Learn how to save money on a low income with 5 easy tips.

5 Tips For How To Save Money On A Low Income

With all of the uncertainty that took place in 2020 with COVID-19 and job lay-offs, you may be in a position of having to ask yourself the question, ‘How do I save money on a low income?’  I’ve had time to ponder this question most of my entire working life.  If you work in the service industry or work part-time, it can be so tough to earn a decent salary.  For many years, my income tax return, literally, said $20,000 gross income. Ouch! Even though we always hear from our parents that we need to save for emergencies and for retirement, but we need that money for groceries and bills.  So, what can you do?  Here is my best advice on how to save money on a low income and plan for your financial future.


The first step to save money on a low income is to make it a priority and make it a goal.  While it may be obvious to some, goal setting will help to define your intentions, come up with a plan, and stay on track. I know that this can be extremely challenging, especially if you have debt.  I have a mountain of debt, which you can read more about here.  Most of the financial gurus say to pay off your debt before you do anything else, but I just didn’t feel comfortable with that.  Being in my 30’s with little savings, it was important to me to kickstart that plan.  It took me a bit of time to figure out how I wanted to tackle saving for my future. I defined my intentions, my why, and I made it a priority because I didn’t want to be a 70-year-old living off of a measly social security check. 

Learn how to save money by saving and spending with intention.


After you’ve prioritized your goal to save money, the next step is to plan. You know what that means, right? BUDGETING! Yay, our favorite thing in the world! Okay, probably not but this is honestly the best tool that you can have.  If you really want to learn how to save money on a low income, you have to know where your money goes.  Once you are able to visualize this using a budget, the possibilities of what you can do become much more tangible. After looking at your budget, maybe you’ll find that you can put 5% into savings or even 10%.  If it’s only $5, that’s okay too!  You work hard for every dollar that you earn so make sure that you save and spend with intention.  I put together a post here about how to start a budget, which also includes a free template if you need some ideas.


With your priorities set and your plan of action in place, you can now start saving!  The quickest way to get started is with auto-transfers.  If you have an online bank account, which I assume you do, create a savings account and set-up an auto-transfer to coincide with your paycheck deposits.  I am paid twice a month on the 7th and the 22nd of each month so my auto-transfers are on the same dates.  And, as a side note, check out what type of savings accounts are offered by your banking institution depending on your particular goals.  I have savings accounts for my emergency fund, retirement fund, and investment fund. Remember, saving can be that simple!  It takes little to no time and you’ll be able to see your money slowly increase each month.  Who doesn’t love a good auto-pilot! 


If you thought you needed some large sum of money to start dabbling in investments as a way to save and build wealth, I am happy to say that you’re wrong.  Micro-investing has become quite popular in recent years as younger generations are seeking out more unconventional ways to diversify assets. Micro-investing uses small and irregular contributions to purchase and invest in partial shares of exchange-traded funds (ETFs).  It’s an easy way to get to know the financial market without needing a lot of knowledge about investing and, most importantly, without needing a lot of cash.  

I use WealthSimple, which is available in Canada, the US, and the UK. It offers a variety of accounts to choose from and you can customize your investment portfolio depending on your risk tolerance.  It also has no additional fees other than the usual low management fee.  I opened up my account with just $5 and opted-in for their RoundUp program to invest my spare change. With this feature, WealthSimple tracks my regular purchases and rounds up each amount to the next dollar and automatically invests the difference.  Based on my activity, I invest about $6 of spare change each month.  It’s been a great introduction to passive investing and saving.  


Okay, so what actually to cut back spending on is a whole nother beast. But, I wanted to leave you with one last tidbit.  Coupons and cashback programs will always be in style.  This is not your grandma clipping coupons from the magazine, well it could be, and that’s awesome. I’m referring to those apps and web browser extensions that make it easier to know when and where you can save money.  My absolutely favorite is Rakuten, formerly known as Ebates.  There are upwards of 700 of the most popular online stores offering up to 30% cashback.  If you earn at least $5 cashback from purchases, you’ll get a cute little check four times a year.  I, typically, use Rakuten for Sephora, Well.ca, and iHerb.  These sites offer lower cashback percentages and but it’s comforting to know that I’ve saved some money.   If you can save more coin with your purchases and it’s a free service, why not!  Here are a few others that are worth mentioning as well.  It’s always a good idea to use a few in combination depending on what you’re planning to purchase. 

How to save money with the $100 money saving challenge.

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