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How to build savings on a low income

Reading time: 15 minutes
Scottish FriendlyDecember 29, 2023

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Saving money on a low income, particularly when your priority is covering expenses, saving money can feel like an uphill battle. However, with the right strategies and mindset, it is absolutely possible to build a savings cushion.

Whether your income has recently changed, or you’ve been struggling for a while, it can be tempting to give up on your financial goals.

But you don’t have to! Here are a few suggestions to help you make the most of what you have and give you the freedom to build your savings.

Cut costs where you can

While this may sound obvious, trimming unnecessary expenses can be a game-changer.

The first step to building your savings pot is working out what you have free to save and then finding ways to increase this. Examples of what you could do include:

1)     Negotiate lower rates with service providers

2)     Opt for home cooking rather than eating out

3)     Minimise the amount of streaming services you subscribe to

4)     Have a clear out and sell items you no longer need

5)     Try meal planning to lower your grocery expenses

Boost your income to give yourself more money to build your savings

If you’ve already cut your spending but you still want more money to save, then you may want to consider options to increase your income.

This may seem hard to do if you’ve already got a busy life, but there are many ways to make some extra money without taking on big commitments. Here are some suggestions:

  • Check if your work has any overtime opportunities available

  • Enquire with your manager about a pay rise. It can be a great idea to start these conversations as, even if they feel you’re not quite there yet, they may be able to guide you on how you can move up. If you are looking for tips on how to have a discussion like this, career website Indeed has some great information which you can find here: How to Ask for a Pay Rise

  • If you work a part-time or hourly job, you could check to see if there are more hours available for you to work.

Sell unused items

There is usually a home for everything, from clothes to kitchen utensils to toys your children no longer play with. Why not get involved in a car boot sale or a local market, Alternatively, there are online options such as:

  • Gumtree

  • Facebook Marketplace

  • Vinted

  • Depop

  • eBay

Even if you sell your items for less than you paid for them, any money in your savings is better than none!

Get involved with a side hustle

While a side hustle sounds like it may take up a lot of time, this doesn’t always have to be the case. Here are some suggestions which could give you some more cash in your savings pot.

Freelancing: this is a tried-and-trusted way to earn extra money. This is an opportunity to use your skills to take on flexible project-based work for a company, including graphic designers, writers, editors, interior decorators, video editors and website developers. You could market your skills to your personal network or use portals such as Freelancer.com.

Pet sitting: This is a great idea for animal lovers and is easy to set up. You could take care of pets for owners who are working or away on holiday. Of course, you may need relevant insurance and licenses, but it may be a great, fun way to make some extra money.

Make your own products: Whether it’s baking some sweet treats or making handmade goods, you could sell your ready-made or make-to-order goods online on sites such as Etsy or at local markets/fairs.

Online courses and coaching: Perhaps you have an area of expertise which you could cash in on by creating and selling online courses or partaking in a form of coaching in your spare time.

If you are looking for more ideas, Forbes have a great article on all the ways you could earn some extra money: 18 Side Hustle Ideas To Make Extra Money – Forbes Advisor UK

You never know, you could end up finding a new passion or even career!

Have clear goals to maintain your motivation

Even if you aren’t sure of your goals to begin with, just getting started and finding ways to stay motivated will help you determine what they are, even if your goal changes over time.

Perhaps you want an emergency fund to be better prepared for the future or you have something specific to save for such as a new home. You may also be saving for your children, to give them more opportunities when they reach adulthood. Whatever your aims are, creating consistent habits and even saving little and often, can go along way to achieving your goals.

Good luck and happy saving!

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