If you are living on minimum wage, you need to learn how to save money fast on a low income if you don’t want to get into debt. It can be hard to make all the bills when you have a limited amount of money coming in… but one of the best ways to ensure you can afford to pay those bills is to get rid of unnecessary expenditures. If you can reduce or eliminate five big bills that you are paying, you should have a lot more money left over at the end of the month so you can get on firm financial footing.
1. Get rid of your monthly credit card bill
It is impossible to save money on minimum wage for emergencies or for retirement if you are spending all of your spare cash on interest for your debt. The average household with credit card debt spends $1,300 a year just paying interest alone. That’s why if you have a balance on your credit card, make it a point to pay off the card as soon as you possibly can. Stop charging on it immediately by getting on a budget and not spending money unless you have the cash to pay for the items you are buying. Once your credit card is paid off, only use it for a small purchase each monthly that you pay off in full so you can keep building your credit score. Don’t carry a balance and waste the cash you work so hard to earn on interest payments. You’ll save thousands during your lifetime if you don’t waste money on interest payments but instead put that cash into a savings account or an IRA.
2. Shut off a phone line
If you have a cell phone and a landline, you very likely do not need both of these types of phone service. Consider getting rid of the landline altogether and substituting it for a cell phone. Or, if you want to drop both the cell phone and landline phone service, options like MagicJack can be a way cheaper way for you to make and receive telephone calls. If you want to drop your cell phone, you could also look into whether you qualify for the LifeLine program, which provides a free cell phone and a small amount of minutes each month for people who have lower incomes. Another option would be to switch to a phone where you buy minutes as you go and use it only when you need it. If you switch to an Internet phone service for home and either get rid of a cell or use a cell only for emergencies that you buy minutes for, you will be better able to save money on minimum wage and living on minimum wage should be much easier without this unnecessary expense.
3. Get rid of your monthly car payment
A car payment is a big expense that most people have. Consider looking at alternatives like getting rid of one of your cars and sharing with a spouse or roommate. If you can bike or walk to work and use a service like Uber or Lyft only when you really need a car, it may cost you far less than dealing with car payments, repairs, gas, insurance, parking, and all the other expenses that go along with having a car. If you must have a vehicle, pay off your car loan as soon as you can. Then, set aside the money you were paying towards your loan for the purchase of another car. Try to drive your current vehicle until you absolutely cannot do so any more and hopefully by that time, you’ll have saved up enough to pay cash for a reliable but inexpensive new car so you won’t have to take out another car loan.
4. Drop unused memberships that come with monthly bills
When you are living on minimum wage, you cannot afford to pay for services you don’t need any more. If you have a gym membership, are subscribed to any music services you are no longer using or are otherwise paying for monthly memberships, consider dropping these bills. You can walk to get exercise and get plenty of music options for free without paying your hard earned money each month. By focusing on how to save money fast on a low income, you can put aside cash for your important goals rather than wasting money on things that don’t provide long-term value for you.