5 Tips for Saving Money When You Have Low Income

by Connie Mei · 44 comments

low income tips

Most of us want to save money so we can build wealth and plan for the future. We have goals we want to reach (like traveling) or things we want to buy (like a dream home). However, this can seem impossible when you’re surviving on a low income.

According to CNN, 25 million American households are living paycheck to paycheck. When money is tight, saving any amount can be the last priority on your list. You’re just trying to get by.

So how do you save more money when you’re making minimum wage? How can you reach your financial goals on a low income?

When it comes to finances, it’s important to not only think about the now but also the future. Even if you’re earning a minimum wage, you can still save little by little. Here’s how:

1. Tackle High-Interest Debt First

In order to start saving more, you have to tackle your debt head-on. Specifically high interest rate from personal loans, or credit cards, because they force you to pay outrageous fees and interest charges.

When paying off debt, you need an attainable, yet challenging plan to pay it off. Start by prioritizing your debt so you’re paying off the ones with the highest interest first.

Then, as you go forward, avoid accumulating any more high-interest debt, especially credit cards.

2. Cut Down Your Biggest Expenses

Trying to save money when you have a low income can be very difficult. Sometimes it feels impossible to cut down even a dollar or two every month.

Aside from the usual money-saving ideas, like cooking meals at home and canceling your cable bill, what more you can do? Instead of trying to cut back your small expenses, focus on the larger ones so you can make more of a significant impact.

For most people, housing costs tend to be the biggest part of their expenses. If you’re renting, consider downsizing to a smaller home or living with roommates.

If you own your home, take a look at whether or not refinancing your mortgage for a lower rate would be beneficial. You can also rent out a room or parking spot for additional income.

David’s Note: Make sure to understand the terms of a refinance though. What generally happens is that along with a reduced monthly payment, a refinance also extends the loan term. Be comfortable with the fact that it will take you longer to pay the loan off if this is the option you choose. Also remember to shop around for the best deal, because there are a ton of people willing to help you get a refinance and some will charge less than others for their services.

And I know Connie just said to work on the big stuff, but I argue that you need to cut out the small stuff too, especially if the costs are recurring like a cable TV bill. Do you absolutely need to pay for it? There are many ways to reduce the TV subscription costs, and it only takes minimal effort for a sizable benefit.

3. Take Advantage of Free Money

Take advantage of “free money” when you can. As a family with a low income, you may qualify for the earned income tax credit (EITC). According to the IRS website, the EITC can be a large refund on your taxes, helping you keep more of what you earned. Sometimes even as much as a few thousand dollars.

You should also look into a 401K at work and see if your company matches up to a certain percentage of your contribution.

If they do, you should take advantage of it and start saving as much as possible. The company match is basically free money that will help you save towards retirement.

low income savings tips4. Keep Your Budget Lean

To save more, you have to take control of how much you spend. Choose the categories you want to indulge in and keep the rest of your budget as lean as possible. You’ll have to make sacrifices but it’s not impossible.

Just learn to spend in moderation. For instance; cut back on how often you dine out. You can still enjoy a nice meal at a restaurant, just not multiple times a week.

5. Start a Side Hustle

If you can’t cut costs anymore than you already have, consider diversifying your income by starting a side hustle to earn extra money. Aside from your full-time job, you can get a job on the side to provide another income source.

Many side hustles can be done right from your own home in your spare time. Think about what you’re good at doing, what kind of hobbies can earn money, or what you already enjoy that can be turned into a side job.

Popular side hustles include freelance writing, data entry, and graphic design.


Saving money when you make minimum wage is certainly hard but can be done. It’s important to understand what your priorities are, and create a values-based spending and saving plan.

Once you do, you’ll be smarter and savvier with how you spend money and ultimately, be able to save more.

What’s another way to save more money while earning minimum wage? What are some tactics you’ve tried in the past when your income was low?

Want more tips? Start a budget.

Budgets, money tracking, and careful thought about your spending are most important when you have very little money. Thinking you’re too poor for a budget is a way of avoiding tough decisions. But making those difficult choices will actually help you feel more in control and happier about your finances.

If you’re living on the financial edge, try these budgeting strategies to make sure that you control your money, rather than vice versa:

1. Make friends with your calendar. It doesn’t matter whether you use the kitten-themed wall calendar you got for Christmas, a web-based calendar, or the calendar on your phone—but you must begin to organize your money according to time. Record when you receive your paycheck, when bills are due and when automatic payments are made. This can help you to find the thin spots in your finances during the month.

