In present day Nigeria, with inflation at an all time high and the Naira falling, its almost difficult to save efficiently. Notice we said “difficult” and not impossible. Truth is we are currently spending more and for many young adults, your salary may not cover these expenses and when it does, it may leave you with very little left to save.
While saving on a low salary may seem like an impossible task, it is however feasible with proper planning and execution. In this article, we’ll discuss five practical strategies to help you save money on a low income.
How to Save on A Low Income
- Have a Realistic Budget
Behind every effective saving plan is a realistic, well-structured budget. To help you start saving smartly, you need to first track your monthly expenses to know what you spend on. Next, it’s time to categorise these expenses into fixed (rent & utilities) and variables (groceries & entertainment).
With your expenses properly categorised, you now know what matters most & what expenses you can afford to cut out. Using this information you can then create a realistic budget prioritising your expenses and allocating a part of it to savings. If you need help creating a budget, here’s a step-by-step guide to follow:
- Identify all your income sources,
- Track your monthly expenses.
- Categorise these expenses into fixed and variable.
- Set spending limits for each category.
- Allocate a portion of your income to savings, no matter how small.
2. Cut Out Unnecessary Expenses
With your spending habits now identified, it becomes easier to identify areas you can cut back on. Now you should note that this may involve making small sacrifices. You may no longer be able to afford your favourite snacks, or booking a wellness retreat as often as you can. If you need help identifying areas where you can cut your expenses, here are some ideas on areas to cut expenses:
- Eating out and ordering takeout
- Subscription services you never use.
- Transportation costs by switching out ubers for public transit or carpooling etc.
3. Prioritise Saving
You need to consider your savings like a fixed expense, one that you can;t afford to miss similar to paying your light bill or rent. Consider using Raven target savings to automatically transfer funds into a savings plan daily, weekly or monthly.
Saving Strategies:
- Open a separate savings account to avoid spending the money using Raven Target or Fixed Savings.
- Automate transfers to ensure consistency.
- Start with a small, manageable amount and consider increase it gradually.
4. Take Advantage of Discounts and Deals
Now cutting down your expenses doesn’t mean reducing your quality of life, its rather stretching each Naira a little. Consider discounts, deals, bulk buying offers as a way to reduce your expenses and increase your savings. Automate savings on every purchase you make with Raven Spend x Save, this way, you’re constantly saving everytime you make a payment.
Ways to Save on Purchases:
- Shop during sales and clearance events.
- Buy in bulk for items you use regularly.
5. Diversify Your income
While saving on a low salary is challenging, diversifying your income is one way to increase your wealth. Consider taking on a side gig, freelance work, or starting a small business.
Ideas for Diversifying Your Income:
- Freelance writing, graphic design, or other skills.
- Learning a trade and starting a small business.
Saving money on a low salary requires diligence, creativity, and sometimes a shift in mindset. By budgeting carefully, cutting unnecessary expenses, and seeking ways to increase your income, you can build a financial cushion even with limited resources. Remember, the key is consistency and making significant effort no matter how small builds up in the long run.
