How to save money fast on a low income: 18 simple tips

Saving money can be a challenge when you don’t earn much of it, to begin with. It’s not impossible, though. In this post, we’ll explore how to save money fast on a low income, whether your goal is to buy a house or simply go on vacation.

18 tips to save money fast on a low income

If you have a hard time saving money at all, let alone quickly, I recommend checking out this article first. In it, I discuss the common reasons people have difficulty saving and offer some simple solutions.

Otherwise, let’s dive into these tips that will help you save money fast on a low income!

Note: This post contains affiliate links. If you purchase something from Amazon through this article, I’ll receive a small commission, which helps me keep the site as ad-free as possible.

1. Analyze your financial situation thoroughly

A calculator resting on grid paper beside a pencil.

When looking to save money on a low income, you need to have a comprehensive understanding of your financial situation. Key things to identify include:

  • how much debt you have
  • which debts are a priority (i.e. those with the highest interest rates)
  • fixed costs (i.e. rent and utilities)
  • discretionary costs (i.e. dining out)
  • take-home pay
  • monthly cash flow (subtract expenses from your take-home pay and determine whether you’re in the positive or consistently spending more than you earn)

It’s definitely worth working with a financial advisor on these points as they will be foundational to your planning. Of specific importance would be figuring out how to prioritize your debt repayments as this can be tricky to do on your own.

While spreadsheets are useful for analyzing your financial situation, you can also automate the process. My favorite tracker is Mint but there are many around. Choose whatever you like, as long as it gives you a clear picture of the aforementioned items.

2. Obliterate non-mortgage debt

Average Canadians and Americans have non-mortgage debt encroaching well into the five-figure territory. Obliterating this burden can free up hundreds, if not thousands, of dollars for saving each month. It’s like getting a raise without actually getting a raise!

Many people have found success with the debt snowball method. It involves aggressively tackling your smallest debts first before building up to obliterating the larger balances.

The debt avalanche method is similar but sees you aggressively paying off high-interest debts first before trickling down to loans with lower rates.

With either method, you’ll focus on getting rid of one non-mortgage debt at a time while making minimum payments on everything else. The beauty of this is that, as you mow through each loan, its minimum payment (plus whatever you’ve set aside to be aggressive) will go towards the next debt repayment, helping you build momentum.

Whichever approach you choose, getting rid of debt is a crucial step. Once you’ve done so, you’ll feel as if you’re making more money, even if your income hasn’t increased by a cent.


The reason advisors make such a big stink about non-mortgage debt is that it typically comes with higher interest rates. For example, a mortgage might only cost you 2% annually while credit cards typically charge within the ballpark of 20%.

3. Get your telecommunications bill reduced

This is another way in which you can immediately free up money to save every month.

Many people don’t realize how much negotiating power they have when it comes to telecommunications bills. Providers spend a considerable amount of money on acquiring new subscribers. In 2018, each new customer reportedly cost Comcast an average of $1,280.

It’s almost always much cheaper to retain existing subscribers, even if that means handing out discounts to ones that threaten to leave.

Your threat has to be credible, of course. It helps to reference a specific lower offer from another company, which shouldn’t be very hard to find. Providers typically offer ridiculously low rates to newcomers, so you can pretty much always save by switching.

As soon as a customer service representative finds out you’re thinking like this, they’ll enter retention mode. They may even transfer you to a specific department that does nothing but beg people to stay, often by handing out discounts.

I recently leveraged this knowledge into having a bill increase reversed. In fact, they did me one better and decreased my bill to $60 less than I was paying before the increase.

Ramit Sethi’s book I Will Teach You to Be Rich is filled with tons of great tips (including conversation templates) for these types of negotiations.

4. Pay with cash or debit

Rolled-up money bills.

According to a study by Slickdeals, the average American spends $5,400 on impulse purchases every year. In Canada, a Bank of Montreal study found the figure to be $3,720.

That’s a lot of money when you don’t earn much. I mean, just think of how great it would be to have an extra $5,400 or $3,720 sitting in your bank account at the end of each year.

One way to cut back on impulse spending is to reduce your reliance on credit cards. Research has consistently found consumers are willing to spend more when paying with plastic. In one MIT study, for example, shoppers spent up to 100% more on credit versus cash.

