How to Save Money Fast on a Low Income: 9 Simple Strategies

Discover 9 expert-backed strategies to save money fast on a low income. Master budgeting, track expenses, diversify income, and apply tips from financial gurus for smarter savings.

Last updated: 14 Mar 2025

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It can seem impossible to save a significant amount of money if you live paycheck to paycheck.

But it's not. With a little bit of strategic planning and commitment, you can achieve financial stability even on a low income.

In this guide, we'll teach you:

How to save money fast on a low income.
How to set a realistic budget.
How to analyze and cut unnecessary expenses.
Other money-saving tips.

All of the tips on the list are provided by financial experts in their books, namely 'The Total Money Makeover' by Dave Ramsey, 'You Need a Budget' by Jesse Mecham, and 'Know Yourself, Know Your Money' by Rachel Cruze.

Let's begin!

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Who are these strategies useful for?

If you already have a house of your own, a decent car, can sustain your family with confidence, and have a solid emergency fund, there may still be a few tips to help you squeeze more out of your paycheck here.

But these strategies are mainly for young adults working an entry-level job, students, and low-income citizens. Financial literacy is an important skill, and the sooner you get better at it, the further you'll get in life.

Strategy 1. Put yourself into a thrifty mindset

It's not a secret that to save money, you must say "no" to some comforts — especially if you love grabbing takeout on your way from work instead of cooking or hitting the mall for fun.

Everyone loves that quick dopamine hit of "treating yourself" after a hard day, and giving it up is arguably the hardest part of saving money.

You WILL be compelled to spend on things you want rather than need - that's a fact.

In his book 'The Total Money Makeover,' Dave Ramsey mentions that

"Winning at money is 80 percent behavior and 20 percent head knowledge. What to do isn't the problem; doing it is."

It takes commitment to save money and the right attitude to do it consistently.

So, be ready.

A great strategy for making budgeting more "fun" is to try a saving challenge, such as the 52-week challenge.

In it, you'll be saving $1 more every single week.

So you start with the super easy goal of saving $1 in the first week and slowly work your way up to $52 in the last, totaling $1378 in a year.

Strategy 2. Outline a realistic budget

To start saving money, you'll need a realistic budget.

Heavy emphasis on "realistic" — everyone's situation is unique, and what works for one person might not work for you.

Start by listing all of your income sources.

Meaning, not just your monthly paycheck but also:

Government assistance
Side hustles/gig work
Community resources
Non-profit assistance
Child support
Disability and/or other benefits

Start with the four Walls

Next — and you probably guessed this already — you'll need to list all of your expenses.

Start with the essentials — food, shelter, transportation, and utility bills.

As Dave Ramsey says in his 'Complete Guide to Money',

"No matter how blessed or distressed you are financially, your first priority every month is to cover what I call the Four Walls. Think of it as the four walls that hold your house together. They are food, shelter, clothing, and transportation. If you have food in your belly, a roof over your head, clothes on your back, and a way to get to work tomorrow, you'll live to fight another day."

Pull up your bank account and check exactly how much you're spending on groceries, gas, rent, and other bills. Figure the average for each; no need to break it down to every single penny.

Next, add other expenses and subtract from your income

Once you have an idea of how much your necessities are costing you, you can move on to non-essentials.

These are your Friday nights out (the hardest to let go of!), hobbies, takeout orders, smoking, unnecessary subscriptions, and other impulsive purchases.

Finally, subtract your expenses from your income.

Don't freak out if you're spending more than earning — that's what budgeting is for, after all!

"When we know what we want our money to do for us, the options become a lot less daunting, and confidence quickly replaces the stress,"

says Jesse Mecham in his book 'You Need a Budget.'

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Common budgeting strategies

common_budgeting_strategies_for_saving_on_a_tight_budget

There is no single "best" way to save money fast on a tight budget, but there are two strategies you might want to try.

The first is the 50/30/20 rule.

You spend 50% of your income on needs and 30% on wants; the remaining 20% goes to savings or reducing credit card debt.

The second strategy is called zero-based budgeting.

Instead of dividing your income by percentages, this one focuses on giving every dollar a purpose.

For example, if you have some extra money left over after taking care of your needs (and you still have some dedicated money for your wants), you don't treat it as extra cash for going out.

You give it a purpose — which is to go to your savings.

You'll find it much easier to be thrifty once you stop treating it as just "money for whatever" and start putting extra away.

So, you've outlined your income and spending, and your numbers don't quite fit in your budget.

What now?

You're going to have to start cutting expenses.

Strategy 3. Track and analyze expenses

You'll first need to identify any unnecessary expenses.

