee is $24.93. That coupled with other banking fees can lead to a leeching effect on your financial situation.

If you find that your bank is constantly charging fees, then it might be time to make a switch.

There are many banks that advertise free accounts without any associated fees. Why not take advantage of that opportunity? It could help you avoid any unnecessary banking fees down the line.

10. Evaluate your car costs

A car can come with thousands of dollars of annual upkeep and maintenance each year. In addition to a car loan with a payment, you also have to contend with several other expenses. Car insurance and repairs are constant costs.

You can lower these costs in a few ways and learn how to budget money on low income.

Comparison shop for car insurance

You might be able to save hundreds of dollars each year by switching to a different insurance company. Try shopping around to find the best deal.

Eliminate your car payment

When figuring out how to save money with a low income, try to pay off your car early. In the future, avoid financing a car when possible due to the high costs.

Use less fuel

You can cut down on fuel costs by using public transportation or biking to work. If you can, try to avoid using your car when possible and maybe stay home on weekends.

DIY car repairs

Although you might not want to do major repairs, think about taking care of basic repairs yourself. You can save money while learning a new skill!

Get creative when it comes to cutting your transportation costs, and your financial situation could improve.

11. Take care of your health

Healthcare is expensive. Unfortunately, there are not too many ways to cut down on your healthcare insurance costs.

However, a preventative attitude about medical problems can help you save money and enjoy a higher quality of life. It may even eliminate some unexpected expenses.

A few ways to practice preventative healthcare include:

  • Exercise
  • Eating right
  • Quit smoking
  • Sleep enough

If you have healthcare insurance, then take advantage of what that plan offers. For example, if it includes annual doctor visits, then make time for a check-up. You could also consider opening a Health Savings Accounts (HSA).

12. Try couponing

Couponing can be your way to buy exactly what you want for less money, and it can also help you learn how to save money on a low income. It is not too difficult to get started with couponing. Here are a few of the best places to get started (P.S these are affiliate links that help us grow!):


With Rakuten, you’ll be able to earn cashback from your everyday purchases. Many of their offers allow for between 1% and 12% cashback, which can be a lot when learning how to budget money on low income.


As you plan your grocery shopping, check out Ibotta for cashback deals in your area. Give Ibotta a try soon and you'll see your savings increase.


The BeFrugal app allows you to stay on budget while enjoying your shopping. You can earn cashback from over 5,000 stores. Plus, it will help you find coupons that apply to your purchase.

These are just a few couponing sites to help you get started. But there are many other sites that can help you save money through coupons, too.

13. Increase your income

So you've learned how to budget money on a low income. But at some point, you might not be able to squeeze any more pennies out of your wallet. Or you might want to create some more breathing room in your finances.

If you feel that there is no room to create savings in your current situation, then it might be time to increase your income.

Although it's not as simple as it sounds, increasing your income is completely doable. For example, one way to increase your income is through a side hustle. It could be the perfect way for you to earn more money without taking a leap from your day job.

Whether you want to walk dogs or build a blog, there is a side hustle that will work for you. Check out our step-by-step guide to side hustling to start building this extra income source.

The bottom line on how to save money on a low income

When it comes to how to save money on a low income it can be discouraging, but don't allow it to stop you from the future you want. Take a minute and be honest with yourself about your current finances and your financial goals.

Find the motivation to move forward with saving money.

Start by tackling one tip at a time on your own terms. Consider taking the first step today. Once you do that, find additional ways to save money on a low income as you make progress.

Finally, we have additional resources for families with a low income, and plenty of free financial courses you can use to improve your money situation.

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