How to save money on a low income

how cut expenses

Saving money on a low income is not an easy feat, and that’s especially true when you have kids and all the expenses they bring. Once you’re done paying for kid’s sports, camps, clothing, and school needs, it’s easy to find yourself with nothing left at the end of the month.

You may find your situation immensely frustrating, but it’s important to know you’re not alone. A recent study from CareerBuilder noted that 78 percent of American workers are living paycheck-to-paycheck — meaning most of us are struggling to keep up with bills or save money each month. The study even noted that 1 in 10 workers who earns $100,000 or more are living close to the cuff, which just goes to show how prevalent this problem has become.

The reality though is that, no matter your income, saving money is a matter of math. You have to spend less than you earn at any level if you hope to squirrel away some money for a rainy day. It’s just significantly harder to get the job done when your income is low since you have less money to work with.

Why every woman needs at least $1,000 in her name, alone

7 ways to save money on a low income

Saving money on a low income isn’t easy, but it can be done! And some of the strategies you can use to save may be less painful than you think. Here are seven steps you can take today that could make a huge difference in your bottom line.

Create a monthly budget

You may be wondering, “How do you budget your money on a low income?” When you’re barely getting by, the thought of creating a budget might seem unrealistic or even comical.

However, creating a budget makes sense no matter how much you earn. Keep in mind that a budget is nothing more than a “spending plan” you can use to dictate where your money goes each month. In that sense, a budget helps you be proactive about your finances versus just letting the chips fall where they may.

Related: How do I buy stuff I can't afford?

To get your budget started, take a few hours and go through your last few months of bank statements and credit card statements. Tally up all your spending in common categories like food, utilities, transportation, and entertainment for each month.

Tiller is an excellent budgeting tool used by millions of moms. It creates easy-to-use Excel or Google sheets to help you understand where you are spending, where you can cut out extra expenses, and help you set and reach your goals.

You may be surprised to find out how much you’re spending on miscellaneous purchases, dining out, or another category. And sometimes, you have no idea you’re actually overspending on something until you see the proof in black and white.

Once you track your spending from the last few months, write out a budget that sets limits for your spending for the upcoming month. Include all your fixed bills like rent or mortgage payments, utility bills, and insurance, and create spending caps for categories where you have some wiggle room. Ideally, you’ll be able to set aside some money in your budget for savings right away — even if it’s a small amount. If not, you’re going to have to do some cutting to find the savings you want. (See also: How to create a single mom budget you will stick to)

How to save money on bills

When you’re trying to save money on a low income, you can make a big impact if you’re willing to give a few things up. Here are strategies to try cut your expenses if you need to cancel or renegotiate some of your bills:

Sign up for TrueBill

TrueBill is the leader in the bill negotiation space. This service identifies any recurring subscriptions, and will cancel or negotiate down recurring bills like iTunes, Hulu, SlingTV, cable, Internet, cell phone, BlueApron or even Plant Fitness (face it—you never go!). TrueBill is 100% free unless they negotiate down a bill, in which they take 40% of the savings.

Best of all: They do the negotiating—and, if need be, the cancellations—for you. No more begging for a better rate, or waiting on hold for a supervisor who may or may not see things your way, or awkward conversations with customer service reps whose job it is to get you to change your mind about canceling.

How does TrueBill work?

  1. Go to TrueBill.
  2. Upload a recent bill for one of the more than two dozen service providers they work with. These include: cable, internet, cell phone, gym membership, insurance, Amazon Prime, Spotify, Audible, Hulu, Netflix and TimeWarner.
  3. TrueBill reviews your bill, and then on your behalf, contacts the company to negotiate a lower rate. To do this, their expert negotiators find hidden fees they ask be canceled, apply special discount codes, or simply secure a better plan. Wealthysinglemommy founder Emma Johnson used Trim to negotiate down her bills, and saved $16 monthly AT&T bill, plus another $23.20 from her TimeWarner / Spectrum Internet bill—with no changes to her plan!! (How do they do that!?)
  4. TrueBill then charges you 40% of the savings.
  5. TrueBill automatically tracks your accounts, and questions any fees or recurring subscriptions that you’re being charged. If you want them to cancel or negotiate any bills, just say the word. Check out TrueBill now >>

Shop around for car insurance, life insurance, and homeowners or renters insurance.

If you’ve been with the same insurance company for several years, it may be time to get a new quote for all your insurance products. Bestow and Haven Life offer affordable term life insurance policies that can replace any expensive life insurance you currently have, for example. When it comes to other types of insurance, shop around with at least three companies online or in your area so you can compare.

Save money with green energy options

Living efficiently, and helping the environment can also save you money. Arcadia Power can help you reduce your energy usage, use more clean energy, and increase your overall energy consumption and cost by automatically switching providers as prices drop. It is free for you to use, and promises to save you on your monthly electric or gas bill.

