How to Save Money Fast on a Low Income
Getting ahead can be hard when you don’t have much money to spare, especially when inflation means your basic cost-of-living expenses keep getting higher.
If you are wondering how to save money on a low income, here are some smart tips to help you take control of your personal finances and expenses so that you can achieve your financial goals.
Smart Money Moves That Speed Up Savings
If you’re ready to get serious about saving, there are clear steps you can take today to control your spending, lower your expenses, tackle your debt, and manage your money better. Read on to learn more.
1. Start a Budget
Controlling your spending begins with creating a budget. By tracking both your income and your expenses, a budget helps you understand where your money is coming from and how it is being spent every month.
An accurate budget will help you identify areas where you can cut back on spending or better allocate money so you can direct more money towards your savings goal. Not sure where to start? There are many excellent budgeting apps available that help you simplify this task.
Additionally, Listerhill has partnered with Banzai, a premier financial wellness resource. As a Listerhill member, you have free access to Banzai’s extensive catalog of interactive courses on topics like how to properly use credit cards or the 50/30/20 budgeting rule. Banzai also provides coaching and tools for financial planning to help you reach your financial goals faster.
2. Reduce Debt
Debt is the opposite of savings. It’s money that is in your pocket but belongs to someone else. Managing and reducing your debt is crucial if you want to start saving money for yourself. Here are some smart ways to start tackling your debt:
Pay Down Credit Cards
High-interest credit card debt can cost you hundreds of dollars a month. Pay off as much as you can to bring your balances under control. If you are struggling to make progress on paying off what you owe on multiple cards, consider consolidating your card debt into a personal loan.
Reduce Car Payments
A reliable car is an absolute necessity for most people, but auto loans can be a drain on your finances. Be cautious about signing up for high-interest or long-term auto loans offered by many dealers because it’s easy to end up paying far more than your car is worth when you go this route.
If you need to buy a car, consider financing your purchases through a credit union. You’ll often be able to negotiate a lower rate. If you’re struggling with payments, consider talking to your local union about a refinancing package to bring costs under control.
3. Lower Expenses
Tackling debt and freeing up money for savings is only possible if you reduce what you are already spending. Your budget will help you spot areas where you can reduce your monthly costs. These handy tips can help your money go a little further:
Eat In
Fast food and restaurant spending can add up fast. The average American spends $67 a week, or $3,459 a year, on eating out. It’s more work and a lot less glamorous, but you’ll save money and likely eat healthier by eating at home.
Cancel Subscriptions
Subscriptions for everything from streaming, gaming, and gym memberships have ballooned in recent years. Take a hard look at which services you actually use and how often—and then cut out those you use least.
Do It Yourself
Think twice about calling in a professional for something you can do or fix yourself. Many tasks—from changing your car’s oil to caulking a shower—are cheaper if you do them yourself. After all, labor costs are a major portion of most service bills.
Ask around. You’ll often find a friend who is willing to help you or at least lend you any special tools you need. Plus there’s almost always a YouTube video for every conceivable job out there!
4. Take Control of Your Finances
Take a hard look at where you keep your money. Smart choices about the financial products you choose can cut costs and help you save.
Switch to a Better Savings Account
Think that all savings accounts are the same? Think again. These days you can earn real interest on the money in your account while enjoying better access, service, and security than ever before.
Listerhill Credit Union’s regular Share Savings account, for example, costs just $5 to open and maintain and unlocks access to Listerhill’s full range of products and services.
Enjoy 24/7 access, account alerts, and automatic transfers—along with the knowledge that your money is fully insured up to $250,000 by the National Credit Union Administration (NCUA).
Find a Better Credit Card
Used wisely, a credit card can help you control spending and avoid overdrafts by allowing you to spread out expenses. Choosing a card with a lower interest rate will save you money each month and help you pay off your balance sooner.
Look for cards that offer the best rate as well as no annual fee. Also, keep an eye out for generous introductory rates or rewards if you are planning a major purchase or you want to transfer a balance to a new card to take advantage of a better rate.
5. Save Smarter
With your budget in place and your debt and expenses under control, you’ll soon see your savings start to increase. Now is the time to set your financial goals and get smart about how you choose to grow your money.
Open a Money Market Account
A money market account lets you keep cash separate from your regular monthly expenses and day-to-day spending but still have it instantly accessible. Best of all, you’ll earn much better interest than you would in your regular savings account.
You’ll need to have a little more saved to open a money market account, but once up and running, you’ll benefit from higher rates and faster compounding.
It’s a great place to stash cash for an emergency fund, save towards a car down payment, or to lay the foundation for a college education fund.
Consider a Certificate
A certificate of deposit (CD) allows you to start putting money away towards long-term goals, but without having to commit your money to a dedicated retirement or education savings fund.
A certificate is a term deposit, meaning you’ll need to commit your money for a specific period —anywhere between three months to five years. With a fixed interest rate and term, however, you’ll know ahead of time exactly how much you’ll get back and when. You’ll earn great interest and then when the term is up, you can access and spend the money on anything you wish.
Certificates offer a great stepping stone from day-to-day savings to enduring wealth. And, unlike stock market investments, your deposits remain fully insured up to $250,000, making a CD one of the safest money moves you can make.
6. Choose the Right Financial Partner
Where you keep your money matters. Large commercial banks are owned by shareholders who aim to make money by earning a profit on every transaction.
By contrast, credit unions are not-for-profit financial cooperatives owned jointly by their members. That allows local financial co-ops like Listerhill Credit Union to offer our members better yields on their savings and investments and lower rates on credit cards and loans.
It also means we offer friendlier, more personalized service and we take the time to build long-term relationships—because as a credit union, we base our success on the success of our members.
If you’re serious about saving, partnering with a credit union like Listerhill can give you the great rates, personal service, and long-term support you need to reach your financial goals.
Turn Limited Income Into Long-Term Wealth
Financial success comes from making smart choices and sticking with them, and that starts with your savings account. Listerhill Credit Union’s Share Savings Account offers a great combination of service, savings power, and security—while unlocking access to Listerhill’s full range of financial services.
You’ll need just $5 to open and maintain a Listerhill savings account. In return, you’ll get:
24/7 access to your money via ATM, phone, or online banking
Account alerts to help you track your money
Quarterly dividends to grow your savings
Full NCUA insurance up to $250,000
You’ll also be able to open a named My Goal Savings Account, which allows you to set money aside for a specific goal such as a vacation, a Christmas fund, or a new TV—while still enjoying all of the benefits of a regular Listerhill Share Savings Account.
Click below to learn more about how Listerhill’s innovative savings products and great personal service can help you turn your earnings into long-term financial success.