From there, you can often request changes to due dates in order to make certain that you have the money when you need it. For example, if you know that having “extra” cash in your checking account will be too much of a temptation, move your bill due dates to coincide with your paychecks so that any money left over after bills are paid isn’t needed for the next round of expenses.

2. Track your spending for a month. Your next step is ridiculously simple, and yet it can be very difficult to do. For an entire month, record every single cent that you spend. Whether you go low-tech with pen and notebook in hand, or high-tech by using a free money-tracking program on the internet or your smartphone, a month of tracking will give you a much better idea of where your money goes.

Another positive side effect of tracking your spending is that it gives you a moment to think about your purchases before you make them. You might just walk on by the coffee shop when you realize you don’t really want to write down the cost of $4 coffee on your tracking sheet.

3. Cut judiciously. Once you know why there’s too much month left at the end of your money, you’ll know what to cut out of your monthly expenditures to get back to living within your means. Some cuts will be easy. Restaurant meals and snacks can be cut out in favor of cooking at home. Insurance costs can be made more manageable by raising your deductibles. Services you don’t use—like that gym membership or the extra data plan on your phone—should also be on the chopping block.

But don’t forget about cutting costs in basic areas, as well. You can often lower your utility payments by making sure you turn off lights and unplugging power vampires, for example.

4. Start planning for saving now. Having an emergency fund is an essential part of being financially healthy, so start to plot a path to save for it even if you can’t spare the change right now. That way, you can start adding to savings as soon as you don’t run out of paycheck.

5. Increase your income. If you have cut your spending to the bone and are still having trouble making ends meet, then it’s time to consider other sources of income. That could mean asking for overtime at work, starting a side hustle, selling off some of your possessions, or looking for more lucrative work.

If you want to live within your means, you need to be mindful of your income and spending. Otherwise, it’s impossible to get off the cycle of living from one paycheck to the next.

Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence.

They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.

Editor's Note: Did you know about the service called $5 meal plans? For $5 a month, they send you recipes of delicious, healthy, yet cheap food that costs just $5 a meal.

Several of my friends signed up and they are able to eat at home more because the instructions are easy to follow, making everything convenient. The deal also comes with grocery shopping lists, which saves them so much time. Check it out yourself by clicking here and you too may be able to save more and become healthier at the same time.

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current Verizon FiOS promotion codes and promos to see if you can save more money every month from now on.

{ read the comments below or add one }

  • sruthi says:

    very informative

  • sruthi says:

    thanks for sharing

  • thara says:

    Make use of any and all free resources in the community etc. I found that going to a food bank at my local church on my own and that is a step in the right direction. My first bit of sound advice is to make a weekly shopping list as well.
    Meal planning is crucial to saving you some more money left right and centre. Identify what sort of things to cut back on etc. Perhaps you can cut down on the overall costs at the local cinema by taking your own healthy snacks and drinks instead.
    Same applies to general family outings to zoos and the like. Ensure you know about the cheaper or free alternatives. Avoid expensive meals at all times. Take a free picnic hamper.
    Print off tickets in advance. Grow your own fruit and veg. You can even pick up really fresh and cheap fruit and veg from weekly farmer market stalls or at a recommended farm shop in a garden centre. Cut back as far as possible too.
    Ditch the rather expensive fruit and vegetables in a supermarket. I used to borrow some fruit and veg from my neighbours, friends and family members. You can even order boxes of fruit and veg. Seeds can be purchased in a garden centre or from certain shops.

  • pravin says:

    “Agreed with these steps. The lower you keep these expenses, the simpler it will be to adhere to your financial plan. These options might be the last approaches you take, still, they truly can help you get a good deal on your bills every month. “

  • Jay Ren says:

    That’s a good point you made about downgrading the bigger things in your regular budget. Yes, you can easily get rid of smaller things, such as the sandy bar at the end of a shopping trip. But, switching to a car with a cheaper monthly cost could also help in the long run too. My parents did that for a while and it saved them big so they could afford little things that made life a little more special for us kids.

