Saving money when you have a small salary can seem like a real challenge.
But still, low income or not, you probably have goals and projects you would like to save for . And you shouldn’t have to give it all up.
Luckily, there are simple and effective ways to put aside regardless of your income level – and without having to deprive yourself of everything .
In this article, I share 7 tips on how to save on a small salary .
I keep a budget
You may have crossed your fingers reading this article, hoping that you are not recommended for the umpteenth time to stick to a budget.
However, if this advice comes up often, there is a good reason: it works.
And if keeping a budget feels as good as filing your tax return, maybe you have a pretty wrong view of the budget.
My general advice is to view the budget not as a constraint, but simply as a spending plan . Because that’s exactly what it is: a document in which you decide how you’re going to spend the next month.
If you don’t have a plan to spend your agent, spending it haphazardly becomes very easy. And often, we don’t even realize it.
Nor is it a question of deciding in advance to deprive yourself of everything in order to save money . The goal is to direct your spending to what matters most to you . Including spending your money on what gives you the most pleasure!
The key is to learn to spend consciously, and factor your long-term goals into your budget — not just your short-term pleasures.
Repay your credits
Getting out of debt should be a financial priority – especially when it comes to consumer credit.
In addition to losing money each month in interest spent, the loans to be repaid come to take up space in your budget each month.
Having credits limits the amount not only that you can save for your life projects, but also the money that you have available for your next vacation or for Christmas presents.
The more debt you accumulate, the less you can spend on everything else. You’re getting poorer – and making the bank richer along the way.
Of course, there are “good debts”, but you probably know it: consumer credit is not one of them .
Set your priorities
One of the reasons why it is often difficult to stick to a budget is that we are afraid of depriving ourselves.
We want to keep all our subscriptions (including the one to the gym which we hardly ever go to), drive a new car, buy new clothes regularly, go on vacations and unexpected weekends with friends, eat out , and being able to spend our money when we want.
All while having life projects, such as a comfortable retirement, the purchase of a principal residence, financing the studies of his children and launching this project which has made us dream for years.
And technically, there’s nothing wrong with wanting those things . The problem comes when you think you can have it all .
If you live to have everything, you will never have enough.
Especially since this problem is present whether you have a small salary or a large income.
Of course, having a large salary will surely allow you to live more comfortably. But many of us increase our spending as soon as our income increases. And with all this, your expectations also increase. As humans, we tend to always want more.
This is why it is absolutely necessary that you define your priorities .
It’s also knowing why you want to save that will help you spend less money.
Because it is very difficult to save when you don’t know why. Why say no to a weekend with friends just to make your bank account bigger?
But saying no to this world tour project that has always made you dream will be much easier.
The goal is not to spend less, but to spend better.
Saving money on a small budget becomes much easier when you know exactly what to spend and have set your priorities.
Do you really need it?
The author teaches us how to stop wasting your money on things we absolutely don’t need and how to change our relationship to consumption.
Don’t forget your precautionary savings
Your priorities are unique to you. Never listen to someone who tells you that your “priority” should be buying a primary residence, or that you shouldn’t spend your money on X or Y.
That’s why it’s called “personal finance”: it depends on everyone.
With one exception: your precautionary savings .
Everyone should make it a priority to protect themselves in the face of financial emergencies.
But the idea of building a safety cushion can of course seem difficult when you are on a small salary.
If there is one certainty in personal finance, it is that the unexpected will always happen one day or another.
And if you don’t have the funds to pay for it, you’re likely going into debt. This is how you enter the vicious circle of debt, which makes you pay interest on an expense that you could not already afford to make at the base.
And you quickly understand that it only takes one or two sequences of bad luck to find yourself in a very delicate situation.
So if your goal is to save money, one of the first things you can do to save is to protect yourself from financial emergencies by building up your precautionary savings .
Of course, this can take several months. But you’ll need to actively seek to regularly set aside money to protect yourself – even if it means selling a few unused items or finding out about salary supplements.
