How to save money fast on a low income

Last Updated on March 7, 2020 by Dave Farquhar

When money is tight, life gets more difficult all around. When I was young and didn’t make much, I couldn’t find much advice on scraping by. I have some now. So here’s how to save money fast on a low income.


When I talk to someone with financial problems, the one thing they always have in common is not budgeting, or not sticking to a budget if they do have one.

It helps dramatically if you write down what you spend every month, the compare it to what you make. To save money, you spend less than what you earn. That sounds like common sense, but it’s much easier to do once you have all the numbers right in front of you. Once you see what’s possible, it gets easier to stick with it.

The 50/30/20 rule

Items on your budget should fall into three broad categories: Needs, wants, and savings. Aim to spend no more than 50% on wants, 30% on needs, and save what’s left. Exceeding the 50/30/20 rule is how you save money faster.

Needs are things like housing, food, and basic clothes. Some items blur the line between needs and wants. You probably need a basic phone and basic transportation. But I’m a landlord, and I’ve long observed that many of my tenants have newer, more expensive cars and more expensive cell phones than me. That gap definitely falls into the wants category. Anything above basic furniture and appliances falls into this category. So does a big screen TV, game consoles, and gaming PCs.

Savings isn’t necessarily just piling up money in your savings account. Your 401(K) contributions count, so open your 401(K) to get your employer’s match and stay in it. You actually make more money in the long run by contributing while stock prices are down. Don’t take financial advice from commercials on TV. Television uses fear to control you. Paying down debt also counts in this category.

Don’t run the 30% to zero

One thing that helps you stick with it is to allow yourself a small amount of money to spend on a whim. This helps you feel less deprived. The hardest thing about budgeting is feeling like you go without.

How to save money fast on a low income is all about having that budget and finding ways to cut each line item a bit so you have something left over at the end of every month.

You can cut into that 30% and still have a hobby. It’s possible to game on a $100 PC. That’s one example.

The key to saving money fast on a low income is cutting down the cost of needs and wants as much as possible, so you can bank at least 20%, but hopefully more. So here are some tips on that.

Shop at discount grocery stores

How to save money fast on a low income
One of my favorite secrets to how to save money fast on a low income is shopping at discount grocery stores like Aldi.

There is no shame in shopping at discount grocery stores like Save-a-Lot or Aldi.

Poor people tend to shy away from generic groceries. There’s nothing wrong with them. Frequently the generics are made by the same companies who make name-brand products. They just slap a store’s label on the same thing and sell it at a discount.

The only thing you have to really be careful about at a discount grocery store is the produce. The produce has a reputation for being low quality at these stores. I think that’s a bit overblown, but in some cases the produce will be less fresh.

Given some time, you’ll figure out what’s OK to buy at discount grocery stores and when to bite the bullet and visit a more expensive store.

Be careful about dollar stores

I know a lot of people shop at dollar stores in hopes of saving money. I admire the willingness to do so, but be careful. Not everything at the dollar stores is actually cheaper. Sometimes the $1 items at these stores cost a little less than a dollar elsewhere. Sometimes they’re smaller packages, so you get less product. It might still be an OK deal but sometimes it isn’t.

How to calculate unit cost

To figure out if a bargain is a bargain, calculate the price per ounce. If a 10-ounce bottle costs $1, the unit cost is 10 cents per ounce. You simply divide the price by the number of ounces.

If a 12-ounce bottle costs $1.09 at a different store, the unit cost is 9 cents per ounce, and that’s a better deal. We’re talking pennies, but if your goal is to save money fast, the only way to do it is by saving whatever you can whenever you can.

Grocery shopping on a budget

I found it helpful to take a list with me when I shop. I don’t just track what I’m buying, but I also track what I’m spending. If I budget $50 for groceries, I want to make sure I”m actually spending $50, or better yet, a little less.

Eat out less

I think pundits and politicians exaggerate how much poor people actually do eat out, and I think they need to save their moral outrage. But preparing meals at home costs a lot less than eating out.

Here’s a trick: When you prepare a meal, prepare extra so you’ll have leftovers for lunches. You can even take it to an extreme and cook 30 days’ worth of meals one weekend. Here’s one cheap 30-day cookbook you can reference for ideas. Cooking in bulk can help you balance cost and convenience.

Also, if you’re in the habit of stopping for coffee every day at an expensive coffee shop, figure out how to cut back. Stop at a gas station instead, or make coffee at home. The occasional indulgence is okay, but don’t do it every day.

I remember in my early 20s it was easy to spend $20 a day on coffee, sodas, and lunch. That amounted to $400 a month. When I started packing a lunch, making coffee at home, and cutting out the soda, I saved a good $300 a month, which piles up very quickly. Of all the secrets of how to save money fast on a low income, this may be the most universally applicable.


Aim to spend no more than 30% of your income on housing. At one point in my life I was making $42,000 a year and living in an apartment that cost $600 a month. The math said I could afford $1,100. That $500/month savings piled up quick.

Once I got into a house, we aggressively paid down the mortgage. Beware of get-out-of-debt scams. There’s plenty of freely available financial advice out there, here on my blog and elsewhere online, so there’s no need to pay someone else to help you get out of debt.

Buying the right amount of house is one of the best secrets of how to save money fast on a low income.