  • Jawad Ahmed says:

    everyone is teaching to pay debt ASAP, save etc which will keep you and your generations poor for ever. Debt is good when used wisely. Most of the corporates are in debt. don’t worry about Debt. instead Follow this formula Earning – Saving = Expenditure and then invest the saving. start side business along with full time job. don’t start second job. attend financial seminars , attain financial literacy. understand what is real liability and asset. invest on reading and learning financial instruments, Tax adjustments. your business can buy what you want but you cannot with your pay check. it is not your Boss’s job to make you rich, so don’t ask for pay rise , it will help a little. everyone has two best things in life – time and Brain. use them wisely to get rich. due to increasing technology and global reach it is easy to make money now than earlier. if you go on saving the value of money is reducing daily due to inflation and by the time you are old your saved money doesn’t have that value, so invest wisely. remember that first million is hardest then you will have the free money. find a problem and provide solution which will turn into business. scale the business to grow faster. you don’t necessary have to have new idea but there should be better idea for business. we are living in information era, so information is money. decide when to come out of daily rat race i mean your full time job. target a retirement date and work on. finally Earn – save- Learn -invest- protect – scale and grow rich.
    Best of luck.

    • Jawad Ahmed says:

      in continuation of above comment i would like to add few more lines.

      if you want respect give respect and if you want a blow give a blow . same follows with money. if you want money give money and it will come back. i mean give charity and help poor, you will see how the money comes back.

  • RigidFox says:

    These tips are really helpful. Even I use to save money using online coupons. It’s the smartest way to make everything cheaper.

  • Simon Jones says:

    These tips can significantly cut expenses and soar savings. Thanks for the amazing tips
    Another way to save money is with various money saving apps like Yook, Ebates and Honey

  • Jackson says:

    Saving money is an important thing for everybody’s life. If somebody saves something at the time of study in college or school, at that time most of the children save the money from their pocket money or in other sources and it can help them in the future. Some children like to go by the school bus and it can cheap than a car cost so these types of things give more suggestions about money-saving.

  • Sam Bill says:

    These tips are really helpful. Even I use to save money using online coupons. It’s a smartest way to make everything cheaper.

  • OnlyDiscountCoupons says:

    Great tips. The secret is to get serious about saving money and be consistent. The income is not a reason not to save (a lot of high-earners have almost no savings, so the problem is with how you budget and how you stick to it). Getting a second job (or a side hustle) is a great way to earn more income and diversify your revenues. Who knows, maybe one day the ‘hustle’ turns into a profitable business.

  • M says:

    Cable, meals out, data plan, GYM MEMBERSHIP? I don’t think most low income earners have these? The only extra thing I have is internet service and even that is close to being cut. These are all pretty obvious and I assume anyone seeking this info has done most of this. This is just an ad for whatever thing was thrown in at the end. The side hustle thing is good advice, but it’s much harder in rural areas in my opinion.

    • Nbh says:

      Agree! This assumes a different definition of pay check to pay check than I’ve ever known. What about people who are on some kind of government support yet also working, aka the working poor? What plan is there for them? Not realistic tips.

  • Daniel says:

    I think this is one of the most helpful posts I read so far. Thank you for this very practical tips. I think I already reach som success while implementing it.

  • DNN says:

    Saving money is everything when you’re down and out. A “side hustle millionaire” in the making values every dime, dollar and sent they get their hands on because it’ll teach them to have a greater respect for saving money. Agree? 🙂

  • Bria says:

    Great article!

  • Michele Cooper says:

    The easiest way to save is to pay yourself first. If you work for an employer that offers a 401(k) or 403(b) plan, nothing could be more simple than signing up to have a portion of your paycheck sent directly to your retirement account. You’ll never miss it. Thank you for the article.

  • Abigail says:

    Great post! I really love your tips and they are damn useful. It’s really hard to save a certain amount of money from your income. Your post is highly informative for everyone,
    Thanks for sharing your awesome post 🙂

  • Abigail says:

    Pretty nice suggestions! but not all of these are easy to do, You must work wisely and track your budget and highlight your extra expenses and try to cut it down. Your post definitely gonna help me a lot.
    Thanks for sharing such a great post!

  • Nomsa Jamda says:

    I would like to received some advises

  • Sufiyan Ali Siddiqui says:

    According to me investment in something that will give you great benefits by investment at initial stages like investment on limited natural resources example gold and land. Addiction like smoking and drinking Alcohol should be eliminated from life and if we calculate it will be great saving and probably future harm and expenses can be eradicated easily.
    Make up the mind that I want to save money be happy and don’t get frustrated. Work smart don’t hesitate to get advice from boss and elder people and experts. Get into mutual understanding and create a group and all group members should put cash and than lottery system so that when the name is pulled out in lottery the lucky one gets the benefit moreover in a year every members can get that huge amount and luckily this system gives opportunity to everyone to grow rich. The system is designed to get rich. I am really new to this probably my comment might not be that appealingly strong I really felt great after reading blog and. beautiful comments from everyone and most important of all is get into action. Hope everyone in this world live happily. Keep smiling.

