Learning how to save money on a single income is important. It is no secret that your financial goals require capital to come true, and the surest way to have this capital is by saving.
When you learn how to save money on one income, you are not only putting aside a sum of money from your income, you are developing a long-term financial mindset that will allow you to lead an enviable lifestyle.
In order not to extend this introduction too long, in this article we are going to explain ten steps so that you can start saving money quickly, stop spending uselessly, learn how to manage your money and consequently improve your personal finances.
How do people survive on small income?
Before we explain the steps that will help you save money, let’s start by looking at what those behaviors are that prevent us from saving in the first place.
Why haven’t you started saving money?
So if you don’t have money to save, you are doing something wrong with your personal finances that is preventing you from doing so. Below we will list the five mistakes that prevent you from learning how to save money on a single income.
• Confusing your savings with an emergency fund.
There are three totally different concepts: a savings to invest, an emergency fund and a fund to spend. Most people think that these three funds serve the same purpose. Something totally wrong.
The money you save should be invested, not used in unnecessary expenses at the end of the year or to cover family emergencies. For these expenses you must have other funds.
• Give you the opportunity to spend your money before saving it.
If you have money available in your account, you may find ways to spend it. To avoid this you can automate your savings or have a separate bank account that you do not have available on weekends.
In this way, if you automate savings, the money you have in your account will be available for your expenses and lifestyle.
However, what is the reality? The mistake is that you spend first and then save, when the process should be the opposite.
• Not taking advantage of technology to control your expenses.
Just as there are applications to earn money , there are also some apps that allow you to keep track of your finances, they tell you in which category you spend your money, among other valuable information.
Even some, like Mint, Money Control and Pocket Money, allow you to link your credit card, in this way the reports are created automatically.
• Having no goals to save money.
If you don’t have a financial goal, there is no point in wanting to learn how to save money on a single. To fix this, set a deadline and an amount you want to reach for that day. This will motivate you to achieve it.
• Save without paying your debts.
Saving with debt does not make sense. It is preferable that you first learn how to get out of debt , avoiding paying high interest and long installments over time.
When you save without paying debts, you have to take the interest that your savings generate to pay the interest on your loans. Something that doesn’t make sense.
How to budget and save money on one income – tips and tricks to achieve it easily.
Once we make clear those mistakes that are made and that prevent us from saving money, now let’s review the keys that will facilitate the process, which will allow you to save a high percentage of your income, which will translate into better personal finances.
(1. Buy in bulk what you use frequently.
Take into account how long the products you consume the most last and buy in bulk, it is quite likely that you can get a cheaper price.
If you think that 12 units or more is too much for you, you can agree with family and friends to buy these items, so that everyone can cover the need to have them by paying much less, since the payment will be made by everyone in equal parts.
In the case of fruits and vegetables, be sure to buy what you need. Not only will they be fresher, but you’ll save money by not throwing away every time they go bad in the fridge.
Saving money is about being willing to put off an unnecessary expense that does not add up to your life, to invest it in your future.
(2. Cut down on restaurant meals.
This implies that you learn to plan and cook your own food at home. To start, you can check what you have in your fridge, what is good, what you can use and which products have expired.
When buying food in supermarkets, consider the following tips:
• Buy the brand from the supermarket , if you like the taste of the brand and find it quality, you can save money.
• Opt for non-canned foods, fresh and grain products are usually cheaper and healthier than canned ones.
• Use coupons, these have discounts depending on the day of purchase and the type of product. There you can save some money.
• Although it sounds curious, do not go to the supermarket when you are hungry or have not eaten, since anxiety could lead you to make unnecessary purchases.
Additionally, if you really want to learn how to budget and save money on a single and lead a minimalist lifestyle, start by stopping buying expensive coffee on the street and buying bottled water.
Buy a thermos and fill the tap water, additionally buy a good quality coffee and prepare it at home.
(3. Check your household utility bills
The problem is not the amount you pay for utility bills, but that you don’t actually use these services. For example, if you rarely watch TV, cancel this service and just pay for Netflix.
Another thing you could do is ask your Internet, telephone and cell phone providers if they have better offers or discounts, most likely you will get a discount.
Finally, check what subscriptions you have (magazines, newspapers, monthly plans) and ask yourself if you are really consuming this content. If not, cancel these plans and use this resource for other things.
(4. Consciously use appliances in your home
Learning how to save money on a single income in this category is relatively simple, and more when you develop good habits that facilitate the process. For example, you can start by turning off the air conditioning in your house, so you will pay such expensive energy bills.
It’s all about habits and routines that make it easy for you to save money. Another change you can make is to stop washing clothes several times a week and start accumulating batches of clothes. In this way you will save water, soap, energy and even time.
On the other hand, as far as possible, do not use the dryer, which tends to damage clothes and is the enemy of your pocket with those gas and electricity bills.
(5. Think of your money in terms of time
Surely this way it will be much easier for you to save money; For example, if you earn $ 10 an hour, every time you buy a $ 5 coffee, this equates to 30 minutes of your life’s work.
This applies to any type of financial decision you make, every time you go to spend money think about the time it took you to get it. Surely you will be much more aware when making a purchase.
(6. Make smart purchases
Learning how to save money and live on one income doesn’t mean you stop buying things you need, or really enjoy. Rather, it is about every penny of money you spend being well invested or used. Here are some tips for making smart purchases:
• Quality purchases:
To make smart purchases, the first thing you should do is buy quality products. Many people think they are “saving money” by buying cheap things, when in the long run, they end up spending more than double replacing what quickly went bad.
Spending $ 30 every three months on a pair of shoes could be replaced for about $ 60 once a year.
