How To Save Money Fast with a Low Income
Almost 30% of American’s have no savings for an emergency fund, a staggering number that can quickly become exposed during a financial crisis or any emergency. Those with a low income are even more susceptible to financial difficulties when tough times occur, making saving money a priority. Keep reading to learn how you can save money fast with any income.
Lower Housing Costs
For most, your housing expenses will be your largest monthly expense, amounting to almost 25% of your budget or more. This makes it a great candidate to cut down on your costs to boost your savings. Below are some options you can consider to lower your housing costs.
Refinancing can save you hundreds of dollars per month for your budget. Rates are at historically low levels, giving you the opportunity to borrow much cheaper than previous years. If your mortgage suffers from a high-interest rate, this could be the ideal time to refinance.
In addition to the savings you’ll receive from a lower mortgage payment, you’ll also see some green when tax season arrives. Mortgage interest is deductible on your taxes, which can be a considerable amount over the first five years of the loan.
There are a few things to be aware of when it comes to refinancing your mortgage, however. Because you are initiating a new mortgage, the duration of your loan will increase by either 15 or 30 years, which has the potential to tack on hundreds of thousands of mortgage interest over the life of the loan.
Rent out a portion of your home
If you have empty space in your home, consider renting it out on short term rental websites like Airbnb or VRBO. You can list individual rooms or the entire home. If your city has large events, this would be a great time to rent out a portion of your home to cash in. Rates vary depending on your home and location but it can easily generate a few hundred bucks per month.
Always check local laws and restrictions as some communities do not allow for short term rentals and many require special permits. You’ll also need to include the income you receive from your rental on your taxes, so be sure to keep some of your profits stowed away for tax season.
If you really need to save money, moving to a less expensive housing option might be your best move. You can consider downsizing homes, renting, or moving to a city with a low cost of living to keep your budget in check.
You can also consider moving in with family if you need to cut back. Many do not have this option, but it can be a great way to save money fast.
Avoid Eating Out
Cooking at home can save tremendous amounts of money. Between the cost of meals, drinks, and tipping your waiter or waitress, eating out can carve hundreds of dollars out of your monthly budget if not careful.
Cooking meals at home can cost significantly less and can also provide healthier options.
If you do plan on eating a meal out, there are a few things you can do to save money.
- Use coupons or offers
- Attend happy hour
- Split meals
- Drink water
- Choose less expensive meals
Stay Away from Bars
Alcohol is extremely expensive. Spending anywhere from $4 to $10 per drink is the quickest way to kill your budget. Add in the cost of transportation to and from the bar and the cost of one night out can become exponential.
For the cost of one night at the bars, you could craft a delicious meal with your favorite bottle of wine at home, with plenty of money leftover.
Cut Entertainment Costs to Zero
Entertainment costs like going to the movies, sporting events, or concerts should be eliminated when trying to save money. Instead, you should switch to lower-cost alert natives like watching a movie at home or going to your local park.
If you do not want to cut out these expenses altogether, there are a few things you can do to save money.
Attend Matinee Showings
If you are in the mood to see a new movie, attend the matinee showings to save money. Tickets for times before 5:00 can be much less than prime-time showings.
Get Cash-back Using Credit Cards
Some credit cards offer tremendous rewards on categories like dining and entertainment. For example, the Capital One Savor Credit Card offers 4% back on spending on these categories and you can even score additional savings on concert or sporting tickets bought through certain vendors. This can amount to a decent savings if you cannot eliminate these activities.
Boost Your Income
Sometimes you will need to make more money to save more. You might reach a certain point in which you cannot save any more money with your current income. Below are a few ideas to help increase your income.
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Consider a Part-Time Job
A part-time job is a great way to add some additional cash to your budget, enabling you to save more money. Even if it’s just a few hours per week, that might be all it takes to boost your savings.
Drive for Uber or Lyft
If you have a vehicle, you can consider driving for a ride-hailing service to make money. Some drivers have reported making more than $16 per hour after expenses, which is significantly more than the minimum wage you may find at other part-time jobs.
Driving also gives you extreme flexibility in making your own schedule. You simply need to flip a switch on your device, noting that you’re available to drive, making it perfect for those working a full-time job.
Learn a Skill
The best way to boost your income is by investing in yourself through education. By learning new skills, you can contribute more to your current workplace or consider starting a job search to be rewarded for your new skills.
Consider Starting a Business
Creating a business of your own can lead to exponential returns on your investment. From a lawn care business to becoming a blogger, there are endless options of businesses you can start that suit just about anyone.
Save Money on Utility Costs
Between water, electricity, gas, and other utilities, you can spend hundreds of dollars per month. By limiting these costs, you can save money fast.
Use Less Water
Limiting your water use is an easy way to save a few extra bucks per week. Try shaving a few minutes off of daily showers and becoming more aware of leaving the water running in the sink.
Save on Electricity
There are hundreds of ways to save money on your electric costs with some being more beneficial than others. Below is a list of options you can try to save money on your electric costs.
- Use LED lightbulbs
- Use a programmable thermostat to keep your home cooled and heated efficiently
- Lower the internal temperature of your refrigerator and freezer
- Unplug any unused electronics
- Ditch the space heaters
- Upgrade insulation and weatherstripping
Pay Bills on Time with Fee Free Options
Some utility companies will charge late fees that might seem scant at first glance. Be sure to pay your bill on or before the due date to keep these costs at bay.
Additionally, some utility companies will charge for certain payment methods like credit cards. These fees can amount to 3 or 4% of your bill, which can add unnecessary costs to your budget. Instead, opt to pay with a check or automatic withdrawal from your bank to limit fees.
Related: Save $10,000 in a Year
Save Money on Fuel and Transportation Costs
The costs of owning a vehicle can add up quickly. Fuel, insurance, and car maintenance can cost thousands per year not to mention a car payment.
For those with newer cars, consider selling your vehicle and purchasing a less expensive option to save money.
Get Multiple Insurance Quotes
The costs to insure your vehicle will likely cost you a few hundred dollars every 6 months. If your policy is about to renew, try to receive quotes from multiple insurance companies. You might be surprised how much the costs can differ for the same policy.
You can easily save on fuel costs by becoming a more efficient driver. Not leaving your vehicle idling, easing off the brakes, and accelerating slowly are all great ways to save gas while driving.
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Drive a Reliable Vehicle
Maintenance costs can become extremely costly for cars that require frequent maintenance inspections. Drive a more reliable car to cut down on these costs.
Conclusion: How to Save Money Fast
If you have a low income, you might think saving money will be a massive undertaking. However, by adjusting small habits in your daily routine, you can save money fast. By reducing your housing expenses, you can trim a significant portion of your budget, allowing you to save more.
What are your favorite ways to save money? Comment below!