19 Ways to Save Money on a Low Income


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Saving money can be hard, no matter how much you earn. But there are plenty of ways to cut costs and save money on a low income. It may require some simple changes to your lifestyle or some bigger cutbacks to initially add to your savings pot, but it can be done.

Whether you want to save for a new car, new home, or even something smaller like a new phone, it’s never too late to start saving money. Plus, you can also consider some ways to earn passive income, this can help you achieve your savings goals and also increase your income.

19 Ways to Save Money on a Low Income

1. Plan a Budget Sheet

The first step to saving money is knowing where your money is going. Track your income and expenses for at least 2 months to get an accurate idea of where you can cut back. Once you know where your money is going, you can start planning a budget.

For example, you can narrow down your expenses as a category and provider, then work out which ones are costing you the most. From there, source a cheaper alternative or try to contact the company and tell them you are switching (they sometimes offer cheaper deals to keep you as a customer).

You need to understand exactly how your money flows in order to make the right changes. Then you can factor a budget in; so if you had $300 left after income and expenses have been calculated, you can distribute that as you see fit (30% in long-term savings, 30% in an emergency fund, etc.).

2. Create a savings account

You should have a savings account that you don’t touch to help you hit your targets quicker and make saving money easier. Ideally, this will be a long-term savings account with high-interest rates so you can make the most of your money. However, you can also have separate savings account for short-term goals.

A savings account is vital when it comes to saving money on a low budget. It will keep your money separate and allow you to earn interest on that money. You should try to avoid dipping into your savings at all costs and if you have any extra income, put that into savings too.

3. Automate your savings

One of the best ways to save money on a low income is to have it taken out of your account automatically before you even see it. This strategy can work well if you get paid monthly. Automating your savings means that you’re less likely to spend the money because it’s not readily available to you.

You can set up a standing order with your bank or use an app like Acorns, Chime, or Digit to automate your savings. This is a great way to make sure you’re saving regularly without having to think about it.

4. Use cash instead of credit

When you’re trying to save money, it’s important to be aware of your spending. One way to do this is by using cash instead of credit. When you use cash, you’re more likely to be aware of your spending because you can physically see the money leaving your hands.

Whereas credit allows you to pretty much purchase anything you want without the initial funds available.

5. Cut Back on Luxuries

If you want to save money, you may have to cut back on some of the luxuries in your life. This could include things like eating out, buying coffee every day, or getting your nails done.

These may seem like small purchases at the time ($5, $10, etc.) but by the time the end of the month comes around, you could end up spending $100+ on these ‘extra luxuries’ without even realizing it.

This can also be narrowed down to your grocery shopping, such as purchasing $20 shampoo instead of $1 shampoo, and other luxuries you purchase when you shop. These cutbacks can do wonders for your savings.

It’s important to remember that you don’t have to cut out all of the luxuries in your life, just some of them. It’s best to try and cut back on the most expensive ones first. And, if you can find cheaper alternatives to the things you love, then that’s even better. For example, instead of buying coffee out every day, invest in a coffee maker that will save you money in the long run.

6. Make your lunch at home

Another way to save money is by making your lunch at home instead of buying it. This can be a big saving if you’re someone who buys their lunch every day.

Packing a lunch is often quicker and easier than you think. And, it doesn’t have to be boring either. There are plenty of recipes online for delicious and healthy, packed lunches.

If you’re struggling to think of ideas, start by packing leftovers from dinner the night before. This is an easy and tasty way to save money and time.

7. Use coupons and shop sales

If you really want to be savvy with your savings, you can use coupons and wait for sale events. There are plenty of coupon websites out there that offer cashback and discounts at various stores. You also have the option of paper coupons and manufacturer coupons to save on individual items.

Often, sites will give you coupons just for joining their email address. So, sign up at one store to get a coupon, then next week do it at a different store. It might not be convenient but it can save you money. This is one of the easiest ways to save money on a low income.

8. Discover second-hand items

One way to save money is by buying second-hand items instead of new ones. This could be things like clothes, furniture, books, and more. There are plenty of places to find second-hand items, such as thrift stores, garage sales, and online marketplaces like eBay.

It’s best to avoid new purchases altogether when trying to save, but if you need to upgrade your clothing or get something that’s essential, consider secondhand to save money.

9. DIY where possible

By doing things yourself instead of paying someone else to do it, you can potentially save a lot of money. It’s worth noting here – don’t try anything that you are not comfortable with OR that could potentially worsen the problem. If you make an issue worse, you could end up having to pay double what you would have initially.

That being said, sometimes there are DIY jobs that are more simple than they look, especially with a YouTube tutorial.

10. Carpool or use public transport

This one is key, especially if you live in a city. If you can, try and avoid using your car as much as possible or carpool with someone. This will save you a lot of money on petrol, parking, and car maintenance costs.

Public transport is also a great way to save money, especially if you get a monthly or yearly pass. This will work out cheaper than using your car and you can use the time on the bus or train to read, work, or relax.

Another option is to use a bicycle or electric scooter, this will depend on the distance. But all of these options are not only good for saving money, but they are also good or better for the environment.

11. Cancel unnecessary subscriptions

Some people find themselves having subscriptions to Netflix, Amazon Prime, YouTube TV, Spotify, and the list goes on. These subscriptions will severely affect your monthly budget if not kept in check. If you only use one or two of these platforms, consider canceling the ones you don’t use.

I would recommend canceling all of them and finding other ways to enjoy entertainment. You could even watch your favorite shows at a friend’s house if you really can’t miss out. Otherwise, enjoy board games, outdoor activities, and anything else you can do to replace the need for subscriptions.

12. Search for support plans for low-income households

Some companies out there offer special prices for low-income households. You could get a discount on your energy bills, transport costs, and more. It’s definitely worth doing some research to see if any of these options apply to your circumstances.

13. Cut back on energy-hungry appliances

Large appliances use a lot of energy and can really drive up your energy costs. If you have appliances that you use all the time or even use A/C-heating every day, consider reducing the amount you use them. Anything with a heating element generally uses a lot of energy, so try and avoid using them as much as possible.

You could also look into getting more energy-efficient appliances. This will cost you more money upfront but in the long run, it’s one of the best ways to save money on a low income.

14. Consider using multiple bank accounts

Using multiple bank accounts can help you manage your money better and improve your savings. You could have a separate account for your savings, bills, and spending money. This will help you make sure you always have enough for your essentials and stop you from overspending.

Read more about using multiple bank accounts.

15. Reduce debt where possible

Debt can really put a strain on your monthly budget, so it’s important to try and reduce it wherever possible. Although this is going to be difficult if you are on a low income, it’s more of a longer-term goal. This could mean making bigger monthly payments, consolidating your debt, or finding other ways to reduce what you owe.

16. Try to lower insurance costs

This one is a bit more difficult, as you can’t really change your insurance without changing your circumstances. But if you are on a low income, you might be able to get help with your insurance costs. There are a few options available, so it’s definitely worth doing some research to see if you could get help with your car insurance, health insurance, or life insurance.

17. Never purchase on impulse

It’s easier said than done, but this is the easiest way to blow your savings in a matter of minutes. If you see something you want, wait a day or two before buying it. This will give you time to think about whether you really need it and hopefully avoid purchasing it.

A good trick here, relating to the multiple bank accounts, is to have an account for ‘personal spending’ and only take that card shopping with you. This way you will never spend money that is meant to be saved.

18. Refinance your mortgage