Many of us would love to save, but just can’t.
Either because we feel like it’s impossible, or because we forget, or because we don’t really know how to do it or how much to put aside…
But one thing is certain: if you wait until the end of the month to save “what’s left”, you will quickly realize that often there is nothing left .
The ideal is to pay yourself first.
Each month, a few days after the day you normally receive your pay, set up an automatic deposit to your savings account .
A quick aside: a lot of people seem to think that you have to save a lot of money every month, or that otherwise, putting aside is pointless.
Save what you can , even if it means starting small. If you can only set aside $20 per month, that’s still better than $0. Nothing will prevent you from increasing later if necessary.
There are also savings apps that allow you to save money automatically and painlessly over the months.
Moka’s mission: to help you achieve your financial goals through automatic savings. Moka rounds up your purchases and rounds aside and, if you wish, invests your spare change in socially responsible investment solutions.
Optimize your daily expenses
If you feel like there are always too many months left at the end of your money, you might want to try optimizing your spending to make some room in your budget.
The goal is not to spend nothing and cut everything, but to get rid of certain useful expenses , or things for which you pay too much without bringing you much.
This type of expense will be unique to everyone, but here are some examples of categories in which it may be interesting to sort:
- Try to save electricity if your bill seems particularly high
- Changing insurance , such as switching to a new home insurance. This is the kind of contract that we rarely revisit, while new home insurance like Luko or Lemonade can save you hundreds of euros a year.
- Change banks , in particular to turn to free or low-cost banks (and avoid the often very heavy fees of traditional banks).
- Sort through your existing subscriptions . You can for example by platforms like Origame which allow you to manage all your subscriptions and find cheaper alternatives to each of them.
Another item in which we often tend to overspend is the food budget .
Whether it’s saving money on groceries or eating out, trying to cut back on food-related expenses can really save room in your budget.
One system I’ve implemented that has helped me a lot is to plan my meals for the week in advance . In addition to limiting food waste, it’s a lot of time and peace of mind gained by not having to wonder what to eat every day (which avoids fast-food outlets when you don’t know what to cook).
Save your windfall cash flow
Sometimes, you may be lucky enough to have “exceptional” cash inflows – that is to say that you had not necessarily planned at the start.
It can be bonuses at work, gifts, tax refunds (it’s rare, but it happens!), money earned by selling unused things…
And often, we tend to want to “benefit” from this earned money… just no matter how . We treat it a bit like it’s money that doesn’t count.
Yet it is real money. And if nothing is stopping you from enjoying it, it’s also an opportunity for you to set aside and put yourself even further on the path to financial security.
Try to systematically set aside a certain percentage of your windfall cash flow (for example, 50%).
For example, you can take the opportunity to replenish your emergency fund, repay your loans in advance, or reach some of your financial goals more quickly and set aside for your projects.
Increase your income
Trying to save money on a small salary can be very difficult. Sometimes even the idea of cutting just a few small expenses can seem downright impossible.
Because once we have reduced our expenses, as shown in tip number 5, it can be difficult to dig deeper.
And the point isn’t to spend hours growing your own chives to save 50 cents a week. Surely you have other things to do.
Learning to save and especially to spend better is a crucial step in managing your money. But after a while, the best thing you can do to get ahead financially is to increase your income .
The problem is that we also often have the impression that it is impossible.
However, there are plenty of ways to get a little extra income – whether it’s a one-time cash flow or outright starting your own business alongside your salaried job.
Whether you want to walk dogs, start your blog, resell stuff lying around in your closet, become a web writer, or start your Etsy shop… there are plenty of ways to earn a few extra bucks every month.
This is also an opportunity to start looking at creating passive income that can sometimes pay you for years.
Saving money on a low income can seem daunting, but it’s rarely an insurmountable obstacle.
Go slowly, one tip at a time, to gradually improve your financial serenity and progress over the months.
Your situation probably won’t change overnight, but you’re still laying a solid foundation for the future .