When you don't have a lot of money to begin with, saving money may seem like quite a challenge. Saving money on a low income means you may have to make difficult decisions about where you spend your money. However, not all budgeting decisions result in totally cutting out expenses. Sometimes, it's about adjusting spending levels for existing expense items.
Make a monthly budget. Without a budget, you cannot track how much or how little you are spending. The budget should include all of your income and expenses for the month. Determine which expenses cannot be avoided, such as mortgage payments, and which can be decreased or eliminated.
Cut expenses wherever possible. Examine where you spend money, and make changes to your spending habits based on priorities. Some modification may be obvious. For example, if you don't have enough money to pay your utility bill, but you spend money dining out, you should reconsider eating out so often. Pay down debts that incur interest, such as credit cards. Paying down the balance on such debt will decrease the total amount you pay. Make cuts to entertainment expenses. This money can be used to pay your necessary bills or it can be put into your savings. Save utility or gasoline costs whenever possible by conserving energy or reducing the use of your automobile.
Increase insurance deductibles. If you can't remember the last time you filed an insurance claim, you may consider increasing the deductible on your homeowner's, auto and health insurance. Increasing your deductibles reduces your monthly premium, thus saving you money. This money you save should be set aside and invested. However, if you do need to file an insurance claim, your out-of-pocket costs will be higher if your increase your deductible, so you must weigh the risks. Shop around for better rates on homeowner's insurance, car insurance or health insurance.
Refinance your home if interest rates favor this move. Also, if you've paid off a significant portion of your original mortgage loan, refinancing would result in a lower total loan amount. Thus, your payments would be significantly lower. The money you save could be used for any purpose. Consider the closing costs associated with refinancing before pursuing a refinance.
Clip grocer coupons for items you use frequently. Some manufacturers use double coupons. You could save money just buying items you would buy anyway.