12 Best Tips to Save Money on Minimum Wage
vemuda.com - Saving money is a crucial aspect of living in this society. You need to save for rainy days, medical emergencies, retirement, I could go on and on. It may feel stressful and futile to try and save when you’re making next to nothing but don’t be dissuaded.
There are small steps you can take to build a respectable savings account. So follow along to learn more. Now, let’s get into it.
1. Tackle high-interest debts first
Before you start thinking about saving your money, you must first consider eliminating debts that will slow you down towards your goal. I’m specifically talking about high-interest loans including your credit cards or personal loans.
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If you’re thinking just how in the world am I going to start paying off so many debts and be done in time to start saving. Well, it’s easy: just start by paying off the costlier debts and work towards the smaller ones. In other words, prioritise your payments.
You’ll be amazed at how relieved you’ll be once you’ve paid off all your debts, since you won’t be worrying about both trying to save AND paying off loans.
2. Cut down your bigger expenses
Heard of the phrase ‘living below your means’Well, it’s a fantastic motto to live by. Many times, the biggest expenses are the ones we don’t even think twice about..Think of rent, for example. If you can afford to move to a cheaper place, I’d encourage you to do so.
You may even have to give up your independence for some time and move in with flat mates. Asses all your expenses and cut back in areas that you don’t really need to be spending as much on.
3. Take Advantage of Free Money
Did you know that low-income families are exempt from paying earned income tax? The IRS reports that when you have earned income tax, it’ll act as a refund to your taxes.
What does this mean? It means that you’ll have more of your salary to take home. On a good day, you can expect a couple extra thousand dollars to come your way!
A good place to start is choosing the right 401(k). And all you need to do is check and see if your employer will match your donation up to a specific proportion. If they do, reap the benefits and save up all that extra money into your retirement fund.
Now, I know you might be tempted to use that money to buy a brand-new TV or the latest iPhone… but Don’t Be Tempted! The whole point of this is to save and that’s exactly what this extra money in for.
I mean, think of the awful buyer’s remorse you’ll be suffering with once you get your new gadget all the while having an empty savings fund … yikes!
4. Start a Side Hustle
Nobody in this day and age is going to be financially free with just their 9-5 alone. (That is unless they’re like a CEO or something, but even then) You need to start a side hustle to supplement your full-time job. And the fun thing is that it can be very easy.
Let’s say you’re a fantastic cook. You can start selling your food and make some extra cash. You can take it a step further and start teaching cooking classes. The great thing with both these ideas is that they can be done from the comfort of your own home.
And just like that, you’ve got some extra cash handy. While your money from the 9-5 pays for your day-to-day expenses, use this side job money to save and even invest.
5. Start a budget
Ok, I’m going to get straight to the point with this one. Follow the 50/30/20 rule: 50% of your money should go towards your necessities (rent, groceries, etc.). 30% for your wants and 20% into your savings.
The one major tip I’ll give you is to properly identify where your 30% is going to. Don’t just mindlessly spend it away. Create a wish list and organise it from ‘what I want the most’ to ‘meh, if I don’t get it, I’ll still be ok’.
Save up towards whatever is at the top of the list and buy it. This way, you’ll cherish and value it more.
6. Avoid bank fees
Putting our money in the bank has been considered one of the best ways to cut down on impulsive spending because the money isn’t available the moment it’s needed.
Unfortunately, something we weren’t told is that banks also come with a few disadvantages. Banks typically charge a fee based on the type of transaction: the larger the amount, the more the fee.
Additionally, the needed minimum balance must be kept at all times to avoid having to pay extra fees with your hard-earned money. Candidly speaking, it does seem unfair. If you already have an account, don’t spend more than you have to.
You can also sign up for a direct deposit because it’s always free when your money is banked in automatically. Another alternative is opening multiple accounts at your bank.
7. Stay healthy
Medical insurance, or any medical fees for that matter, are EXPENSIVE. Heath really is wealth and you need to make sure you are taking care of yours all the time.
Taking care of your health ranges from modifying your diet to cutting out alcohol and smoking. Your mental and physical health is your biggest asset so take care of it to the fullest of your ability.
8. Follow the money
The dream area to live would be a place with low rental costs but high minimum wage. We’ve already talked about moving into a place with lower rent and splitting the rent amongst flatmates.
Now, you want to also make sure the new area you’re moving to has a higher minimum wage rate than your previous area. Striking the right balance is key.
Alternatively, you can get a good house with a good mortgage, you can choose to rent out the unused space, and us the money to pay for the mortgage.
9. Don’t expand your family
Let’s cut to the chase: kids are expensive. Raising a family comes with a lot of responsibility and you need to properly think about those before you start one of your own.
This not only means holding back on having children until you can financially afford them, but also taking your time in picking a partner who is financially literate and responsible.
10. Swallow your pride
We all need help; the biggest lie of this society is that of the ‘self-made’ man. I am willing to bet all my limbs that someone who labels themselves as such, has gotten a ton of help during their journey.
You deserve help as well. Obviously financial help is the main aim, but even going to your local food bank is enough. Don’t worry about looking weak because you need support. Don’t give into the myths of society and allow yourself to be helped as needed.
11. Avoid automobiles
Aside from helping the environment, you are also doing wonders for your wallet by ditching the car and opting for public transport instead. From gas money to regular maintenance, owning a car is scarily costly.
You can also kick start your health journey by getting a bike instead or walking around town if possible.
12. Get a change jar
How many times have you noticed a few extra dollars and then decided to waste it away on something useless? I know I have, and I’ve done it multiple times. Instead of impulsively spending your money, get a clear jar and put in your extra pennies and notes into it.
Over time, your jar will fill up. Now you can do one of two things: save or spend it on something from your aforementioned wish list (no prizes for guessing which one I’ll tell you to do).
It may seem daunting and stressful to try and save while making minimum wage. And this is where self-reflection and adequate financial literacy comes in. Take your time to build these practices and use your money wisely.
Slow and steady wins the race so don’t feel pressured into having to save your money straight away. Tackle each issue one by one and before you know it, you’ll have a hefty balance n your savings account!
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