Can’t Save Money On Low Income? Try This.

Can’t Save Money On Low Income? Try This.

Saving money is a challenge for everyone, but it can seem downright impossible when living paycheck to paycheck on a low income. However, with determination, discipline, and some strategic money-saving techniques, you can find ways to set aside savings no matter how little you earn.

This article will explore the obstacles to saving when you have a low income. We’ll also dive into actionable strategies to help you start building your savings – even if you can only afford to set aside tiny amounts each month. With time and commitment, those small deposits add up.

If you feel like saving anything is impossible due to your tight budget, read on for encouragement and practical tips to save more money – starting today.

Why Saving Seems Impossible on a Low-Income

When you’re earning limited funds each month, finding any extra to stash into savings can seem downright impossible. Here are some of the critical challenges faced when trying to save money on a low income:

Expenses Eclipse Earnings

One reason saving is strict when money is tight is because your basic living expenses surpass your earnings. If almost every dollar coming in goes back out for necessities like housing, transportation, and groceries, you might be wondering: where can I trim the budget to save?

On top of that, salaries aren’t aligned with the actual cost of living these days. For example, minimum wage workers earn an average of $15,080 annually. However, the average cost of living for a single adult in the US is $28,950. See the mismatch?

Saving Small Amounts Feels Discouraging

Here’s the hard truth: when funds are minimal, you may only be able to set aside $5, $10, or $20 per month. The small size of possible savings contributions can seem discouraging. You might wonder, “What difference does this tiny amount make?”

Saving money takes patience and discipline. At first, only seeing a slowly growing balance of $100 – $200 in savings after months of effort can certainly test your motivation. But remember, even small amounts add up over time. The important thing is to start building the habit of consistently setting aside something – no matter how small.

Now, let’s find some strategic ways to find extra savings even on the tightest budget.

Track Your Spending to Spot “Leaked” Money

The first step to saving more money is to get clarity on where your current money is going. Start tracking every dollar you spend for at least a month using a notebook, spreadsheet, or budget app.

Categorize expenses and look for areas where you may lose extra money without realizing it. For example, you might spend $100 a month on convenience food and coffee shops because of insufficient meal planning. Or you may notice $50 a month leaked on unused subscription services.

With this spending insight, you can make strategic budget cuts to squeeze out savings. Any money you identify as unnecessarily leaked on wants versus actual needs is potential savings.

Create a Bare Bones Budget

Next, build a bare-bones budget, allowing only your fixed and essential variable living expenses. This means paring down costs to the minimum you require to get by.

For housing, consider getting a roommate to cut your portion of rent and utilities. For transportation, explore options like public transit and carpooling. For food, plan inexpensive but nutritious meals around basics like eggs, rice, beans, and frozen vegetables.

Having a starter budget as your baseline is critical to finding more places to trim back. And any money you free up between your baseline budget and actual earnings is savings.

Increase Your Income to Have More to Save

Bringing in more money through a side gig is another way to secure extra funds you can direct into savings. Websites like Upwork,, and Rover provide flexible ways to earn additional income. Lucrative side hustles like rideshare driving, food delivery, or tutoring leverage your existing skills and availability.

You can also generate extra earnings by:

  • Monetizing hobbies like selling handmade crafts on Etsy
  • Renting out extra space in your home via Airbnb
  • Signing up for bank account bonuses that offer cash rewards for opening a new account and receiving direct deposits.

The key is finding quick ways to consistently supplement your regular earnings so you have more money to allocate toward savings.

Small Savings Add Up Over Time

When funds are scarce, it’s easy to get discouraged by only being able to save minimal amounts like $5 or $10 at a time. But reminding yourself that small amounts add up through compound growth is critical to sticking with it.

For example, saving just $10 a week at the end of the year adds up to $520. If you invest that money and earn a 7% annual return after five years, your $520 savings would grow to around $700. After ten years, it would grow to about $1,000.

Automate Savings Transfers From Your Paycheck

One of the biggest obstacles to saving is temptation. When you see excess money in your checking account, it’s easy to rationalize spending instead of manually moving it to savings.

Automating your savings deposits removes this temptation. Set up an automatic transfer to move a portion of every paycheck into a separate savings account. Start small, like 1% to 5% of earnings. You won’t even notice this money missing from your spending account. But over time, those automated transfers turn into significant savings.

Opening a high-yield savings account at an online bank offers easy automation and higher returns on your money.

Celebrate Small Milestones to Stay Motivated

As mentioned above, when funds are tight, only being able to save small amounts can feel discouraging. That’s why it’s hugely important to celebrate even tiny milestones.

When your account balance ticks up, treat yourself to a small reward like a $1 ice cream from McDonald’s or a relaxing evening watching free videos. Gamify your progress and stay motivated.

Saving money isn’t easy, but it is possible on any income level with the right mindset and techniques. Incorporating some of the above budgeting, earning, and behavioral strategies will empower you to steadily grow your savings account balance over time – even when adding small increments.

You’ve got this! Now it’s time to pull together a budget and track your spending to reveal savings possibilities. Don’t get discouraged if the amounts are tiny at first. Channel that desires to achieve financial security and let automation keep your savings momentum going, slowly but surely.

Sarah’s Story: From $0 Savings to $5,000 in 18 Months

Sarah had been living paycheck to paycheck ever since graduating college. Making $32,000 annually as an administrative assistant, the numbers rarely worked in her favor. Sarah’s earnings were stretched thin between rent, car payments, and utility bills. Saving money seemed laughable.

That is until the day her car broke down, and cleaning out her savings would have meant cleaning out her $0 balance. Relying on credit cards and loans from family wasn’t sustainable. Sarah realized she needed to get serious about saving a nest egg for emergencies and, hopefully, someday buying her own home.

Armed with determination, Sarah implemented the following strategies that helped transform her finances over 18 months:

  • She started tracking spending using Mint and realized she was dropping $200 monthly on convenience food and coffee. Sarah began to meal-prepping leftovers for lunch and making coffee at home. This created $200 a month to direct toward savings.
  • Sarah signed up for a rideshare app and used her free time on weekends to earn an extra $100 a month, which also went straight to savings.
  • She opened a high-yield savings account at CIT Bank and set up an automatic 5% deposit from each paycheck. Even if she didn’t notice a single transaction, her savings balance ticked up by $50 a month.
  • Whenever she received a bonus at work or for completing surveys, Sarah transferred it to savings before spending any. Her tax refund that year contributed $800.
  • Sarah celebrated milestones like saving her first $1,000 with a champagne picnic in the park with friends. She shared her progress on social media, which kept her motivated.

In 18 months, Sarah had accumulated over $5,000 in savings! This gave her the confidence to start setting aside 10% for retirement finally. Sarah’s story demonstrates that saving money on a low income takes time, discipline, and creativity – but it can be done and change your financial trajectory!’


The key is to start by tracking your spending, making cuts where possible, and setting up automatic savings transfers – no matter how small. Celebrate your progress and use initial motivation to form lasting habits. You can work toward absolute financial security. Saving is challenging but very possible with the proper focus and techniques.