How to Budget and Save Money on a Small Income

Saving money on a low income can feel like a challenge! You have to make sacrifices to achieve your saving goals. You have to be creative by thinking outside the box.

You have to be vigilant all the time making the whole process of getting started difficult for most people who want to save on low income.

In this article, I will share with you some techniques to budget and save money on a small income. If you have a larger income, the steps I will share below may be slightly harder to follow but at least they will help you save some money where ever possible.

Let’s begin!

1. Make Savings a Priority

The first step to budgeting and saving money on a small income is making savings a top priority. Unless you have plans for your small income, it can be extremely easy to spend it all.

It may sound obvious but everyone’s money mindset (beliefs and habits) differ, so you ought to put savings at the top of your list.

The rule of thumb should be: Save first then spend later.

Also, if you want to save money, you ought to be alert – meaning you have to forego all other unnecessary things and keep as much money as you can.

2. Figure Out What You Can Save

The next step is to figure out what you can save each week/month and make it a practice. It’s not easy especially if you’re not used to the habit of saving but it’s necessary especially if you intend to spend less than you make and maintain a savings account for emergencies.

Always keep aside 20% of your income for savings every time you get paid before doing anything else. That way you will have a clear picture of how much you will have by the end of the year (future-forward thinking).

Make a list of all your monthly expenses and debts and figure out where you want to make the adjustments so that you can be in a position to cater for unexpected emergencies.

3. Make Your Savings Automatic

A great way to make savings more consistent without much effort is by automating them. Today almost all banks offer automated transfers and investments between your checking and savings accounts.

You can set when, how much and where to transfer a certain amount of money or even split your direct deposit so that a portion of every paycheque goes directly into your savings account. This will prevent the temptation to spend most of your money on things that don’t matter.

4. Increase Your Earnings

The next step is to make more money. If you think your salary is still not enough despite the need to save, then why not add another source of income?

One way to increase your income is through a side hustle like a freelance online job as an encoder, a writer, language tutor or even an artist.

It would be the best way to increase your earnings without having to take a leap from the day job.

5. Avoid Unnecessary Expenses

This is one of the most critical stages when budgeting and saving money on a small salary. You need to identify your non-essential expenses and cut them off as early as possible.

Expenses like entertainment and dining out might be nice, but if your plan is to save money, then they can’t be part of your regular life. Try making a list of all your non-essential expenses and isolate yourself from those you can live without.

6. Take Advantage of Freebies, Coupons, And Deals

This may sound a little crazy but there are some things you can definitely get for free. Look around your local area and find out what’s available for free. If you stay in an area that has a community centre or library, you usually get a free membership.

You can also keep an eye on online discounts and coupons at your favourite stores. Platforms like Rakuten, Ibotta and BeFrugal offer coupons which gives you the opportunity to buy for less and save money each week and it doesn’t take too much effort.

7. Sell Items You Don’t Use

Go through your list of non-essential expenses. Are there any items you don’t use anymore? If so then sell them and put the money towards your savings. This can give you a little extra cash and selling them can just take a few minutes.

8. Limit Your Spending

This basically requires common sense. Since you know that you operate on a small salary, you need to limit extra spending in all ways you can. For example, avoid impulse purchases or eating dinner out. Instead, channel your attention to finding events and activities in your local area that you can enjoy for free.

9. Establish a Shopping List

If you’re serious about budgeting and saving money on a small income, then one of the best things you can do is make a shopping list before ever going grocery shopping and stick to it to avoid buying things that aren’t on your shopping list. That way you won’t forget anything you planned on buying.

You should also always shop on a full stomach so that you don’t end up buying junk food.

10. Eliminate bad habits

Other than affecting your mental and physical health, bad habits also do cost a lot of money. Bad habits like drinking alcohol, smoking cigarettes, playing the lottery, making impulse purchases all have harmful effects on your financial health.

It might be a lot of fun when you do it but imagine the negative impact it can have on your health and bank account given that you earn a small income.


There are no secret formulae to budgeting and saving money on a small income that you need to learn to make an effective money management strategy. No matter how little you earn, you can always make room for some savings each month.

It will take patience, diligence and commitment to get started budgeting and saving money on a small income.

Share with us in the comments your thoughts on budgeting and saving on small income! Cheers!

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Written by Mila Joshua Yona

Pro South Sudanese Blogger, Digital Marketer & Web Designer. I help entrepreneurs scale up their businesses online. You can join my Facebook Group Here or Telegram Group Here

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