You can save money on a low income by making a budget, cutting costs, and looking for extra ways to earn. Start by tracking your spending and seeing where you can trim expenses. Look for cheaper deals on things like phone plans and insurance. Try to cut back on takeaway meals and make more food at home.
A spokesperson for Accumulate.com.au shared their top tips on how to save money on a low income, “setting aside even a small amount each week can add up over time. Try the envelope method to divide your cash into categories. You might also look into side jobs like dog walking or babysitting to boost your income a bit. You can build up your savings even on a modest wage with some smart choices.”
The following tips have been shared with Money Choices to help our readers who may be struggling to make ends meet.
Establishing a Frugal Budget
Creating a budget is key to saving money on a low income. It helps you track your cash flow and find areas to cut back.
Assessing Your Income and Expenses
Start by listing all your income sources. This includes your salary, any government payments, and side gigs. Next, write down all your expenses. Split them into fixed costs like rent and bills, and variable costs like food and entertainment.
Use a budget planner to help you organise this info. Many banks offer free online tools, or you can use a simple spreadsheet.
Look closely at your spending habits. Are there areas where you’re overspending? Can you cut back on non-essentials? Small changes can add up to big savings over time.
Prioritising Needs Over Wants
With a clear picture of your finances, it’s time to separate needs from wants. Needs are things you can’t live without, like food, shelter, and basic utilities. Wants are nice to have but not essential.
Focus on meeting your needs first. For wants, look for cheaper alternatives. Instead of eating out, try cooking at home. Swap paid entertainment for free options like parks or libraries.
Be strict with yourself, but don’t cut out all fun. Set a small ‘fun money’ allowance to avoid feeling deprived and overspending later.
Setting Realistic Savings Goals
Now it’s time to set savings goals. Start small if you’re on a tight budget. Even saving $10 a week can make a difference over time.
Use the SMART method for goal-setting:
- Specific: “Save $500 for emergencies”
- Measurable: Track your progress weekly
- Achievable: Make sure it fits your budget
- Relevant: Choose goals that matter to you
- Time-bound: Set a deadline, like 6 months
Try saving a percentage of your income rather than a fixed amount. This way, you’ll save more when you earn more, but less pressure when money’s tight.
Remember, any amount saved is better than none. Be patient and celebrate small wins along the way.
Smart Shopping Habits
Saving money while shopping takes skill and planning. These habits can help you stretch your dollars further and make the most of your income.
Utilising Discounts and Coupons
Finding and using discounts is key to smart shopping. Keep an eye out for sales at your favourite shops. Sign up for email lists to get early notice of markdowns. Many stores offer loyalty programs with special deals for members.
Coupons can slash your spending too. Check newspapers and online coupon sites for offers. Some shops have their own apps with digital coupons. Don’t forget to stack coupons with sales when you can.
Price matching is another handy tool. If you spot a lower price elsewhere, ask if the shop will match it. This works best for big-ticket items like appliances or electronics.
Embracing Second-Hand Shopping
Buying used items can lead to big savings. Op shops and charity stores often have great finds at low prices. You might score name-brand clothes or quality homewares for a fraction of their original cost.
Online marketplaces let you buy second-hand too. Sites like Gumtree and Facebook Marketplace have loads of pre-loved goods. Just be careful when meeting sellers in person.
For kids’ stuff, try toy libraries or clothes swaps with other parents. These options let you refresh your child’s wardrobe or toy box without spending a cent.
Planning Groceries and Meals
Smart grocery shopping starts with a list. Write down what you need before you go to the shops. This helps you avoid impulse buys and stick to your budget.
Meal planning goes hand in hand with your shopping list. Plan your meals for the week and buy only what you’ll use. This cuts down on food waste and saves you money.
Buy in bulk for items you use often, but only if you have space to store them. Bulk buying can be cheaper per unit, but not if food spoils before you eat it.
Compare prices between brands and shops. Home brand products are often just as good as big names but cost less. Don’t forget to check unit prices to find the best deal.
Reducing Household Expenses
Cutting back on everyday costs can make a big difference to your budget. Here are some key ways to trim your household spending.
Minimising Utility Bills
Start by looking at your power usage. Switch off lights and appliances when not in use. Use energy-efficient bulbs and appliances with good star ratings. Set your heating and cooling to sensible temperatures – around 18-20°C in winter and 24-26°C in summer.
Look into getting better deals on your utilities. Ring your providers and ask about discounts or cheaper plans. You might save by bundling services or paying on time.
Check for water leaks and fix dripping taps. Take shorter showers and only run full loads in your dishwasher and washing machine. Collect rainwater for the garden if you can.
Review your phone and internet plans too. You might not need as much data as you’re paying for. Compare deals from different providers to find cheaper options.
Downsizing and Decluttering
Take a good look at your living space. Do you need all that room? Moving to a smaller home or flat could cut your rent or mortgage payments. It might also lower your utility bills and maintenance costs.
If moving isn’t an option, think about renting out a spare room. The extra income could help offset your housing costs.
Go through your stuff and sell things you don’t use. Try online marketplaces or garage sales. You’ll earn some cash and have less to clean and store.
Cut back on new purchases. Before buying, ask if you really need it. Try borrowing or renting items you’ll only use once in a while. This saves money and reduces clutter.
Increasing Income
Boosting your earnings can help you save more money on a low income. Let’s look at some ways to bring in extra cash and get financial support.
Exploring Side Hustles
Looking for extra work can bump up your income. You could try:
- Babysitting or dog walking
- Washing cars or ironing clothes
- Selling items you don’t need online
- Doing odd jobs for neighbours
Think about your skills and what services you can offer. Use social media or local flyers to advertise your services. You might find steady gigs that fit around your main job.
Start small and build up over time. Even a few hours a week can add up. Keep track of your extra earnings for tax time.
Accessing Government Allowances
The Australian government offers support for people on low incomes. Check if you’re eligible for:
- Rent assistance
- Energy rebates
- Transport concessions
- Healthcare cards
Visit the Services Australia website to see what you might qualify for. Don’t miss out on help you’re entitled to.
Some payments are one-off, while others are ongoing. Make sure you understand the rules for each allowance. Report any changes in your situation promptly to avoid issues.
If you are under financial stress or have concerns about your current financial situation, please visit MoneySmart.gov.au for further guidance.
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Get in touch by emailing pitch@moneychoices.com.au.
