How to Save Money If You Have Limited Income
Everybody wants to save money to buy a house, take a vacation or be able to retire comfortably. If you have limited income, those goals can seem out of reach. It can be hard to save money if you don’t have much coming in, but there are ways that you can trim your spending and be able to set some money aside for the future.
For most families, housing is the biggest monthly expense. If you own a house, consider refinancing your mortgage to lower your monthly payments. That will extend the term of the loan, which means it’ll take you longer to pay it off, but you could save hundreds of dollars a month that you could put toward saving for retirement or your children’s college education. If your children have moved out, consider renting out a spare room or downsizing to a smaller house or apartment.
Entertainment can be expensive. Cable often starts out at a low introductory rate that increases after a period of time. Ask yourself if you really need all of the channels you currently have, or if you even need cable at all. There are many other services that offer access to thousands of programs at a fraction of the cost.
Eating out and grabbing a cup of coffee here and there can quickly add up. Eat breakfast at home or take something with you to eat at work. Instead of going out for lunch, pack a sandwich. Cook dinner at home instead of going to a restaurant. You can still go out to eat once in a while, but limiting yourself to once or twice a week can save you a ton of money over the course of the year.
Pay Off Debt
If you have debt, come up with a plan to pay it off. Make a list of all of your credit card balances, outstanding car and student loans, and other debts, along with the interest rates. Create an ambitious but realistic plan to pay them off, starting with the one with the highest interest rate. You might be able to refinance a loan to a lower interest rate or take advantage of a credit card balance transfer offer that can significantly lower your interest rate and give you time to pay off the bill without accumulating a lot of additional costs.
Save for the Future
If your employer offers a retirement plan, you should take advantage of it, especially if the employer provides a match. That’s basically free money that the employer offers to help you plan for your future.
Saving Money Is Doable
If you have a limited income, you may feel like saving money is impossible, but it isn’t. Trimming expenses, lowering interest rates, paying off debt and taking advantage of help offered by your employer can allow you to get on firmer financial ground.