Having more money does not necesarily mean that somebody is going to be a saver. There are a lot of people who earn very good salaries but have nothing in savings because they spend everything. However people who earn a higher salary are in a position where it is easier for them to save money if they choose to do so. It is easier for them to build an emergency fund and also pay off debt. But just because you are not there yet does not mean you can not get there. It doesn’t mean that saving money is completely off the table. Maybe it will be a little harder to save but with a few adjustments, you can free up money that can help you build an emergency fund or have more disposable cash. Here are the tips to help you save money on a low income in Kenya.
Budgeting is so crucial to help you have money at the end of the month. Everyone needs a budget. It doesn’t matter if you make a million a month or a few thousands. Budgeting is especially easy if you earn less income because there is less proof of error. It is somewhat easy for a person who earns a lot of income to dig themselves out of a financial mistake. But if you are cash strapped and do not have a lot of money to go around, you have to be careful about how you manage your money. I really like the 50-30-20 budget rule because if ou commit to spending 50% of our after tax income on your needs, 30% on your wants you will most likely have money left over for savings and debt repayment.
If you calculate your income and expenses and find that your expenses are actually higher than your income, saving money will be a little hard but it is still possible. The key is to cut back some of your expenses, both variable and fixed expenses.
2. Cash Envelope Method
One way to trim your variable expenses is to use the cash envelope system. This budgeting approach is by no means new and has been used for decades. I have different envelopes for different categories and at the beginning of the month I decide a reasonable amount of money to spend in each category. The reason why I love this approach especially if you are in the lower income, if forces you to be disciplined. The whole idea is that, you only spend the cash that is in the envelopes and don’t spend anything more. Once the cash is gone in a category, you can not spend more in the category until you refill it. If you stick to this system it is very hard to overspend. When you curb overspending, you will have more disposable cash that will allow you to save.
3. Cut Biggest Expenses
For a lot of people, the biggest expense will be housing. If you are not earning a lot of money, chances are you are not spending a lot of money on housing. Even so, there moght be room to cut back. The reason why you would want to tackle your biggest expense is because a lot of people live above their means. When you spent a lot of money on housing, it will take out a lot of your cash, making it difficult to save money. There are different ways to a pproach this. If you are currently paying rent, you can look into finding a cheaper place to live. Keep in mind that your biggest expense might not necesarilly be in housing. It can be your car payments.
4. Watch Food Spending
Of course food is a necessity, you have to eat. However, food is also a variable expense that can get out of hand really quick if we are not careful. Food can quickly kill your budget and this can happen when you eat out or you are preparing your own food. This is because a lot of time we go to the grocery store having in mind what we want to spend but when we get to the cashier we find ourselves spending over our budget.
If you want to save money every month, you can commit to trimming you shopping bills by a thousand or more every month. By so doing, you will have extra money to put into saving. It helps to not shop when you are hungry. This is because everything looks good and you will put unnecessary stuff into your cart. It also helps to not eat out. Sometimes you might not realize how much you are spending on eating out until you go back and look at your statements. If you are always busy during the week, you can meal prep over the weekend.
5. Boost Your Skills
Some people who are low income earners are commited to getting their savings account up there. To do that, you will have to increase your income. Sometimes increasing your income will involve improving our skills which take time and money. One thing I would recommend is taking advantage of online courses some are free and inexpensive. You can learn something and take those skills to start freelancing. The reason I say you can take the skills you learn online to start side hustles, some employers may require someone with more experience. If you freelance, you build your portfolio. There might be an opportunity down the road to take that skill and transition it into a job or if your side job begins to take off, you could be your own boss.
Negotiating is a lost art but it is something that more people should definitely embrace. O f course you cant negotiate everything. Some things are none negotiable. But there are some things ou can negotiate on to help you save you a lot of money. There are things you can get for a lot less just by opening your mouth and asking for a discount.
7. Money Challenge
There are different types of money challenges. Some will be easier to accomplish if you have a little bit more money. There is the 52 weeks saving challenge and many others. You can always customize your own to fit you. A good money saving challenge turns saving money into a game. When you are having fun, it becomes so much easier to save.
These are my tips on how you can save money on a low income. If you have any tips on how you save money with a low income, leave a comment down below.