  • Jason says:

    Awesome article. It’s really motivating when you involve in extra work to collect some money that helps you to pay off extra bills. I am currently working on Dropshipping, American opinion surveys, swag bucks and other. Have a blog earn income and also learn new things. Great. Thanks for sharing article.

  • matabo says:

    Thanks for all u advise but how do u grow from that low income to stable success life

  • sagar nandwani says:

    I think that these are hard decisions that some people just aren’t ready to make.

  • Mohammed Ali says:

    I appreciate the quality of this article. The big point you should mention is to use Credit Card as much as you can (WISELY).

  • Adebayo Oluwole says:

    A bird at hand worth a thousand in the bush. While one may find it difficult to earn more income, he can manage what he has more efficiently. Controlling of spending is an effective way for saving

  • Laura says:

    Try looking for a Community Action agency in your area, if you have trouble finding one online, try dialing 211, its a directory of community resources. The Community Action in my county has programs for computer classes, match savings program, budget coaching, getting ahead – a class on achieving your goals, credit and home purchase counseling, and more.

  • Saani Mohammed KAMIL says:

    i am a Ghanaian worker on a low income and living in a deprived area
    Which I can’t do any aside business there and wanting advice on how to depend on my low income to archive my goals

  • Chrissi says:

    I consider myself lucky enough not to be living paycheck to paycheck, but I fear being in that situation, so try to have a bit of a back-up.
    I participate in online opinion questionaires such as Globaltestmarket or Valued Opinions, and get my pay-out from them in the form of Amazon gift vouchers, which come in really handy when things are tight and my daughter needs stuff for school.
    I am also with a site called Qasa, which may only be available in Germany, but they pay out cash for clicking on website links – okay, it isn’t much, but I got €20 from them last year.
    As my Mother used to say, “every little helps!”

  • Zuzupetals says:

    Great topic! Thanks for addressing lower income struggles.

    Habits most of us can do but I’d say especially lower incomes:

    1. Get as organized as possible! As said above, have a budget. Discipline yourself to live within it. Trouble shoot. Become unstoppable in your quest for financial wellness.

    2. Become a saver! If you are behind on bills you’ll need to get current but if all your obligations are paid up put aside some savings and if possible first each check / month even if it’s simply a few dollars, start the habit and then let it accumulate.

    I’ve been inspired by my grandma who saved 20% of everything she made a a school teacher. She always had money for meeting various family needs as they arose. She worked hard to tend a large garden and put up produce. Some may not have room for a garden but possibly some patio pots? Grow your own tomatoes for example. I tell myself often “I am a saver” (like her). It may take longer than others I know who have more than me but I don’t focus on keeping up with or competing with them. My accomplishment with personal finance mean all the more because I’ve done it on less.

    Secondly, it really does change everything to have $5k to your name. This is my current goal. My stress levels have decreased and peace of mind begins to propel me to create more of that. This $5k is not for anything that isn’t a true emergency. I’m guarding it and plan to help it grow to $20k.

    As you are getting more organized review and tweek your budget month to month to better meet your evolving needs and values. Mine stays much the same but I feel less trapped in knowing I can adjust categories if I find it helps better meet true needs.

    3. Along with saving some cash, work to build up a reserve of foods you actually eat. This helps with meal planning (a cost saver) and having a fall back when you have an unexpected expense or change in income. You can adjust groceries that month if you need.

    4. If you haven’t done so already, cut the cable. Use the library, Netflix and free apps. I like vidAngel for the editing feature. It’s $1-2 per rental. If you are putting money into savings and paying all your bills reward yourself with something small like a show or even better free time outdoors doing something budget friendly that you enjoy.

    5. A lot of cell phones are lowering costs. Make sure you aren’t over paying.

    6. Same with shopping for insurances as others have mentioned. Being properly insured is important to me as a lower income person so I don’t scrimp to have less coverage but do shop periodically for competitive ones.

    7. I took up delivering pizza for some extra earnings. My car is not new but runs well. I don’t know that I’d want to run through a nice car this way but in my situation it works. I work 3 nights a week for a few hours. It cost approx $100 to buy my uniform. I set aside out of earnings my mileage for repairs and gas and then deduct it on my taxes. I’ve earned approx $400 – $900 a month give or take after mileage. I asked for the short shift so I could still get to bed before too late. I didn’t want to burnout so I stay with a very part time plan. You could do more or less depending on your goals. It’s helped pay for some health initiatives (one reason I’m currently lower income). Its an
    option to help pay off your debts! Build up 6 mo of reserves! Fund a
    Roth IRA! Finish your degree. Fund a side business.