Of course, your bank account is the primary source for tracking spending.

You can take the old-school approach, grab a pen and paper, sit down, and look at your account statement.

Then, write down what you overspent on and try to avoid overspending on it again.

But it's not necessarily the best way to go about personal finance.

First of all, it's boring and takes a ton of time.

Second, you have to do it every month . . . consistently.

Third, your online banking app presents information in a very "dry" way.

It doesn't break it down into essentials and "extras." And it certainly doesn't do a very good job of encouraging you to save money.

Try a budgeting app

So, you might want to try a budgeting app.

There are tons of these available. Some of the most popular include Mint, YNAB, and Personal Capital.

The exact functionality varies from tool to tool, but besides syncing up with your bank to track expenses, they can:

Sort transactions into categories for easier tracking.
Set limits.
Set and track savings goals.
Analyze your habits and provide suggestions.
Gamify saving.

Our favorite feature of budgeting apps is the option to set reminders.

So for example, if you're close to reaching your monthly payments limit on, say, entertainment, it lets you know.

And if you still want to push through, you have to make a conscious effort to ignore it.

This simple mind trick helps a ton with avoiding impulsive purchases.

And the best thing?

Most budgeting apps are either completely free or have a free version.

Strategy 4. Adapt a cost-effective lifestyle

Small daily habits can stack up the bills.

"Money is just a magnifying glass: It makes you more of whoever you are. If you're kind and generous, you'll be even more kind and generous with money. If you're rude and self-centered, you'll be even more rude and self-centered with money," says Rachel Cruze in her book 'Know Yourself, Know Your Money.'

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Let's take a look at some examples of seemingly insignificant habits that could be making a big dent in your budget.

Food

Cooking at home and pack your lunch to work/school
Meal planning (and never grocery shopping hungry)
Opting for generic products instead of brand names
Shopping at a cheaper grocery store
Writing & sticking to your shopping list

Bills

Unplugging unused electronics and turning off the lights
Taking shorter showers
Switching to newer, more energy-efficient appliances
Exploring different insurance and service providers for the best offer
Lowering the thermostat and sealing air drafts around windows and doors

Transport

Walking or riding a bike
Using public transport
If you need to drive, combining activities into one trip
Sharing your car with friends or family members
Exploring cheaper car insurance options
Registering for a gas rewards program
Avoiding driving in rush hour
Trading in your gas-guzzling vehicle for a more fuel-efficient one

Entertainment

Inviting friends to your place instead of going out
Switching to a cheaper cell phone plan
Canceling unnecessary subscriptions (looking at you, Amazon Prime, Netflix along with half a dozen other streaming services)
Checking out free local events
Avoiding clubbing and excessive drinking
Finding a low-cost hobby, like reading or gaming

list_of_small_habits_to_boost_savings

Strategy 5. Diversify your income

Saving money is great.

What's even greater is making more money.

"By diversifying your income streams, consistently looking for new ways to make more money, and investing as much money as possible, you are giving yourself more control over your financial destiny and protecting yourself in the event something disrupts one of your income streams." – says Grant Sabatier, the author of 'Financial Freedom.'

We won't tell you to "just work more overtime" — that's the quickest way to burn out, even if it's the most straightforward and consistent way to grow your budget.

It may also be worth asking your boss for a raise or switching jobs if you feel you're underpaid.

Sell junk for a side hustle

Now, let's move on to some additional income streams.

Most likely, you have some old junk lying around the house.

You know the stuff — your old TV or a bike you've long since outgrown.

We recommend starting there for a quick buck.

You could even offer to help someone clear out their junk or storage buildings. Offer to haul it away in exchange for labor and sell it for some extra cash (as long as it's nothing personal of theirs)

Monetize your hobbies

Consider monetizing your hobbies for a more consistent side income, particularly if you have marketable skills like painting, music, or photography.

There are loads of freelancing websites where you can find part-time work opportunities, like Fiverr, Freelancer.com, and Upwork.

You could sign up as a taxi or delivery driver if you own a car. Or, you could run errands for an elderly neighbor.

Even if you don't have any special skills, don't worry!

You can always find side gigs as a pet sitter or help tutor kids in the neighborhood.

Last but not least, there are many entry-level jobs online, like virtual assistant or freelance writer, that you can do from the comfort of your home.

All you need is a laptop and an internet connection.

Strategy 6. Open a savings account & automate transfers

This one may seem self-explanatory, but many people, especially young adults, ignore this step.

A savings account is a special bank account that earns you interest on the money you deposit and retain there.

Separating your funds into a daily-use account and a savings one is a smart idea.

Set up automatic transfers

One of the most common ways to use a savings account is by setting up automatic transfers from your checking account at the end of the month.

