Managing money on a low income
Increasing living expenses and commitments can make it challenging to manage and save money, especially for low income earners. Here are some tips that may help you reduce financial pressures on a low income…
Prioritise high-interest debts:
If you have a lot of different debts to pay off, prioritise them by their interest rates. Paying off high-interest debts first can prevent you from unnecessarily losing money from interest fees.
Track your income:
Keeping track of all your income, whether it’s wages, government support or investments, can help you get a good sense of how much you’re able to spend and at what time. This can prevent you from spending too much too soon before your next income payment, and plan out the best time to pay major expenses without running out of money.
Budget:
Creating a spreadsheet with your expenses and income can help you maintain an appropriate amount of spending and tell you if you’re overspending. It may take a few tries to develop a budget that suits your lifestyle, but trial and error will provide you with an accurate estimate of how much you need to set aside for different expenses. Sticking to your budget will help you grow your savings every week.
Automate savings:
Setting up automatic transfers into your savings accounts can put you into the habit of spending less. This can be especially useful if you struggle with budgeting and want to grow your savings.
Cut back on expenses:
Unnecessary spending, such as entertainment and eating out expenses can be cut down to maximise your savings. Simple things such as packing a home-made lunch and opting for a home movie night instead of the cinema can make a huge difference if you keep it up.
Smooth your bills:
If you struggle to pay large bills all at once, contact your utility providers and ask them if they will let you smooth your bills. This means that you can make small payments more frequently instead of paying one big bill once a year. This may make it easier to budget your expenses and maintain a steady income/expenditure balance.
Increase your income:
You can increase your income by starting a side hustle or making an effort to generate more money by simple tasks such as blogging, pet sitting and selling possessions you don’t need. This can reduce the amount of financial strain you may be under.
