When you’re already struggling to pay housing, healthcare, auto expenses, and keep food on the table, making considerable contributions to a savings account probably feels like a bit of a pipe dream. It may seem difficult to save for unexpected expenses even with a few money saving tips in hand when your current financial needs seem overwhelming.
In 2017, about 1.8 million hourly workers were earning wages at or below the federal minimum wage of $7.25—which brings in about $15,080 annually for those working a 40 hours a week. This is much lower than the average living wage in the United States, providing extra incentive for minimum wage workers to find creative ways to save money.
Ways to save money on a tight budget
While saving money can seem like an unreachable goal for minimum wage workers, even those who are struggling to make ends meet can contribute to savings and create a financial safety net. While this may seem difficult, with enough discipline and the right money saving tips, it’s possible. Here are a few ways to save money on a tight budget for minimum wage workers.
1. Begin with a budget
No list of money saving tips is complete without stressing the importance of budgeting; there’s no way to truly know where your money is going without one. Its main purpose is to help you regulate your spending and identify areas where you’re spending money you shouldn’t be. Although it may seem counter-intuitive, budgeting can give you financial freedom by helping you control your money, instead of the other way around. There are plenty of free personal finance apps to help you create a budget and manage your money, or you may want to take a look at our Ultimate Budgeting Guide to read about some effective budgeting techniques that may work for your financial situation.
2. Don’t spend in windfalls
When you get large sums of cash expectedly or unexpectedly—like a significant cash gift from a friend or relative, or when you receive a tax refund—resist the urge to go on a spending spree. Put half of the money into a savings account to have on hand when your car needs an expensive part, or for when you have to take an unexpected trip to the hospital. Put the rest towards any debt you may have. If you’re debt-free and on firm financial ground, consider investing or making an important purchase you have been putting off before splurging.
3. Keep the change
This is a slow-but-steady money saving tip. Hoarding your change religiously over the year can have a bigger impact on your savings than you think. Whenever you make purchases in cash—which is already a helpful tip to avoid over-spending — save any change you get. At the end of the day or week, put all your remaining change into a jar. You might be surprised how much you end up with when the year is over. Another way to “save your change” digitally is through Acorns, an investment app that rounds your purchases up to the nearest dollar and invests the change for you.
4. Cut down on eating out
While this may be one of the more obvious money saving tips, it’s easier said than done. It can take a lot of encouragement and discipline to meal plan and gear your grocery shopping around coupons and sales. Of course, when you are working multiple jobs and dealing with dozens of other responsibilities, as many Americans are, eating out can seem like the easy way to go. But buying groceries and prepping your meals can be a lot easier on a budget if you go about it the right way.
You also have the power to make more nutritious choices to maintain better health. Keep healthy affordable snacks in your car so you are not tempted to hit up a fast food joint during your busy day.
That’s not to say you should never treat yourself to a nice meal, a specialty coffee, or your favorite snack. For those struggling to make ends meet, those little luxuries can keep you going. Just eat most of your meals from store-bought supplies.
5. Share your housing
In many places, affordable housing is a serious problem. The U.S. Department of Housing and Urban Development defines “affordable housing” as 30 percent of the occupant’s income, but many low-income households are paying significantly more to cover their rent or mortgage. You can try to mitigate this major expense by renting out a room if you have one available, or getting together with a few friends to collectively rent a larger space. You may be able to save a substantial amount each month, a large portion of which can be saved or used to pay off debt or put into your savings. You also can consider renting your room on a temporary basis to vacationers through a travel website. If you have the extra room available, this can be one of the most effective money saving tips on this list.
6. Boost your income
One of the best ways to save money on a tight budget is to look for ways to make a little extra money. You can rid yourself of items you no longer use by having a yard sale (by yourself or with neighbors), or by taking them to a consignment store. Depending on the store, you can get cash or store credit. This is especially useful for families with young kids who are constantly growing out of old clothes that are still in good condition.
You can also look for side jobs if you aren’t working any already. You can dog sit, provide child or elderly care, help someone clean their garage, do yard work, and more. Take any and all odd jobs you can manage. If you want something more long-term, like driving for a ride-sharing service or tutoring online, make sure it offers flexibility so you can effectively plan this additional work around your full-time job and other responsibilities. Not only is this a great money saving tip, it can also help to develop useful skills that can be used down the line.
7. Take advantage of freebies and sales
There are plenty of free or cheap items and activities to be enjoyed—you just have to know where to look. Join a local community garage sale or giveaway page on Facebook and look out for people selling items for cheap, or better yet, giving them away for free. Go to the library to rent books and movies, and enjoy free events for the family. Look for places that have local discounts and go out to eat during Happy Hour or on a weeknight when restaurants are more likely to offer deals. Many non-profits offer classes, workshops, and holiday events that are more accessible to everyone, regardless of income. Don’t be afraid or too proud to attend free community meals or healthcare events. These money saving tips are a great way to help you cut costs on entertainment.
8. Be crafty with credit
Credit cards can be dangerous for those who have a spending problem, but they’re also what many people turn to when faced with a financial emergency or unexpected expense. That being said, it’s important to consider other ways to pay for large expenses before resorting to a credit card.
If you have family members who will loan you a couple hundred dollars interest-free, go that route before taking on debt. If you’re facing an expensive medical procedure, talk to your hospital about a plan to pay it off. You can also talk to an automotive center about a payment plan for vehicle work.
However, as long as you’re able to pay the credit you use, credit cards can help you find creative ways to save money through rewards. Two of the most common credit card rewards are travel points and cash-back. Whichever rewards your card offers, use it on purchases that you can pay back immediately with money in your debit account. These money saving tips can help you to start building your rewards without taking on more debt if you’re able to comfortably pay off your credit.
Use these money saving tips to help save on minimum wage
Trying to save money while working a minimum wage job and struggling to make ends meet is can be difficult. Saving, by definition, is sacrificial: You give up short-term satisfaction in exchange for long-term security. But it’s also worthwhile and still possible for low income earners. Whether you are wondering how to save up for a car with minimum wage or trying to build an emergency fund, follow these money saving tips and see what a difference it makes.
Posted in: Financial Tips