Saving Money with low income in 2023
We have seen around us that financial difficulties are a common occurrence in life and sometimes it becomes challenging to navigate through them. And to fight them it’s important to adopt measures to SAVE funds each month. Many of us don’t know how to start saving money or how to plan to save money? We have heard about pay yourself first or setting savings goals, or many rules to save.
Most of us are dependent on our salary as a main source of income and we plan our world based on just one source of income and trying to build your savings each month at times can be challenging, but believe me it’s not impossible. By working towards finding ways to reduce our monthly bills, carefully managing our spending, we can take control of our finances and CAN gain Financial Freedom by Savings alone.
Fortunately, there are practical ways to manage monthly expenses to significantly enhance our budget.
To achieve our financial goals, it’s essential to record our expenses and determine how much we spend every month. If we include saving in your budget and find ways to cut our spending we can save more money.
Next, we should determine our financial priorities. It is crucial to ensure that we consistently save. We should try to make saving automaticand and then we can can watch your savings grow over time.
Let me share some of the essentials tips with you, I have used most of them and am still using them, as they will become part of your routine.
Systematic Savings
Consistency plays a vital role when it comes to saving. In our busy life we sometimes start saving and put aside some money say one month but we may completely forget about it the next month and then suddenly we remember again to save, or sometimes we save whatever is left after all our expenses from our salary. Remember pay yourself first, i.e. even before you start spending that pay check remember to pay your future self by putting aside a fixed sum of money every month or every week or whatever you feel comfortable with.
The best way to save is to set aside a specific amount every month or every week before you start spending it. Make it a habit to save a % of your salary the day you get it. Keep it in your savings A/c or you can put it in a TFSA.
Often if you ask your bank they can give you special rate of interest if you invest in a TFSA of 1 year or more.
Regular and systematic saving can help you achieve a part of your financial goal very quickly.
Simple Budget
In a simple budget you only have to keep a track of your expenses. We all know that it’s helpful; many of us studied about budgeting in our college or many times we observe it in our offices. We know the benefits of budgeting still we keep delaying it. It is often considered to be a tedious task to create a budget.
When the month end is approaching we sometimes realize that our salary is all gone and its hard to remember where we spent all our money. Don’t you think it would be great if we can identify where each penny goes. If you can do that only then you can find ways to control your spending otherwise we will continue living on an autopilot mode.
I procrastinated budgeting for a long time, but then I decided to keep a small notebook and a pencil in my car’s dashboard and did my best to note down every time I tap my card. Honestly, I was managed to keep a track of 70% of my spending. And after a month or so I decided to take out 10 minutes from my office time and started preparing an excel sheet, and now I am habitual of keeping a track of my money. Trust me; I am saving more and more every month just by keeping track of where I am spending.
Start using an excel sheet, google sheet, or notebook, or whatever, but force yourself to keep a track of your expenses/spending.
30-Day Saving Rule
The rule is very simple and at the same time it’s extremely difficult to follow. Use this rule if you are really tight on your budget and you are trying to save every penny from everywhere you can.
Rule is : Postpone your purchase for 30 days period. Yes, it’s that simple. Whatever you want to buy if you CAN hold on for 30 days it means it is a non-essential product and you can live without it (especially when you are on a tight budget). This rule stops you from doing any kind of impulsive buying.
Ask yourself how many times you have bought that candy, or gum or an extra pair of shoes, a dress on sale, buying something in bulk, orering food online, any luxury item, etc. Most of those things will fall in the category of impulsive buying, where we buy something without giving it a thought or proper planning or research.
Analyze your fixed expenses
If you successfully start doing a simple budgeting you will notice a big part of your salary is going towards your fixed expenses, like Mortgage, car loan, car insurance, mobile and internet bills, OTT services and so on.
You will be surprised to know that there is a scope in cutting down these fixed expenses too.
Car Insurance –
You can search for a cheaper car insurance and ask for a competitive quote from your existing insurer. If you manage to save $50-$70 per month it’s a huge saving after a month. I have tried it and got a lower quote.
Mobile plan/ Home internet plans –
If you are with a service provider for over a year then there are 90-100% chances that if you will ask for a loyalty discount or a lower price for being a loyal customer, the service provider will definitely give a lower price. If you manage to get a $10 – $30 discount it will all add up to extra cash in your pocket. Try it, it worked for me.
OTT subscriptions –
Many times we subscribe to many OTT platforms. Try to analyze if you are using all of them or not, Can you cut down one or two of them?, like can you survive without any one of them? Can you find a better plan that can save you some dollars? If yes, then you can save something there too.
Electricity bills –
If you are not already aware about it, then there is a trick to reduce your electricity bills too every month and that too drastically. Most of the power companies charge us based on when we are using electricity. There are different slabs with different electricity rates based on the time-of-use.
Below is just an example:
You can find out more by simply visiting the website of your power company.