    Wishing you health and financial strangth as a saver!

    • Alicia says:

      All great ideas. I’ve lived my whole life being a low income person. Always thinking of new ways to get ahead or cut back. How to live paycheck to paycheck. Somehow I manage but I do have to say I have had help from family or friends when it gets so over welming. I do well for awhile. Then doom my car won’t pass inspiration that’s when I need help. Savings is not enough so it seems every 6 months I start over to save if any. I pray a lot to make a dollar to two to keep going to keep myself from being homeless. I’m blessed .not easy but I manage not to bother people with my problems

  • Gabriel says:

    I have always found that looking at yourself as a business is the best way to budget. If you look at yourself as a business, you begin to do things naturally that cut cost. The biggest concern for business is cutting cost so naturally you will find ways to live cheaper. For instance, rather than an apartment, get a room mate. Rather than eating out, cook for the week. Rather than just having a job, find a way to start a micro business. etc.

  • Toby says:

    This has been so informative and very direct at dealing with the problem of doing a budget on a low income. Every point is clear and simingly easy to apply, the only challange is one`s own drive to make it happen. Thanks for the info.

  • Kellie says:

    In talking to people in my circle — those who earn very little as well as good wage-earners — the biggest obstacle I see in their paths is attitude. If a person has decided they are a victim, that’s where they will get stuck every single time. Always harping about bills, bills, bills. Well where on earth did the bills come from? Your own choices. I know some things cannot be avoided, but this is where emergency savings is critical and makes the difference between a crisis and an inconvenience. You are only a victim if you choose to be by refusing to acknowledge your own contribution to your problems and refusing to save anything for the future.

    I know someone who has earned (and spent) an extra $240,000 over the course of the past decade (in addition to a regular, well-paying job which covered living expenses); has absolutely nothing to show for it, and STILL racked up credit card debt along the way! I heard Dave Ramsey say once, You can’t out-earn a spending problem. This is the perfect case in point. Great article! thanks!

  • Michelle says:

    These are all great tips. I think making the sacrifices is where people get stuck.

  • Argie says:

    This article was refreshing – more realistic for me than most articles. Sometimes you get hit with an unexpected bill – such as needing a plumber if your pipes freeze – and living paycheck to paycheck you don’t have a cushion for emergencies. All the advice columns say you should have an emergency fund, but that just isn’t real for a lot of people. And even if you do have one, once you get hit with an emergency it takes a long time to build it up again. In the past, I have gone through the house and rounded up everything that hadn’t been used yet (a package of screws to fix a doorway, a blouse that hadn’t been worn and still had the sales tags, some shelving that hadn’t been put up, a bucket of never-opened paint that wasn’t custom mixed, a package of just-bought curtains) – and came up with $80 to get my sewer pipes reamed out. This is desperation, but it helped in that emergency. Some people say you should sell everything you don’t need, and that’s good advice if you are ready to do it, but it takes time to make a sale and you always take a hit financially and often emotionally when you have to part with things you really want to keep. And a warning about side hustles. If you accept money for doing something, you are setting yourself up as a professional, and if the job you are doing is something that people get professional accreditation for, you can wind up in hot water legally. I don’t know how it works everywhere, but in this area you have to have accreditation to babysit other people’s children, especially if you advertise. Same for other jobs that people used to do with no hassle. Look into the legal requirements before you invest in setting yourself up for a side job from home.

  • Jon @ Penny Thots says:

    I’m a big proponent on cutting your big expenses. Sure you can save some money when you cut your smaller expenses, but the real impact comes from slashing your insurance premiums or refinancing your house.

  • Taylor Lee says:

    Good advice! I would also recommend trying to get into an entry-level job with job training (e.g. something in the trades).

  • dojo says:

    Great tips. The secret is to get serious about saving money and be consistent. The income is not a reason not to save (a lot of high-earners have almost no savings, so the problem is with how you budget and how you stick to it). Getting a second job (or a side hustle) is a great way to earn more income and diversify your revenues. Who knows, maybe one day the ‘hustle’ turns into a profitable business.

  • Emily @ Simple Cheap Mom says:

    I think this was a great post. There are a lot of tips out there, but most you’re making enough income to assume you have more choices. Although we’re not living pay cheque to pay cheque, I hope this helps out those who are.

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