• Compare prices:
The second thing is to make sure that you are making a good purchase, this means that before buying something you compare the prices that you are obtaining with other sources.
You can earn money online, or save it, if you find the same product, or a good quality used one on the web.
• Impact of your purchase:
Before buying something ask yourself what impact that product or service will have on your life. You will surely control and terminate your momentum.
Another way to control yourself, is when you go to make a purchase that has a discount, is to ask yourself if you would buy it if it does not have a discount. If the answer is no, you probably don’t need it.
Finally, you will be able to establish rules so that learning how to save money becomes automatic; You can decide that to spend $ 50 you will have to wait at least two days, or change the frequency of certain expenses, such as the coffee you buy every morning, make it a weekly habit.
• Invest your money, where you invest your time:
This is a very good way to make smart purchases, because you will be investing your money in products, services and experiences that you know you will use.
For example, if you have healthy habits like running, you can invest in some good running shoes; If you really enjoy your time at the gym, buy a good outfit to go there.
This kind of thinking pushes away superficial things that don’t add value to your life.
(7. Learn to use your credit cards
Credit cards can be a very powerful and useful tool if you know how to manage them well. However, when we use them indiscriminately and without good planning and knowledge, they impede your search for how to save money.
To begin with, if you have several credit cards you will be incurring greater financial expenses, as well as your debt capacity, something negative if later you are thinking of saving to buy your first home , or any other important investment.
So, to put them to good use, here are a series of recommendations:
• Know the financial cost:
Using credit and debit cards have a cost. These range from withdrawing money at an ATM, to the interest rates they charge you for the use of a credit card.
So every time you decide to pay for a 36-month purchase with your credit card, you will be paying almost double for the same product, depending on the rates in your country.
• Identify the important dates:
Credit cards have two important dates: the cut-off date and the payment deadline.
The first date consists of the day of the month where expenses are cut; For example, if your date is 15, all purchases you make until that day will arrive in your next statement. Those purchases that you make from the 16th onwards, will not arrive in the extract of the following, but the one that follows later.
The second date is the maximum day of the month you have to pay. If you leave the payment of your card until the last day, you may let it pay and end up paying interest in arrears, which is usually the highest in the market.
• Responsible use of these plastics:
Putting your credit cards to good use implies that you activate alerts for your purchases with these plastics. In this way you will be more secure and avoid fraud, as well as you will have greater control over your expenses.
Finally, avoid paying small sums of money with your credit card. It happens that you usually lose track of money and it seems to you that each purchase is insignificant, the problem is that there are hundreds of them.
(8. An intelligent management of your transport costs.
Knowing how to budget and save money on one income is a matter of using your resources properly, as well as taking care of those assets you have.
One of the most profitable businesses you can do in your life is to use the bicycle to go to work. Not only will you save money by avoiding the car or public transport, but your physical health will thank you.
Now, if you frequently use a car or motorcycle, here are some practical tips that will save you money in the long run:
• It is proven that putting gas in your car at night, and not in the morning, makes it perform better. When you tank during the day, gasoline tends to evaporate in the heat.
• When you don’t pay attention to the witnesses in your car; such as tires without enough air, engine or filter failures, this causes gasoline consumption to increase.
• If you have a new car, it’s okay to take your car to the dealer so you don’t lose the warranty. However, ask yourself if that oil change, or minor changes, require taking your car to these places where everything is more expensive.
(9. Create a personal budget
If you really want to learn how to save money on a one income family, you must have control and knowledge of your expenses, and for this, there is no better tool than having a personal budget .
Within this you can have the percentage of your income that you are going to save, you can monitor monthly expenses, categories and even use applications that facilitate the process.
Remember that what is not measured does not improve. So to start saving money, you must first know what you are spending your money on each month.
Within a budget you must also include income, so that you know how much you earn each month depending on your sources of income, and if necessary, identify the need to increase your income .
(10. Practical tricks to save money with ease
To finish this guide to learning how to save money on income, we will share with you a series of tricks, or simple practices, that will help you in your quest to improve your personal finances.
• Trick of rounding money to zero:
This trick consists of rounding towards zero the money that you do not spend, that you have in your pocket and on your cards.
For example, imagine you have $ 1,532 in your bank account and $ 235 in cash (see image). The trick is to round both figures down to the nearest zero and save this difference.
The more figures you are willing to round, the more money you will save. You can start with a single figure and save $ 5 and work your way up to two and three figures.
The good thing about this nifty trick is that it will let you know how much money you have in your accounts since they are round numbers.
Another use that you can give to this trick is that every 15 days, or every month, depending on the way you perceive your income or salary, you save the rest you have in your bank account and cash.
For example, if with one day to get paid, you have $ 75 in your accounts, deposit the remainder in your savings account. In this way you will be more applied with the way you spend, since you will not have that extra mattress the following month.
• Create an exclusive savings account:
When you mix the money you are saving with the money you use in your day to day life, it is very easy for you to end up spending it. So that this does not happen, create an exclusive savings account, you can even create an investment account, so that these savings earn interest.
Every time you deposit money in this account, even if it is minimal, you will be investing in your future, so do not wait to invest your money, but invest and then wait.
• Start saving money today:
If you are really interested in achieving your financial independence , you must be very clear that learning how to budget and save money on one income is the first step, and one of the most important.
We hope that with these steps and tricks you will not only start saving, but also change your mindset regarding your personal finances. Saving depends on your habits, so check how you live your days and avoid those situations or moments when you know that you will spend unnecessary money.
Remember that it is not about stopping living, but about being clear about your priorities and acting based on them.