Term life insurance vs. whole life Insurance
Although it is a personal choice and a decision I want you all to take. I will write a complete article where I will compare Term insurance vs Whole life insurance. But I noticed, generally Whole Life insurance can be a little expensive than term life insurance. A term insurance is a more budget-friendly option, however; only opt of this if it works for you. Term life can easily save you 5% – 15%, talk to your insurance salesperson they can share all pros and cons based on your lifestyle and future planning.
Explore the benefits of Refinancing your Mortgage
If you explore the options to refinance your mortgage you can easily save few hundred dollars. Banks and financial institutions are very competitive. Loans/ Mortgages is very profitable for them and they don’t want to lose a chance of fetching a customer from their competitor.
I would strongly suggest going on some websites where you can compare the rates or you can avail services from a local mortgage broker to see a comparison and find out how much you could save.
Grocery Shopping
No one wants to compromise on the food they eat. However, if we only analyze what we are buying as a part of our grocery we can figure out if there is a scope of saving some money there or not.
If you are one of those who do weekly grocery shopping from a stores like Walmart or Costco, etc., then try to analyze your grocery bill and see the items that are not grocery related and you never intended buy them but ended up buying them as they were placed/ marketed nicely in the stores.
We often end up buying stuff that we think we will use and because its priced reasonable so why not let’s take it. It happens with a lot of us that we see something at a discounted price and buy it for future use but we never use them. Or we buy a lot bigger pack than what we can consume because it’s at discount.
Be mindful, if you really plan on using a bigger than usual size please buy it, if you plan on using electronic equipment in future buy it. However, only a quick glance at your previous grocery bills can reveal if you are smart shopper or not.
Always make a grocery list and try to stick to it. –
I don’t want to say much about it, as I know we are all guilty of not sticking to our list from time to time. We all know how we go out of our budget when we don’t stick to our list. So, just one line – Make a list and stick to it PERIOD.
Try to find out if there are discounts during the weekdays.
Many stores offer discounts during weekdays, or say early hours of the day, etc. Research and see if you can make an adjustment to your grocery days and get some discount there.
Refurbished vs. New Electronics
We usually save money for some expensive electronic item, say a TV, a laptop, or a computer, etc. Mostly we like to buy a brand new device, but considering a refurbished or an open box product can literally save you 40-50% right away.
Nowadays manufacturers/sellers are very liberal and give some time to the buyers to use a product and return if they don’t like it or doesn’t fulfill their requirement. Think about the scenarios when a buyer thinks about returning a product:
- There is a defect.
- The size is appropriate.
- The color is not ok.
- It doesn’t fulfill my requirement and so on.
If there is a defect the company repairs it and sends it to the customer, however, if a product is returned with a valid reason and its in perfect condition, the Seller can chose to refurbish it and sell it at a discounted price because the box is open.
Before selling any refurbished or an open box product, companies do a thorough check to ensure that they are selling product that’s is as good as a new product. I have had very pleasant experience with buying open box items from BestBuy. Next time try to explore some refurbished or open box items with warranty by the manufacturer and compare with the new items before taking a buying decision.
Shopping from Stores vs. Online shopping
If you are not already doing it, do explore/ compare the prices of the products in store and online. Usually we can find online offers, discounted prices, coupon codes etc for the products we need. For example, I always struggle finding “Bull Dog Original Steel Blades” for my razor, and they are priced differently in Shoppers Drug Mart, Walmart and other stores but I have found that its available on Amazon at a discounted price always. But that’s just a small product, but you can explore for more expensive products too.
Buying immediately vs. waiting for sale
If you don’t want something urgently and If you can wait for a sale please do. Especially if you have an eye on an expensive product or you are looking a way to save some money.
Next time before buying something expensive wait for a second and think when do you need it, if you don’t need it immediately then wait for the prices to go down. It can be something big like a big screen TV or may be a Game CD. We all know that there are genuine sales around Thanksgiving or Black Friday or Holiday time, if you think the discounted price is worth waiting please wait that can save you up to few hundred dollars.
Downgrading is not always bad
Yep you read that right. If we observe carefully we can easily find products and services that we use frequently and by downgrading those on one level may not hurt us.
Try to do that with a mobile plan, we know there are 4 or 5 best mobile service provider. Based on our personal experiences or discussions with family and friends we can rank them these mobile service providers from 1 to 5. If you are with number 1 service provider compare a similar plan with number 2 service provider and see if you can save something there. In these competitive times all the service providers try to compete in terms of their services. Going down from #1 to #2 can save you money without compromising on the services or speed of internet etc.
Find other areas where you spend regularly and I bet you can find a many products/ services where you can save by downgrading just one level.
Compound Interest Calculator
Here is easy to use “Compound Interest Calculator” for you:
If you have reached this far, I thank you for reading. I have one more thing for you, click here to know about POWER OF Compounding. In the comment section please tell me where you from or share your experiences about savings.
Do write about what other areas you want me to explore and write about or anything you are struggling with? I will definitely research and will try to find answers for you.
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