It makes sense. If you have a large credit card limit, spending $100 at the grocery store (a common impulse spending arena) when you meant to spend $50 doesn’t seem like a huge deal.

If you leave your credit card at home and only have a $50 bill in your pocket, though, you couldn’t spend $100 even if you wanted to. In fact, you’ll probably be very conservative about what you put in your cart to avoid the embarrassment of coming up short at the register.

“But Brandon,” you might be thinking. “I get points when I shop with my credit card!”

Unless you have some mystical 100% rewards card, you’re losing money. Switch to cash or debit when shopping and you’ll be surprised at how much money you have at the end of the month.


Credit card companies don’t just make money when you pay interest. They also collect around 1.5% of every transaction. Cashback and rewards points are clever promotions that get you to use your credit card more often, which equals bigger commissions.

Stores win big here too because, remember, consumers spend more on credit. In fact, research indicates consumers spend more when they simply see a credit card logo.

5. Consider investing

When you’re saving on a low income, progress can feel discouragingly slow. Typical savings accounts offer disappointing interest rates around 0.06%, which may leave you spending years trying to build up enough cash for major goals.

The U.S. stock market, on the other hand, delivers an average return of about 8% annually. In 2019, it returned 28.9%. Those returns can speed your progress up significantly, keeping you motivated in the process.

Here’s what $500 invested monthly in an asset producing an 8% annual return would look like over the course of five years.

YearTotal balanceTotal profit

Notice how your total profit grows faster and faster every year. That’s the power of compound interest at a higher percentage like 8%.

For comparison, here’s what $500 invested monthly in a savings account producing 0.06% each year would look like.

YearTotal balanceTotal profit

As you can see, an 8% return leaves you with almost $7,000 more. You also aren’t relying solely on your own capital for major progress.

Investing is not suitable for everyone, however. While returns can be tremendous, they’re by no means guaranteed.

As discussed in my piece on investing basics, the most lucrative assets (including stocks) also come with higher risks. You could lose money, especially in the short term.

I strongly encourage you to check out this article, which details the differences between saving and investing. In it, I also explore why saving is sometimes preferable, despite the lower returns.

You should also consult one-on-one with an advisor before deciding whether to invest.

6. Don’t turn down free money

Another way to accelerate your savings is to claim free money whenever possible.

“Wait a minute,” you might be thinking. “Free money? That doesn’t exist, does it?”

Actually, it does.

For example, many employers offer retirement plan contribution matching programs. Whether the match is 100% of your contributions up to a certain amount or even just 50%, this is literally free money. You can’t beat it.

If you’re saving towards your child’s education in Canada, you can claim free money via a Registered Education Savings Plan (RESP). The federal government offers substantial grants that can amount to as much as $9,200 per child from low-income families ($7,200 for everyone else).

In America, you have the 529 plan. This is sponsored by states and educational institutions. Depending on which plan you choose, contribution matching may be a perk.

These are just a few examples of free money. The bottom line is that, if you’re saving towards any major life goal on a low income, you should definitely look around to see what initiatives are available. You might be pleasantly surprised at what exists to help you save money fast on a low income.

7. Hire a professional tax preparer

A young woman with brown hair and black glasses sits behind a computer at her office desk.

A professional tax preparer can help you save money in several ways. For one, they’ll ensure you maximize deductions and claim any credits you’re entitled to.

Professionals are also less likely to make errors, reducing your likelihood of experiencing a costly and stressful audit. If you do get audited anyway, an expert will help you avoid getting taken advantage of by an over-zealous tax collector.

It’s especially important to go with a professional if you’re self-employed as you likely have expenses to deduct, which can save you thousands of dollars in taxes per year.

If you do qualify for a tax refund, use it wisely. For example, you can make some extra payments on high-interest debt or simply add the money to your savings, depending on your situation.


While an accountant probably won’t give you investing tips, they can help you save money fast on a low income via some good general financial advice you may not get from friends.

8. Use unexpected money wisely

When you receive money unexpectedly (i.e. in the form of a bonus at work or a gift), be very smart about how you use it. Instead of blowing every last penny, why not use at least some of the money to further your goals somehow?

In addition to helping you save faster, using unexpected funds wisely will shield you from potential future roadblocks.

