If you have a low income with many expenses, you need to inculcate the habit of saving. The tips in this post would help you in making saving a practice to accumulate a corpus for future needs. Read on!
Low income people always have one basic question – how can I save money? This is because when it comes to savings these people are the worst sufferers, especially if they have a large family with many dependents. People with low salary or low income in business find it difficult to make ends meet and thus savings become a distant dream for them. However, the fact is despite how meager your income may be, you can certainly not ignore the importance of savings in life.
So, what is the best way to save if you have a low income? The answer is – by planning and by disciplined management of finances.
So, here we are offering certain tips that will help you manage your finances or your limited income by maintaining financial discipline in life. Read the tips below to know strategies on how to save money with low income.
7 Tips to Save Money for Low Income People
Below are some money saving ideas that you can imbibe in life to making saving a habit:
- Create a Budget and Stick to it – Though budgeting might restrict your expenses, however, sticking to a budget is definitely one of the best ways to save money for the future. It allows individuals to control their expenditure. And when you follow controlled expenditure, you stay away from wasteful spending. Hence, by budgeting yourself you will know how much money to spend and for what purpose. This way, you could understand your monthly expense pattern, which will assist in your saving goals. So, you could ensure how much you saved, that is, your actual saving as compared to how much saving you wanted per month. Hence, it is important to allocate your money properly and to have efficient tacking of the same.
- Inculcate the habit of Saving – There are people who find it difficult to save. If they have an extra amount in hand, they spend on careless expenses. Thus, to help you avoid this situation you can treat your dedicated savings amount per month as a monthly bill and keep it aside. If you consider your savings as a certain bill, you can keep that amount aside as soon as you get your monthly pay like other monthly expenses and bills. To start with, you can pick a small amount. Later, you can use that amount to invest in a savings plan with guaranteed returns.
- Invest in insurance or small investments to secure a financial future – As and when possible, try to invest your money in different savings and investment options like getting a Life Insurance policy or any savings plan that allow secured and guaranteed returns. Such plans serve as efficient savings tools if you use them well and can help you create wealth in the long run to support you meet your future financial goals. There are a number of Life Insurance plans offered by several top and best Life Insurance companies functioning in India. You can be future ready with these plans and build wealth smoothly. All you need is to check out various such plans online and compare them before buying the best one from among them.
- Keep a tab on Housing Expenses – As per research, there is a thumb rule to follow when it comes to your housing expenditure. So, you are not supposed to spend more than 30% of your gross monthly income on housing costs. Hence, if your monthly salary is INR.30,000, the amount you should spend on your monthly house expense should not cross INR 9,000. Thus, if you want to build a corpus, the best way to save money is to reduce your expenditure to the minimum by opting for downsizing options as much as possible.
- Budget your food as well – The normal expenditure of an Indian on daily food is more on an average as compared to many people across the globe. Research states that 3.5 % of a person’s per day income in India is spent on food. So, it feels like an impossible task to stick to a food budget. This is because Indians cannot control their temptation to eat out. However, for people with low income, such spendthrift eating outs can cost dearly.
- Limit redundant costs to accumulate savings – Last but not the least, if you still find it difficult to save money, you must cut down all your unnecessary expenses. For this, you need to sit and go through your expenses and the budget you have created. Now, compare the costs that you may avoid or ignore.
- Look out for more expenses that can be restricted- Check the extra expense that you don’t need such as:
- Check the unnecessary subscriptions that are not required and can be cancelled
- Check for any expensive plans like phone, internet etc.
- Do not consider any unnecessary expenses for entertainment purpose
By cutting down your unnecessary expenses, you can boost savings. Though it may seem a little difficult at first, once you start practicing it regularly it will get easier.
Read More: 8 Smart Ways to Grow Your Money!
The bottom line
Most untoward situations in life are always uncalled for, which cannot be eliminated. However, taking precautions to manage them is something we can do. So, calculate possible life situations where money would be required and understand how to save money accordingly for the same. Let savings play a regular and constant component in your life. If you do so, you can start saving even with your meager income.
Hence, if you are serious about your decision of saving and building a corpus, judge your current financial situation well and set saving goals accordingly. Try to imbibe the tips offered above in your life and you will soon be able to manage savings well. In this direction, learn ways on how to save money for the future and plan out various investment and savings plans like Life Insurance and short or long term saving investments to secure your future along with the future of your family.
Check the best portals of insurance brokers to understand and compare plans and choose the best one from among a variety of Life Insurance plans to suit your requirement best.
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