How to save money if you’re on a low income

Saving money can often seem like a difficult task. But even if you don’t have much disposable income at the end of each month, there are still ways to cut costs and make savings.

Pay off (or organise) your debt

Having debt can feel like a real burden at times. It can end up being a big monthly expense and payments can come with hefty interest rates.

If you can, it’s a good idea to pay off any existing debt before saving, especially any with a high interest rate. While this will cost you money initially, it will then free up monthly funds in the long term – and you’ll avoid wasting money on those high interest rates. 

If you have multiple repayments going out every month and can’t afford to pay them off, you could consider consolidating your debt. Debt consolidation combines your existing debts into one bill, with one interest rate, so it’s easier to manage. 

You can do this by getting a debt consolidation loan or a balance transfer card. Balance transfer cards often come with a 0% interest rate for a set amount of time, so it’s best to repay that before it ends. Bear in mind, there could be a fee involved to transfer your balance, and the card may not necessarily have the limit you need. Plus if you repay your debt over a longer period, you may end up paying more interest in total.

Find pain-free savings 

It may seem impossible, but there are plenty of ways you can cut back on your expenses to save each month. Here are some examples of things you can limit, that won’t make your day-to-day life difficult:

• Walking and cycling – If you usually drive or pay for public transport to get about, then consider whether it would be possible to switch to walking or cycling when the journey isn’t too long. 
• SIM-only deals – Next time you’re due an upgrade, think about whether it’s necessary. Consider using your old phone for a bit longer and switching to a SIM-only deal. 
• Limiting luxuries– This includes takeaways, alcohol, clothes, etc. You don’t need to cut them out altogether, but you could consider cutting them down. For example, if you buy brand-new clothes regularly, how about buying second-hand instead? If you get a takeaway every weekend, you could alternatively try getting one every other weekend. 
• Make coffee at home – If you spend £2 every morning buying a takeaway coffee on the way to work, that adds up to £10 a week! By making it at home, that’s over £40 a month saved.
• Batch cook your meals - By planning what you’re going to eat each week, you’ll be less likely to overbuy, which saves you money and means you'll limit any food waste. 
• Upcycle and repurpose - Instead of buying everything new, why not upcycle? Or, repurpose old items? Instead of throwing away that old t-shirt, cut it up and use it as a cleaning rag. There are all sorts of cleaning hacks that use things you already have lying around the house. 

Build a budget plan that fits your income 

If you don’t already have a budget plan, then you should consider making one fast. There are lots of suggestions on how to budget best, including:

• Tracking just these three categories when budgeting
• Following these 6 simple budgeting steps
• The popular 50-30-20 financial rule

It’s important to make sure your budget fits your income. If you can’t afford something, put off buying it until another month when you can afford it. If it’s a big purchase such as a holiday, then work towards saving up for it. 

Shop around for the best deal for your utilities

You should always shop around to make sure you are getting the best deal: 

• Energy – To find a new energy supplier, try using a comparison site. Energy companies often have deals running to attract new customers, and you don’t need to be loyal to any single provider. 
• Broadband – Broadband providers also change their deals regularly to attract new customers, so find out what deals are out there. If somewhere has a better deal, consider contacting your provider to ask if they can match it - or consider switching. 
• Shopping bills – If you always buy big brands, perhaps try supermarket brands. You can save by using coupons, vouchers, and loyalty cards. Write a shopping list, that way you’re less likely to impulse buy and more likely to stick to your budget. 

Make extra money from a side hustle

If you’re on a low income, a good way to add to your savings is to earn some extra money on the side. Depending on the amount of free time you have, this could include earning cash from a hobby or making money by selling unwanted belongings. 

You can also make money just by using your internet connection! Many companies will pay you to conduct market research or complete surveys online. Another option is to look at cashback sites to earn a small return on items you’d usually buy. 

Find out other ways you can make your financial goals achievable.