Saving on a low income
October 27th, 2006 by digerati
MoneyCentral had 19 tips on how to save with a low income. Most of them involve cheating your conception of where your money is. This can work well. Open additional (interest bearing) savings accounts and put money there so it doesn’t appear on your normal balance. Bank of America will do this for every purchase on your debit cards with them (they round up to the next dollar. It’s like saving change in a jar, only electronically.).
Here are some useful tips on saving with a low income:
- Stash a dollar in a jar every time you do laundry. (or every time you get groceries, or every time you put a dollar in a jar, etc).
- Put all your change in a jar and cash it in every month. This is great unless you buy everything with cards. I never have enough change for the meters, let alone to put in a jar.
- Use coupons and rebates and put the money in a savings account instead of spending the difference.
- Take free money — American Express has a card offering to move a percentage of what you spend to a high yield savings account. It’s like cash back, but automatically earning money.
- Have the bank automatically move a percentage of incoming money into a separate account.
- Trade services with neighbors or friends.
- Buy non-perishables in bulk (i.e. cereals, rice, pastas, canned goods). The problem with this is you have to have space to store them. I have basement storage in my building but I am afraid to put food down there because of the spiders.
- Buy generic instead of brand name. (This might be harder if you have kids).
- Shop at goodwill.
- Clean with homemade solutions. “There is little that can’t be cleaned with a mix of vinegar and baking soda.”
- Buy in bulk. If you don’t have storage space buy with friends.
- Find hobbies with low cost. Biking, running, reading (libraries!) or web browsing.
- Use credit cards rather than cash. People tend to spend more when they use cash
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Eric Says
“Use credit cards rather than cash. People tend to spend more when they use cash”
While that’s true, only spend what you can pay back immediatly when you get home. Following that thought, get a card that offers cash back or some other added incentives. (e.g., Air Miles, Petro Points, etc.).
The golden rule is to always, always pay back what you use immediately.
Oct 27th, 2006 at 12:19 pm
digerati9 Says
Something else I should have mentioned….
Most card companies now offer “pre-paid” cards. These are a great option for a few reasons:
1) The credit card laws still apply, so you can dispute charges if necessary
2) You can control spending by setting your own limit
3) You have to pay off enough of the amount to have credit for the next payment period. This means you have to be actively engaged in your finances.
Oct 27th, 2006 at 2:32 pm