Facing a financial dilemma? We are here to help.
Every month, we’ll answer questions from you, our readers, to help you get a better understanding of your finances.
Got a question? Send it to us at hello@clevergirlfinance.com or leave it as a comment below!
Today's question is from “Casey 28”:
What advice would you give to someone who has a low income struggling to save for emergencies?
Saving for emergencies can be difficult on a low income, but don't worry—there are ways to achieve this goal.
Here are some simple steps you can take to help you reach your financial goals.
1. Create a budget that is right for you
Budgets are for everyone, no matter how much you’re earning. They help you to know how much money is coming in and going out.
You can start with a simple budget that tracks your expenses, income, and spending. This way, you can see if you are overspending in some areas, paying for things you don’t use, and have a better sense of managing your money.
One of the biggest ways budgeting has helped me is by giving me more control and awareness over my money. Before, I didn’t think spending $5 here and there was costing all that much. But of course, small amounts add up, and before I knew it, I was spending too much on unnecessary things.
Having a budget allows me to make the adjustments I need to focus on saving money.
A budget gives you a place for your money and helps you build better money habits—this way, when your income increases, you’ll know exactly how to use it wisely.
2. Set a small yet achievable goal
With a low income, it’s best to start small. Consider how much money you can realistically put aside for savings every month. Even $5 or $10 can add up.
With whatever amount of money you can set aside, create a goal around that amount. For instance, if you can set aside $5 a week, then make a monthly goal to save $20 a month. In 12 months, that’s $240, which can come in handy.
A money jar is also helpful for saving small amounts at a time. Using a transparent jar to store your money can help you stay motivated because you can see your money constantly growing.
3. Automate your savings
Let’s be honest. Saving money can take emotional and mental energy. Instead of having to remind yourself every month to save or second-guess yourself about how much you should be saving, the simplest thing to do is automate your savings.
Check with your bank to see if you can set up automatic transfers from your paycheck or checking account. Automating parts of your finances makes life that much easier.
4. Evaluate and reduce your expenses
Sometimes, our salaries don’t match our current lifestyle. Have you considered going over and minimizing your expenses? While this might sound like you’re cutting out all the fun in your life, it’s more about eliminating the costs that don’t align with your values.
Start by looking at your large expenses, such as rent and car expenses. Are there any ways you can lower those costs? For instance, with housing, is it possible for you to downsize and move into a more affordable apartment? Is having roommates an option for you?
With your car expenses, consider:
Switching to a more affordable car insurance
Carpooling or taking public transportation to work to reduce fuel costs
And if you are handy and it interest you, you could even learn how to perform typical car maintenance such as oil changes, cleaning air filters, etc!
When it comes to food costs, consider the way you shop. Perhaps you can buy more store-brand products since they are less costly and are often the same quality as name-brand products.
You can look into downloading store and coupon apps to receive discounts.
Remember, in any area where you cut costs, you can put that money toward your savings.
5. Find alternative forms of entertainment
Being financially responsible doesn’t mean killing your social life. However, if you find that you’re spending quite a bit of money on entertainment, consider changing things up.
Instead of going to the movies Friday night, try a matinee movie
Host pot-luck dinner parties instead of going out to eat
Try home workouts instead of a gym membership
Practice cooking with your significant other instead of an expensive night out
Look for free museums to explore instead of going to bars
By participating in free entertainment, you can cut your entertainment expenses in half and put money towards your savings goals.
6. Use local resources
As you know, there’s no shame in asking for help. If you have a low income, there are usually resources in your community that can support you with saving money on groceries, discounts on public transportation, and other services.
Some websites you can use include:
Utilizing these resources can make a dollar go further and put more money toward your savings.


7. Save your extra cash
Extra cash often comes into our lives, whether a tax refund, a bonus, or Christmas money. With this additional money, you can jump-start your savings.
There are also apps that will roll over your spare change into your savings account every time you spend money. With a little research in your app store, you can decide on which one will work best for you.
8. Put your money in a high-yield savings account
Did you know that you can make money by saving money? With a high-yield savings account, you can earn interest on the money you save.
Using a savings calculator, let’s say you open an account and put $100 in. If your account has an interest rate of 3%, you’ll earn an extra $19.41 a month.
If you can constantly save $100 monthly for a year, you could earn in total $1319.41 versus $1200 if your money is in a savings account with little to no interest.
I don’t know about you but I’ll take any extra money I can earn because it all adds up!
9. Try cutting back on wants for a short time
Sometimes, saving takes a little discipline. If only for a month or two, consider spending only on what you need and saving the rest. Remember, you don’t have to do this forever, just long enough to jump-start your savings.
10. Increase your income
With some extra cash coming in, it can be easier to save money. Consider some simple side hustles you can do to help you increase your income. Some ideas include:
Selling items you don’t use
Asking for a raise
Dog walking
Babysitting
Freelancing
Doing odd end jobs on TaskRabbit
10. Eliminate debt
Saving money and eliminating debt on a low income may seem unattainable. However, focusing on eliminating debt as soon as possible will make things much easier for your future self. And yes, it’s possible to eliminate debt and save money.
First, avoid adding to your debt by stopping or minimizing your use of credit cards. Second, make sure you have a debt reduction plan. This can involve paying more than the minimum balance, consolidating your debt, or contributing any extra money you earn to your debt.
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Focus on slowly and consistently saving
In the beginning, saving money may feel overwhelming. Yet, what is most important is consistently saving what you can.
Creating a habit around saving will help you create more financial security further down the road.
Having money is helpful in an emergency, but it’s not the only option. When experiencing difficulties, reach out to your friends and family for support. For example, if your car breaks down, do you know someone who can drive you to work? Do you have medical insurance to cover illnesses?
Having extra support while you build your emergency savings can help alleviate some of the pressure.
We hope these tips help you start your emergency savings. If you need more ideas on saving money, you can check out a free course on savings challenges.