In addition to reducing the fees you pay for services, look for some easy ways to save money on bills around your home. This can include installing a programmable thermostat so you can save on air conditioning or heating while you’re at work, or making sure you turn the lights off when you leave a room. Try turning up the temperature on your air conditioning when you’re not at home, or even see if you can set lights to timers to save on your power bill. Remember that even small actions can add up!

Take a close look at food spending

Like it or not, food spending is one area where almost everyone has some trouble sticking to their budget. It’s way too easy to go out to eat, especially when we have services like Doordash and Uber Eats that will bring food to your front door!

When you create your monthly budget, it’s important to set limits on food spending and stick to them. Not only should you set a limit on grocery spending for the month, but you should set a realistic limit on dining out. If you can cook at home at least most of the time, you may be able to splurge for a few dinners out each month. Here is our guide to meal planning for moms.

Pay off high interest debt

If you have credit card debt or personal loans, it may be ruining your chances at saving money. Keep in mind that the average credit card interest rate is now 18%, according to, and it’s possible you may be paying more than that!

When you have high-interest debt like credit card debt or a personal loan, one of your first goals should be to find extra money to pay it off. If you can cut your grocery spending by $200, for example, you could use $100 to throw toward your credit card bills on top of the minimum payment, then save the other $100.

The more high-interest debt you can pay off, the more money you’ll have to spend and save each month. Remember that money paid toward interest is practically set on fire, but that you can reduce this amount by paying down the principal of your debt balances.

Refinance your debts

Also consider refinancing some of your debts. When it comes to credit card debt, for example, you may be able to sign up for a balance transfer card that gives you 0% APR for up to 21 months. Keep in mind, however, that some cards that offer 0% APR for a limited amount of time also charge a balance transfer fee of 3% to 5%.

Resource: Find a balance transfer credit card

If your credit is low, and you don’t qualify for a refinance, work to fix your credit. Read: How to repair a low credit score — fast!

Consider refinancing your mortgage with LendingTree or refinancing your auto loan with Lending Club. Doing so could help you secure a lower interest rate and/or a lower monthly payment, which could help you pay down debt faster or free up more cash to save each month.

Automate your savings

Once you slash your spending and find some “extra” money to save, it’s important to make sure you’re actually moving that cash to a savings or investment account each month. If you don’t, it’s far too easy to wind up spending it accidentally.

We recommend a few strategies. First, you can set up automatic transfers to a savings account each month on a specific date or on payday. Second, you could sign up for Digit, which is an app that analyzes your spending and saves the perfect amount of money each day on your behalf.

You can also consider signing up for Qoins — an app that uses spare change from your transactions to help you pay down debt faster.

For example, if you hook your accounts up to Qoins, it takes a $43.27 purchase, rounds up to $44, and puts the 73 cents towards your debt. Multiply this function times 100 or 200 transactions per month, and your debt starts to disappear without any additional effort — and little financial pain.

If you're ready to start investing, check out robo-advisor Ellevest — built specifically for women, this tool helps you set any financial goal, and makes it very easy to automate low-fee investments for short or long-term goals like retirement, buying a home, having a baby or a vacation.

Our Ellevest review >>

Remember that any savings or debt repayment you can automate will help you tremendously! When you let someone else do the work, you’re much less likely to forget.

Don’t rely on child support

You may be wondering what to budget in child support, but there’s no perfect answer to this question. If you receive the exact amount of child support you’re entitled to consistently, for years on end, it miiiight make sense to include it in your monthly spending plan.

However, if you are among the 60% of recipients for whom child support is sporadic, unreliable, or MIA, consider any payments you receive as “extra” and use them to speed up debt repayment or to beef up your savings.

Your goal should be building a lifestyle you can afford on your own income, then using child support to reach the family goals faster as it comes in.

After all, even if he pays religiously, your kids’ dad could become unemployed, disabled, pass away, or otherwise be unable to pay. Can’t get blood from a stone.

Plus, any energy you spend trying to make him pay is energy that is better spent growing your own income. I know how tempting it can be to keep your income low by turning down a raise or promotion, or hiding income, in order to be eligible for more child support. In the short-term, this might make sense, but long-term, you hold yourself back. Don’t give him that kind of power over you!

How to make more more money

The best way to save money on a low income is to make more income!

Not always easier than it sounds. Thanks to technology (like your phone!), and companies growing demand for smart, hard workers, flexible, at-home jobs are readily available in every industry — including traditional fields like nursing, teaching, engineering and more.

Check out: 13 career-level work-at-home jobs that are great for moms

About Holly Johnson

Holly Johnson is a financial expert, award-winning writer, and Indiana mother of two who is obsessed with frugality, budgeting and travel. Her personal finance articles have been published in the U. S. News, Wall Street Journal, Fox Business, and Life Hacker. Holly is founder of of the family finance resource,, and is the co-author of Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love. Learn more about Holly here.

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