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It can often be a challenge to manage money on a low income. You have to be organised, on top of everything and prepared to handle emergencies as they arise. That’s why we have put together 5 of our best tips and strategies that make it a little easier to make ends meet.
How to manage money on a low income: 5 top tips
Tip #1: Think about downsizing
Whether you rent or own a home, if you could downsize to a smaller, cheaper property, you could save yourself money month-on-month not just from the decreased rent/mortgage payments, but from cheaper bills too. According to news reports, Londoners now spend up to 50% of their income on rent. And if you can downsize to somewhere closer to work so that you can walk or cycle (rather than pay for public transport or drive) then that’s even better, and even more money in your pocket at the end of the month.
Tip #2: Meal plan and order your weekly shop online
We know what you’re thinking: shopping online to save money? Doesn’t sound like much of a tip! It sounds counterintuitive, we know. But shopping online helps you avoid some of the tempting offers they put around the shop to drive your bill up and makes you just stick to buying what you need. It also lets you see your total as you add things to the basket, which helps you stay mindful of how much you’re spending and stick to your budget.
So, where does meal planning come into this?
Well, shopping online is great. But when you pair it with meal planning, you can save even more. Meal planning lets you plan meals for the week that share ingredients and make the most of your grocery budget. It also lets you know exactly what you need to buy so you’re not adding things to the basket hoping you can use them this week. This means that you can cut down on food waste as well.
If you’d like to find out more, here’s a fantastic article on how to eat well for £20 a week, complete with tips and recipes!
Tip #3: Withdraw cash
A recent study found that spending cold hard cash feels uniquely painful to humans, so we tend to spend more conservatively, questioning whether we really need items and thinking more carefully about the things we’re spending on.
Using cards — especially with contactless — has the opposite effect, psychologically, where we don’t immediately equate the card with money we have, so we tend to overspend. It’s the same reason you spend more on holiday too.
So, try this at home; withdraw the cash you need at the beginning of each week and see how it can help you manage your money better, even on a low income.
Tip #4: Budget and get frugal
There’s a good reason we write a lot about budgeting on our blog: it can really help if you’re wondering how to manage money on a low income. Budgeting doesn’t just help you know what’s coming into your account, but it can also help you anticipate when things are going out so you can work out how much you can afford to spend on things like groceries, recreation or travel.
It also helps you spot where you could cut back on your spending. Are you spending too much on travel? Maybe there’s a way you could walk some of the journey. Spending too much on your phone? Perhaps you can downgrade to a cheaper package.
What about your energy bills? According to the Money Advice Service, based on research from Santander, UK households spend an average of £3,329 per year, on their water, energy, council tax, electricity and broadband bills. For starters, according to Which? you can easily save £169 by switching to a cheaper energy provider. They’ve also got lots of other fantastic money saving tips in this article.
Tip #5: Get all the help you can
When you’re working out how to manage money on a low income, it’s easy to forget about the benefits and extra help you might be entitled to. Turn2us are a national charity that help you discover whether you’re claiming everything you’re entitled to, as well as providing helpful advice on how to manage money on a low income.
Their benefits calculator is a great place to start. Just enter details about your situation and it’ll calculate whether you’re eligible for a helping hand.
If you’re struggling to make ends meet on a low income, Citizens Advice have lots of of great advice and can offer assistance getting you the support you need to manage.
- Author The Bamboo Team
- Posted 12 August 2019