I’ve written a lot about saving power. I once cut my power bills by 19% in a single year. LED light bulbs and thermal curtains are two of my favorite tricks. Depending on what kind of an HVAC system you have, a programmable thermostat can save you $25 a month, or even more. So a basic $25 programmable thermostat can have a very rapid payback.


How to save money fast on a low income
If you need cheap transportation, an old Pontiac Vibe is a great secret. It gives you Toyota reliability at a GM price, because Toyota made it for GM. One of the best secrets of how to save money fast on a low income is to not tie up too much of what you make in cars, because they depreciate so rapidly.

I know people in eastern cities who don’t even own a car. They use mass transit. That’s not practical in many parts of the country, but you don’t have to spend $30,000 on transportation either. You don’t need a new car every three years. Don’t let television or society tell you otherwise.

Look at the Long Term Quality Index, buy a used car that can go more than 200,000 miles, find a good mechanic, and drive it until it does. My wife and I drove 2002 Honda Civics for more than 10 years. Some people looked down on us for that, but we saved tens of thousands of dollars by doing that. When the time came to replace it, I bought a hybrid when gas prices were low.

Toyota Avalons aren’t the most prestigious cars on the road, but they run for 300,000 miles. I wanted better gas mileage than an Avalon would give me, but if I can get a hybrid Avalon next time, that’s probably what I’ll get.

If I were in the market right now for inexpensive, reliable transportation, I’d look for a Pontiac Vibe. It’s cheap, because it’s an orphan brand, but it turns out Toyota made the Vibe for GM. So you can get Toyota Matrix reliability without paying for the Toyota name. But the LTQI will give you lots of ideas.


I’ve heard the politicians who say that poor people who have iPhones should invest in their health care instead. While they kind of have a point, they’re also oversimplifying. Even if the buy the most expensive model and plan, that $1,000 phone and that $100/month plan only pays for two months of health insurance. So the politician is overestimating what that phone is actually costing the individual.

That said, there’s no reason to spend $2,200 a year on your phone. Just be realistic about your expectations of what it will get you.

For years, I bought myself whatever $100 would get me and kept it for 3-4 years. My current employer requires me to have an Apple phone, so I asked them to tell me the oldest phone they allowed. Then I bought that one, and paid $150 for it. Used, of course. My wife and I have a T-Mobile family plan that costs about $93 a month for both of us.

That’s still a lot of money, but it fits our budget now. Something we used to do, when I made less, was get an inexpensive plan with data for one of us, then get a pay-as-you-go plan. Each day, we decided which of us got which phone. In the event of an emergency, either of us could make a call.

Making this work requires some planning, and making use of wi-fi wherever you can, but it’s doable. There are a lot of tricks you can use to save money on tech. If you want to know how to save money fast on a low income without feeling deprived, this isn’t a bad place to start.


There is no shame in shopping at discounters. In retail, especially clothing, the stores that are growing are the luxury stores and the discounters. Shop at the discounters. In the long run, it makes the most sense to shop at stores like TJ Maxx, Marshalls, Ross Dress For Less, Kohl’s, and Burlington Coat Factory. You’ll get better selection and better quality clothes that last longer than clothes you buy at a store like Wal-Mart.

Also don’t forget thrift stores. If you’re willing to dig and have one near you, Goodwill outlet stores sell clothes by the pound, and $1.19 a pound at that. A surprising amount of it is good stuff.

I have one more suggestion. Go to garage sales and estate sales in the wealthier areas near where you live. When you find someone who happens to be your size, you can get clothes even more cheaply. This can be hard to do at some stages in life but if you can do it, it will help you save a fortune. If I need a few household staples that don’t go bad, I’ll still hit an estate sale to get them. Garage and estate sales are one of the best secrets of how to save money fast on a low income.

Work on your career

Some proponents of debt-free living are, admittedly, a bit out of touch. This advice scales, but if you’re making minimum wage, you’re still going to struggle. The biggest secret, whether those guys want to admit it or not, of how to save money fast on a low income is to make a bit more of it.

I can’t give a great deal of career advice outside of my own field, which is computers and technology, but I’ll offer what I can. Get an entry-level certification to help you get in or slightly up. Try to move into systems administration or network administration and then into security.

Outside of my field, I do recommend a college degree, and while my advice from moving from fast food to retail may not directly apply to you, its advice on tailoring your previous job experience to show what you can do in the job you want tomorrow does apply.

The important thing is that as you move up in your career, resist the temptation to inflate your lifestyle. It’s OK to reward yourself for new achievements but make it a one-time thing, not an every-month thing. The way I live now would scale down to a much smaller income with a few simple adjustments. Life comes at you fast. Having your finances in order and knowing how to save money fast on a low income doesn’t solve all your problems but it does make it easier to deal with them when they come.

Remember to give back

One final thing. Most books on finance tell you to give some of your money away. Now, I’m not convinced the people who write those books give away as much as they say they do, and if you’re truly impoverished, no reasonable person expects you to do this until you get out of that situation. But getting your finances in order to the point where you can afford to give away 10 percent of your income is a good exercise, if nothing else, and I do believe that you get back more than you give out.

Make an effort to support the organizations around you who help people, like your local food pantries, your church and for that matter, your local public school district. If you practice generosity with others, then you’ll receive more generosity during the inevitable times when you need generosity yourself.

Knowing how to save money fast on a low income is one thing. Helping the people around you, so that we all get to a better place together, is even better.

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