Inflation has been crazy however wages in generally has not matched inflation (if your increment matches then congratulations) but for me, my salary has not matched up to the inflation level we have been seeing from the start of 2022.
Of course, even individuals with a high income have mentioned that they have been cutting down on expenses in order to save or to pay the bills as prices increases on petrol and cars.
This is not to say that the lower income earners are not as affected as daily necessities like food, drinks and groceries have been increasing at a scary rate. Every time I visit the hawker centre, the prices all have a sticker over it and shows a new price, I understand the hawkers or food establishments as raw ingredients have gone up quite substantially too.
We will have to live with it while working to increase our income
In the meantime, spending money on necessities and paying our bills are a need and we have to do that to survive. How then can we survive and even save money while on a low income?
Read more: How do you feel about your current financial status? | HOW MUCH SAVINGS DO PEOPLE IN THEIR 20s HAVE?
It has been really tough looking at my investments nowadays so just skipping that and letting my automated purchases do the job, on the other hand, I have more time to occupy myself and write more.
How to then save money on a low income? Or to save money generally
- Manage the number of times you eat at a restaurant or cafe
Restaurants and cafe prices are high and on average can easily go beyond $20 per pax and even more after accounting for GST, service charge and if you get a drink along with your mains. If you are able to manage the number of times you go to a restaurant or cafe per week/month, this can really help in your finances.
There was the cafe fever awhile back and everyone was having a good brunch during the weekends or even weekdays but you are able to assemble a nice breakfast at a much lower price at home. Alternatively, there are affordable options that you can opt for rather than cafes.
Of course, the occasional indulgence is all right especially if you can afford and enjoy it but you can limit it to twice per week and maybe visit restaurants only on special occasions. Cooking at home is also great especially if you have a family, although groceries have increased in prices, it is still much more affordable than visiting a restaurant for meals every weekend.
- Cut taxis or ride-hailing services
This is a huge factor in saving money as taxis/ride-hailing services will become a habit once you get too comfortable. What’s worse is that you would be subjected to the peak hour surcharges if you work 9-5 and the mornings and evenings are when the surcharges are high.
My family has always practiced using public transport and in most cases plan our day with public transport meaning to leave home earlier if needed and to search for public transport routes. Ride-hailing has made things so convenient especially so when you can just input your credit card details in and payment is made without you noticing hence it can build up easily.
The pandemic has also made ride-hailing the preferred choice as you reduce exposure to the people that you meet but the costs is really high and it doesn’t make sense to ride a taxi every single day unless you have a lot of disposable cash (eg. did not buy a car) but I am sure the money can be put to better use.
- Less shopping or buying
Similar to the first 2 point, it is a choice of wants or needs. It is all right to get clothes once in awhile to ensure you look presentable but make choices on outfits that can be used more often and in your daily life.
I have to admit that my fashion sense sucks and I don’t pay much attention to what I wear and I know certain jobs require a good closet but choose items that can be worn more frequently and are comfortable.
Similar to buying clothes, buying other stuff might seem essential at the moment but always give it some time and you might realise you do not need it actually. Sale and promotion might look attractive but it doesn’t mean you have to get it just because it is on sale.
- Start small and it will slowly grow (eg save $27.40 per day to get $10,000 in a year)
Get started and if you feel uncomfortable investing as you want to save a sum to keep aside first then do so but remember to start investing once you have saved enough. Of course, most of us have to start saving first eg building up emergency funds or have a bucket of spending money. Saving is easy for some but might be tough for others.
It is important to cultivate the habit of saving as it is the foundation to building wealth, after saving then would you look at making your remaining money work for you. Did you also know that putting aside $27.40 aside everyday for a year will get you $10,000. $10,000 is a substantial amount if you just started working and I can still remember my excitement when I first managed to achieve that. I even went to my mum and proudly told her about it. Once you have cultivated the habit, it gets easier over time.
Read more: Millennials around the world are becoming huge savers but is saving sufficient?
- Budget your salary and follow through
I have mentioned this in my previous article, do take a look at it if you are interested.
Tough to live on a tight budget for a prolonged period, let loose once in awhile but not too crazy and ultimately, you have to learn to increase your income
Being able to save is a privilege especially so if you are young with no huge commitments and am earning a comfortable amount where you can put aside a sum. It might be tough in the beginning when you start, my first starting salary was $2700 (gross) and took home about $2160. It was covering my basic expenses but my savings amount was small, it slowly build up as my income increased the past few years. Increasing your income helps a lot as you realise you can expand your savings or investments with the additional amount. So it is also important to try to increase your income if you find that the amount is limited for you to save. Hope this has been helpful to you, see you in the next one!
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