Saving money is vital for anyone today. Without something set aside, medical emergencies and broken down cars hit twice as hard. Most financial experts will say that each person should have saved up enough money to live six months without income. With rent, bills, food, debts, and everything else, that’s a huge amount of money! To make things harder, what if you are trying to save, but don’t have a large income?
How to Save Money When You Don’t Have Much Income
Here are a few tips for anyone who is wondering how to save money when they don’t have a lot of disposable income.
- Take Free Money – Many employers will offer a 401(k) plan with matching contribution. Take advantage of this free money. Even if the employer only matches pennies on the dollar, those pennies add up.
- Keep the Change – Stop handing off those nickels and dimes to the person nearest to you. Keep a big, clear jar in the kitchen for loose change. Once every few months, take it to a change exchange and put that money into the savings account.
- Get Automated – Set up a direct deposit, similar to the 401(k), so that the amount you can save, even if it’s just a few dollars, goes directly to the savings account. That way, you never even have a chance to miss it.
- Keep Making Payments – If you are coming close to paying off a loan, keep making those payment amounts into your savings account after the debt is gone. You’ve learned to live without the money going to that debt. Keep it up.
- Coupons! – Shop with coupons. It takes very little effort to look for coupons online or in the store, but there are potentially huge savings to be made.
- Tax Refunds – As much as you want to use that tax refund to buy a new flat screen, put as much of it away as you can.
- Windfalls – Any unexpected income, such as back pay, gifts, and prizes can be saved as well. Set aside a portion to treat yourself, but put the rest into the bank.
- Treat Yourself – It’s advisable to treat yourself every once in a while. Get yourself something nice to show how much you appreciate you. If you try to do without, you may end up cracking and splurging way over your budget.
If you are struggling with overwhelming debt, you may benefit from speaking to a bankruptcy attorney. If you are unable to save money because every dime goes to debt, Chapter 7 bankruptcy may be a good option for you.
If you file Chapter 7 bankruptcy, you may be able to discharge most or all of your debts in as little as a few months. This would likely free you up tremendously, allowing you to start saving significant amounts again.