For example, while saving an extra $1,000 this month might seem excessive, it will prove to be anything but if your car needs repairs next month and you’re unable to save anything at all.

Be aggressive when you can. You’ll thank yourself later.

9. Resist negative financial peer pressure

Unfortunately, you never have to look very hard to find people who are handling money irresponsibly. When these people are your friends, family members, and neighbors, their behavior makes it easy for you to slack on saving money.

There are two important things to remember, though.

First of all, when you base your financial decisions on what others are doing, you’re setting yourself up to achieve the same results they have. When it comes to people who spend money irresponsibly, that means:

  • lots of high-interest debt
  • little to no savings
  • no hope of retiring without a miracle

That’s a very depressing position to be in. And while you can always find people willing to pressure you into dire straits, you’re on your own getting out of them.

The second thing to remember is that you don’t know the full extent of someone’s financial situation. What you might assume to be reckless spending could actually be well within that person’s means. Unless you’re looking at their tax returns every year, you don’t know.

The only thing you do know for certain is your financial situation. Make decisions based on that rather than what you assume about other people.

10. Eliminate spending on things that don’t make you happy

A red vice with coins pinched inside it, symbolizing frugality.

If you look at last month’s bank or credit card statement, I bet you can identify a few expenses that didn’t have much of a positive impact on your life. Eliminate those purchases whenever possible.

Say you have a Netflix subscription but hardly ever watch movies. By eliminating the subscription, you’ll save yourself about $10 a month without robbing yourself of much value. It’s an easy win. Rack up a few of these and you could be saving hundreds of dollars per month without much effort.

Seriously, take a good look at your monthly expenses. You might be surprised at how many purchases you’ve been making begrudgingly, not realizing you’re more than capable of cutting them out.

11. Trim a little bit from everything

Why struggle to eliminate a single $100 monthly expense when you can spend $10 less on 10 things and achieve the same result? To put it more abstractly, don’t use a chainsaw when a pair of clippers will suffice.

This is a great, nuanced approach when you’ve already aggressively slashed your budget but still find saving difficult. Pay close attention to discretionary expenses but don’t forget to trim your bills, too. You should always be on the lookout for discounts on things like car insurance, groceries, and fuel.

12. Reduce your housing expenses

According to the U.S. Bureau of Labor Statistics, the average American spends 37% of their income on housing. That’s well above the 30% limit generally advised by experts. Forty percent of Canadians are also above that limit according to The Toronto Star quoting the Canada Mortgage and Housing Corporation.

If you’re among these statistics as a low income earner, consider whether you have the ability to find cheaper housing.

This doesn’t necessarily mean downgrading your living standards, either. If you live in the heart of an expensive North American city like Toronto or San Francisco, you may find cheaper yet nicer housing in a suburb.

If you don’t have an on-site job or other priority tying you down to a particular metropolitan area, you can move someplace even more emote and really save cash.

Other options include renting a room instead of an entire dwelling or, if you own your home, renting the basement out.

Of course, there are sacrifices involved here. But if you’re currently spending more than 30% of your already-low income on housing, something’s got to give eventually – especially if you’re serious about saving money.

13. Look for coupons when shopping

A man holding a credit card while online shopping.

Before you make a purchase, see if there are any applicable coupons.

This is incredibly easy to do when you’re shopping online; apps like Groupon, Honey, and Rakuten can automatically cross-check items in your cart against a database of deals. You can also typically find coupons for brick-and-mortar stores via your local weekly newspaper (yes, they still exist – for now, anyway) or any particular shop’s flyer.

Remember to be smart in how you use the money you save with these coupons. Don’t say “oh I’m saving $3 here so I have an extra $3 to spend!” Chances are, you’ll end up spending $5 instead, which completely defeats the purpose.

Make the purchase you originally planned – then keep the money you saved courtesy of your coupon for yourself.

14. Become a better negotiator

Many people go through life without ever negotiating anything financially. It’s the path of least resistance, especially if you don’t like confrontation. It’s also an easy way to routinely overpay for things, though.

If you’re looking to save money on a low income, it’s imperative that you recognize when transactions are up for negotiation. The salary included in your job offer? There may be some wiggle room. The same goes for rent, car insurance, many contractor services, utility bills, jewelry – the list goes on.