Some employers even allow you to split your paycheck so that a portion of it goes directly into your savings.

Not only is this method more convenient than doing it manually, but it's also a clever mind trick.

If the money is deposited automatically, without your involvement, it's almost as if you've never had it.

So it won't be as hard for you to put it away instead of spending it.

Open a high-yield savings account

There are different types of savings accounts — basic and high-interest. Basic accounts typically have a lower interest rate and no withdrawal restrictions.

two_phones_with_the_golden_bars_on_the_screen

High-yield ones, as the name suggests, offer significantly higher interest rates.

What's the catch?

Simple — they often incur additional service fees or require a higher minimum balance.

For example, an Openbank savings account offers an APY (annual percentage yield) of 4.75% and requires $500 to open.

On the other hand, a basic Chase Bank savings account offers only 0.01% APY but has no minimum initial deposit.

If you put away $50,000 into the Openbank high-yield account, at the end of the year, you will have earned $2,375 simply for your money existing in the account.

As opposed to a measly $5 in a basic Chase account, it's a no-brainer.

The obvious drawback is that you must deposit more money and leave it in the account to earn a higher return later.

Strategy 7. Seek professional help!

Now, regardless of what you're currently doing, going at it all alone is difficult.

And financial planning is no exception.

You might find squeezing your essentials and entertainment costs into your budget with no outside help challenging.

Fret not!

Join a community-based financial organization

Chances are, there's a local group in your area that helps people just like you save some money on the side.

Take, for example, the Washington Financial Beginnings community.

It helps low-income citizens get better at managing their budgets entirely for free.

In addition to educational resources, most local communities have food banks that provide free meals to those who need them.

Taking advantage of those is nothing to be embarrassed about, especially if you have multiple family members under your care!

You may be surprised by just how many government programs for which you might be eligible, like the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF). These are examples for our American readers, but most areas have some sort of government assistance program, even in third-world countries.

Take advantage of free healthcare

Another area that can be a huge financial drain is healthcare.

While private clinics indeed have a much better public perception, community health centers don't always have to be associated with low-quality care — especially if there's free healthcare in your country.

Yes, you may have to wait in line for a little longer, but it doesn't always mean the quality of service is lower.

Strategy 8. Play the long game

Saving money (especially on a low income) is not a one-and-done deal.

There's no silver bullet for turning a low income into a lavish salary out of the blue.

It's a long-term commitment, and it requires appropriate goal-setting.

You won't get rich by saving on take-outs, but there are a few areas where budgeting and saving can help.

Put away an emergency fund

One of these is your emergency fund, which limited income citizens neglect all too much.

It doesn't have to be a lot of money, just the bare minimum, to deal with an emergency like a flat tire or a sudden trip to the emergency room.

It's not just about the check; it's also the feeling of security.

Once you have at least $1,000 tucked away to deal with these unexpected expenses, you will be more equipped to deal with life's struggles and finally gain peace of mind.

Think of your retirement plan

Of course, besides your monthly expenses, there is another elephant in the room — your retirement.

As a young person, it can be easy to disregard your future as "Oh, I'll just worry about that later," but once that "later" comes, you'll be sorry for not dealing with it sooner.

So, the earlier you start thinking about your retirement fund, the better.

For our American readers, we're talking, of course, about your 401(k).

Similar pension plans are available in other countries, such as National Insurance in the United Kingdom or the German Rentenversicherung.

The downside to government-run pension plans is that they only cover your basics, and the sum can vary significantly from country to country.

Also, some jobs (like self-employment) may not be eligible for a pension fund, so opening a pension bank account might be a decent alternative.

Regardless of the exact pension strategy of your choice, you might want to look into it sooner rather than later.

Strategy 9. Use tools and resources

Now, let's take a quick look at some tools and resources that will help you achieve financial stability at long last.

YNAB

We've already mentioned YNAB earlier, but let's explore it a bit deeper.

YNAB stands for You Need A Budget. It's a tool that syncs up with your bank account and helps you track and eliminate unnecessary expenses in a user-friendly interface.

YNAB follows the zero-based budgeting rule and helps give every single one of your dollars a purpose.

Besides tracking and eliminating unnecessary expenses, YNAB helps set and track your financial goals more easily.

NerdWallet's Savings Calculator

The NerdWallet savings calculator is a free tool that helps you understand how much money you can expect to earn with any given savings account.

Instead of using the good old pen and paper, just put in your starting balance, time to grow, annual interest rate, compound and contribution frequencies, and your contribution amount to instantly see how much you can expect to earn from your savings account.

Regardless of the exact bank you opt for.