How to save money on a low income
The contents provided on this page are for informational purposes only and do not constitute financial advice. Consider your personal circumstances and objectives before making any financial decisions.
In a world where the cost of living is on the rise and inflation seems to be the norm, managing finances on a low income can be challenging.
However, with the right strategies it's possible to make every dollar count!
In this article we'll explore practical tips and budgeting techniques tailored for those looking to save money on a tight budget.
Create a realistic budget to manage your low income
To start your journey to financial stability, it's important to create a realistic budget. Take note of your income and expenses, distinguishing between essential and non-essential spending. Allocate funds for necessities like rent or mortgage, utilities, groceries, and childcare. Budgeting apps such as the Beforepay budgeting tool in the Beforepay app could help you track your spending and stay within your budget.
Ideas for managing your everyday spending on a low income
1. Try the cash envelope saving system
For discretionary spending, consider using the cash envelope system. Allocate a set amount of cash for categories like entertainment, dining out, or miscellaneous expenses. Once the cash is gone, resist the temptation to dip into other envelopes. This physical representation of your budget can help curb unnecessary spending and keep you accountable.
2. Smart grocery shopping
Save money on groceries by planning meals in advance and creating a shopping list. Look for discounts, use loyalty cards, and consider buying generic brands. Online grocery shopping can also help you compare prices and avoid impulse purchases.
Consider going to your closest Farmer markets for fresh groceries at reasonable prices. Websites like Farmers Markets Australia help you locate markets near you.
Look into social services for low income individuals
1. Government assistance programs
Australia offers various government assistance programs aimed at supporting low-income families. Make sure you're aware of and accessing the benefits you might qualify for, such as Family Tax Benefits, Rent Assistance, or the Child Care Subsidy. Websites like Services Australia provide detailed information on available programs and eligibility criteria.
2. Community services
Many communities and charities offer assistance programs ranging from food banks to financial counselling. Reach out to local community centres or organisations like The Smith Family or St. Vincent de Paul for additional support. These services can provide relief during challenging financial times.
Make the most out of your extra money
1. Prioritise debt repayment
If you have outstanding debts, prioritise repaying them to avoid accruing interest and additional fees. Contact your creditors to discuss repayment plans or negotiate lower interest rates. Services like the National Debt Helpline can provide free financial counselling to help you manage your debts more effectively.
Consider using a Beforepay Pay Advance to access your pay early for only a 5% fixed fee as a safety net for those unexpected costs. Check out more financial resources here.
2. Cut out unnecessary expenses
Evaluate your regular expenses and identify areas where you can cut costs. Look into cancelling unused subscriptions or finding more affordable alternatives for services like insurance or utilities.
Consider using Beforepay’s Compare and Save tool or websites like iSelect or Compare the Market to assist in comparing prices and finding better deals.
Build a financial safety net while on a low income
1. Build an emergency fund
While saving may seem challenging on a low income, establishing an emergency fund is crucial. Start small and consistently contribute a portion of your income to this fund. In times of unexpected expenses, having a financial safety net can prevent you from falling into deeper financial stress.
2. Try out side hustles
Look for additional sources of income, such as part-time jobs, freelance work, or selling items online. Platforms like Airtasker or Gumtree can connect you with opportunities in your local community, allowing you to supplement your income and make ends meet more comfortably.
Additional tips for a well-rounded approach to saving on a low income
1. Childcare alternatives
Explore affordable childcare alternatives, such as family day care or community-based programs. Connect with other parents for potential child care exchanges, where you take turns watching each other's children. This might help you significantly cut down on childcare expenses.
2. Bulk buy and meal prep
Save on food costs by buying non-perishable items in bulk. Plan your meals for the week and batch-cook to avoid last-minute and expensive takeout meals. Portioning meals in advance can help control serving sizes and reduce overall food expenses.
3. Free and low-cost activities
Find entertainment that doesn't break the bank. Look for free community events, explore local parks, and take advantage of libraries, which often offer free activities for children. Websites like Meetup can help you discover low-cost social events in your area.
4. DIY home repairs and maintenance
Instead of hiring professionals for minor home repairs, learn to tackle basic maintenance tasks yourself. Online tutorials and guides can provide step-by-step instructions for simple repairs, saving you money on service fees.
5. Review and update insurance policies
Regularly review your insurance policies to ensure they still meet your needs. Shop around for better rates on health, car, and home insurance. Websites like iSelect and Compare the Market can assist in comparing insurance quotes.
6. Use second-hand markets
Save money on clothing, furniture, and household items by exploring second-hand markets, thrift stores, or online platforms like Gumtree. You can often find quality items at a fraction of the cost of buying new.
7. Take advantage of educational resources
Access free or low-cost educational resources for your children. Online platforms like Khan Academy offer a wide range of educational materials, and public libraries often host free educational programs and workshops.
Disclaimer: Beforepay Group Ltd, ABN: 63 633 925 505. Beforepay allows eligible customers to access their pay and provides budgeting tools. Beforepay does not provide financial products, financial advice or credit products. The views provided in this article include factual information and the personal opinions of relevant Beforepay staff and do not constitute financial advice. Beforepay and its related bodies corporate make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this blog post and do not accept any liability for any loss whatsoever arising from the use of this information. Please read our Terms of Service carefully before deciding whether to use any of our services.
