It is difficult to survive from paycheck to paycheck. It is even harder to save money or build savings with limited income. But with some creativity, self-discipline, and a well-timed personal loan application, anything is possible, even with on a low income. Here are five smart ways for you to do this:
1.Prioritise High-Interest Debt
- Having a low income makes you a high-risk borrower, which means you will be penalised with a higher interest rate when you apply for loans. Avoid resorting to loans for any kind of expense to avoid being weighed down by high-interest rates.
- Whether it is from a personal loan application or credit card debt, it is almost impossible to get any kind of momentum while paying off high interest. It is important to settle these debts first for any plan of saving money to materialise. You may have to invest in a consultation with a financial expert or look into online budgeting tools to come up with a budget plan to make this possible.
2.Cut Back on Big Expenses
Housing usually takes up the lion’s share of your monthly budget, whether it is for monthly amortisation or rent.
- If a homeowner, explore scenarios for refinancing your housing loan for a lower monthly payment, keeping in mind that doing so means you will have to pay longer. Again, you may want to consult professional advice before doing this. You could also try renting out a room or the garage for additional income.
- If you are renting, look for a cheaper or smaller apartment.
If, however, the need for a large sum of money suddenly arises, like hospital bills, personal loans will be your greatest life-saver.
If a car loan is among your biggest monthly expenses, try downgrading to an older model, but make sure that it is reliable and would not cost you more in repairs down the road
Also Read: Grow Your Wealth: 7 Investment Tips for Beginners
3.Simple Life, Happy Life
To gain some traction in saving money, you may have to cut back on expenses across the board; this means fewer entertainment expenses like cable subscriptions and dining out. Also, resist the temptation of buying unnecessary items like clothes or shoes that you do not need. Another way is to cut back on your grocery by making a menu plan beforehand. Your budget will be lean, and so will you.
One good habit to practice is setting a hard limit on non-essential expenses. Start by switching to cash so you can keep track of how much money is still available for spending.
4.Start a Side Hustle
Do not cancel your internet subscription just yet to save on monthly expenses. There are ways to make extra money from online jobs at no additional cost. Make use of other skills and interests that you never thought of pursuing by being a freelance writer, data encoder, graphic designer, or virtual assistant, to name a few. You can do this at your own pace and right in the comfort of your own home.
If you ever plan on becoming a future business owner, remember to plan accordingly and keep your credit score high so that you can apply for a loan in the future; this is one of the best purposes of a personal loan application.
Saving money is a challenge for above-average earners, more so if you have low income. But if you keep in mind that every bit counts and start thinking of small and big ways to save money, you are one step closer to financial independence.
Also Read: Comprehensive Guide to Opening a Business When You Have No Money