If you’re naturally shy or anxious, practice your negotiation skills in low-risk situations that afford you a decent amount of leverage – like your telecommunications bill, for example (see the third point).

Once you’ve got a few small victories under your belt, you’ll have the confidence to step it up. It’s actually quite fun once you get the hang of it!

I recommend reading a few books on persuasion to learn some useful tricks. Pre-Suasion and Influence by Robert Cialdini are two classics that will help you give salesmen a taste of their own medicine.

15. List unused items on eBay

You’d be surprised at what people are willing to buy on eBay. I’ve sold broken watches, barely-functional laptops, old cellphones, cheap guitars in desperate need of repair, and a whole host of other things I’d consider junk.

This can be a great source of money if you’re ever running low for the month. Just make sure you describe your items accurately; otherwise, people will complain. Additionally, if you’re selling something ultra-cheap, make sure you charge enough for shipping or you’ll actually end up losing money.

16. Turn subscriptions into one-offs whenever possible

Subscriptions can be deceptive. You might not actually be saving money if the recurring fee exceeds what you’d otherwise pay based on your usage.

Say, for example, you use Amazon Prime for the super-fast shipping. You’re getting a great deal if you do lots of shopping; next-day delivery for a single package without Prime would likely cost you more than the membership fee.

However, you may be overspending if you only shop on Amazon once every few months.

For example, I place three to four Amazon orders per year. Next-day shipping in Toronto typically costs me about $10-$13 per package for a total of $30-$39 annually. Prime, by comparison, would cost me $95.88 before tax. I don’t care about the other features that come with Amazon Prime so it’s not worth me paying more than double the cost of occasional next-day shipping.

The bottom line is that you should be very careful about subscriptions, only signing up for ones you really need. For everything else, sticking to one-off purchases affords you greater control and can help you save money faster on a low income.

17. Don’t believe dogma – do the math for yourself

You should never take generic financial advice without crunching the numbers to see if they make sense for you.

For example, everyone says you should never, ever buy a new car because they lose too much value the second you drive off the lot. I’ve been hearing this advice since I was in elementary school.

So imagine my surprise when I recently started looking for a car and realized the choice is not so clear cut if you’re financing.

Annual interest rates for new cars are typically at or near 0%. A used vehicle, meanwhile, can cost you in the ballpark of 7% annually. You also have to think about maintenance, which may be more intensive on a used car Additionally, dealers often offer incentives on new vehicles in the form of extended warranties that can reduce the cost of ownership.

Once I did the math, I found that certain vehicles like the Toyota Corolla are actually a better deal new than used based on my needs, which are to have a reliable, long-term, later-year vehicle with adequate technology and a decent warranty.

Others may disagree – and that’s fine. The whole point of this tip is that you shouldn’t let someone else’s beliefs dictate your financial decisions. Do the math for yourself.

18. Make more money

Knowing how to save money fast on a low income is great. Eventually, though, you may want to accelerate your savings, which will require more cash.

Some people like to increase their income by freelancing or starting a side business. This is great since you can take on work as you please, which isn’t possible with a formal second job.

If you’re not the entrepreneurial type, though, you may prefer simply moving into a better full-time role. You can take free or cheap online courses in things like software development (I recommend The Odin Project, which I’m currently doing) and have a completely new job within a year.

Digital marketing is another in-demand role you can pick up fairly quickly if you have the aptitude and willingness to learn.

If neither of these interest you, check out this article for a list of well-paying, reliable jobs, a few of which you can qualify for within just a few short years of training.

You should keep aiming to save money fast on a low income while you train. You’ll develop good habits that will only benefit you once you’re making more.

How to save money fast on a low income (conclusion)

I hope these tips will help you in your quest to save money fast on a low income. While it can certainly be a challenge, it’s by no means impossible. In fact, once you develop good habits, you may find yourself saving more efficiently than people earning higher amounts.

After all, at the end of the day, it’s not necessarily about how much you earn but rather about how much you keep.

If you’re ready to start saving, why not start with $10,000? Check out this article for some tips on setting that much money aside over the next 12 months.

About the author

Brandon-Richard Austin

Brandon-Richard Austin is the founder of Rinkydoo Finance. He is an avid investor and digital marketer for startups and publicly-traded companies alike.