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Is it possible to save money on a low income?!?

If you are earning minimum wage (or a low income), it can be tough to keep up with everyday costs-of-living. And when you’re focused on keeping a roof over your head and food on the table, building an emergency fund gets put on the back burner. 

As of 2019, the federal minimum wage was set to $7.25/per hour, with as many as 1.8 million Americans earning the minimum, according to the U.S Bureau of Labor Statistics.

But even if you’re only able to set aside a few hundred dollars in your emergency fund, something is better than nothing.

Saving money with a low income or on minimum wage is more difficult, but it can be done.

Here’s a list of 12 ways to save money on a low income. 

1. Get a savings/investment app

Investment apps like Acorns will automatically round up your purchases (with a linked debit or credit card) to the nearest dollar, and then save and invest the difference. 

This is an excellent way to not only save, but also gain experience investing. Let’s say you spend $7.80. In this case, the apps rounds up your purchase to $8.00 and saves $0.20. 

The app also lets you set up recurring transfers on a weekly or monthly basis, as little as $5. This savings approach is so subtle that in most cases, you won’t even notice the extra money leaving your account. If you’re interested in Acorns, you’ll get $10 when you use this link to sign up. 

2. Save your change

Every little bit counts when you’re trying to save money on a low income. 

Make a point to save your leftover change after shopping. This might seem like a slow route to saving money, but each time you add change to your money jar, you’re saving and increasing the balance. The change adds up over time. 

You might be surprised by how much you have at the end of a year.

3. Create a budget

People who don’t track their spending are more likely to overspend. 

Everyone needs a budget, but it’s even more important when you’re living on minimum wage because you have less room for error. It’s easier for someone earning more to dig themselves out of a financial hole. So track how much you have coming in and going out. 

This starts with knowing exactly how much you need for living expenses such as housing, insurance, utilities, and food. Create a spending plan or budget, and stick with it. 

4. Open a high-yield savings

A regular savings account earns pennies in interest. To take your savings account to the next level, open a high-yield savings account either online or with your bank. High-yield savings accounts earn rates 20 to 25X times higher than traditional savings accounts. This allows your money to grow at a faster rate.

A high-yield savings is the perfect place to deposit windfalls or other unexpected cash, such as a tax refund, gift money, etc.

Related: What to Do With a Tax Refund in 2021

5. Get a side hustle

Let’s face it, saving money on minimum wage is hard to do. If possible, get a side hustle to increase your income. Consider signing up with a ride share company or food delivery company to make additional income. Or, look into side businesses or passive income opportunities you can do from home. 

6. Live within your means

If you don’t have extra money to spend, don’t spend it. Life is already expensive, but it becomes even more expensive when you’re trying to obtain luxuries (or anything) beyond your financial means. Stop trying to keep up and avoid lifestyle inflation.

7. Stop eating out

Even if you only eat out once a week, that’s $10 to $15 that could go into your savings account. Spending money on restaurant meals adds up quickly, and eats at the little disposable money you do have. 

Purchase groceries, instead. Not to say you can’t treat yourself—just not as often.

8. Buy food staples

When grocery shopping, spend less on processed, convenient foods, and more on items you can use for breakfast, lunch, and dinner on multiple days. Food items such as rice, dried beans, cereal, eggs, and vegetables are low-cost, go far, and usable in a variety of meals. Here’s a post on how to save money on grocery shopping every month.

9. Shop at wholesale/budget-friendly stores

Stores such as Dollar Tree, Dollar General, Family Dollar, Aldi, and Wal-Mart have discounted food and low-cost non-food items that can help you save money, too. Thrift stores are also great for buying clothes. You might even find a few name brand items—though buying name brands isn’t a necessity. 

If you can save $2.50 a week on normal expenses, that’s $10 a month to jumpstart your savings account. 

10. Get a roommate

If you’re having difficulty paying everyday living expenses, consider getting a couple of roommates. You’re able to split living expenses like rent and utilities, freeing up cash to build an emergency fund. 

11. Sell items you no longer use

Go through your closets and find items you can sell. If need be, you might sell your car for extra money. But only if you have other reliable transportation to get to work or around town. Can you bike, walk, or take public transportation? If so, you’ll avoid the cost of gas, maintenance, car insurance, and personal property taxes.

12. Use credit wisely

Using a credit card might seem like an easy solution when you’re cash strapped. But using credit is expensive, if you carry a balance from month-to-month. There’s the risk of paying way more than an item’s original price. So only use credit if you can afford to pay off the balance each month, or at least within a couple of months.

Yes, you’ll face challenges when trying to save money on a low income. But it’s certainly not impossible. If you’re willing to make some adjustments to your living arrangements and lifestyle, you’ll be able to save. It might not be a lot…but something is better than nothing.