The best ways to save money when you’re low on funds

Saving can be difficult at the best of times. Learn how to transform your spending patterns, even on a tight budget.

Are you struggling to save? Putting money aside when you’re broke might sound impossible, but you can start saving even when things are tight. Here’s how:

Create good spending habits

Practising mindful spending is one of the best ways to learn good patterns when you’re short on money.

Mindful spending involves setting clear goals for yourself and keeping them in mind when you go to make a purchase.

Put things into perspective – will spending this money help me reach my goal this month?

Another way to create good spending habits is to avoid your spending triggers. If you know you’re easily swayed by your favourite brand’s marketing emails, consider unsubscribing from their mailing list.

Or if you get a bit too generous on a night out, only bring enough cash for yourself and leave your card at home to avoid overspending.

Creating good financial habits means working out if your money is being spent wisely. Do your research and shop around for the best deals.

Pay yourself first

One of the best ways to save when you’re low on funds is to pay yourself first.

This means putting a portion of your salary in your savings account as soon as you get paid so you can hit your savings goals and remove the temptation to spend it on anything else.

The act of paying yourself first means that you’re assigning your future self a portion of your current income, and that’s important when you have big saving goals in mind. Aim to automate the process to avoid forgetting and think about it like paying a bill. Your future you will thank you!

Make a budget

One of the most simple ways to save money when you’re broke is to budget. You can make a budget by tracking your spending and seeing where you can make changes to save money.

Where in your budget could you spend a little less? Could you change energy providers to save some money? Could you shop at a cheaper supermarket? Could you walk or get public transport rather than a taxi? And are you really making the most of that gym membership?

Identify any costs that can be cut, maybe even try a spending freeze of having a month of only paying for essentials.

Using cash to help you budget

One of the best ways to save when funds are limited is to withdraw a set amount of cash per week or month to live off.

Being able to visually see the money you are spending helps you to stick to a strict budget and makes you more mindful of the money you do spend.

This doesn’t have to be a long term habit, just try it for a couple of weeks or whenever you want to practise sticking to a budget.

Saving vs paying off debts

The question people often ask when they’re on a tight budget is whether they should be putting money away into savings or trying to pay off debts first.

This depends on the personal circumstances, but often the best thing to consider is how much interest you’re paying on your current debts.

If you’re paying a higher rate of interest on your debt than you are earning in savings, it could be better to pay off the debt, as not paying them will only increase the amount you owe and cost you more in the long run.

However, it is always a good idea to ensure you have access to some savings, in case something unexpected happens, like the washing machine breaking, or a costly car problem.

For debts where you’re paying little to no interest, work out a way to find a balance so that you’re both saving and paying off debt at the same time.

Wherever you find a way to save money, remember that every little bit matters. Start small and go from there. Good luck!

Remember, your investments can go up and down and you could end up with less than you started with. Past performance does not guarantee future results. The information provided is financial guidance and should not be considered financial advice.