How I Saved Over $2000 On A Low Income In One Year

Saving on low income is no easy task. Pretty much all of your money is already covering some need after all.

I have been able to save over $2000 every year since 2019 despite being on maternity leave for half of it and working only part-time (1-2 days) since my first maternity leave.

I was able to use this money to pay off my consumer debt and start an emergency fund.

At the end of 2018 I was looking for ways to save more money. I read social media posts on how to save money and most of them were along the lines of:

• Minimise eating out
• Make your lunch at home
• Don’t buy xyz

But what to do when you never ate out, always packed your lunch, didn’t go out for coffees and didn’t buy anything you absolutely didn’t need and still had hard time saving anything?

How I started saving on low income

I was racking my brain on how to save some extra money get rid of debt faster and run into Canna Campbell’s (aka Sugarmamma) $1000 Project. (She has written a book about it, you can read my review of it in here.)

It gave me an idea of opening a new savings account where I specifically transferred money to, for the purpose of saving little parcels to go towards bigger goals.

I set my target parcel size to $250. When I had saved $250 on this account, I would transfer it towards the bigger goal (first it was paying off debt, then emergency fund).

$250 because it felt like a challenge but still attainable. I didn’t want to lose motivation!

This new account was for money saved by other means than regular transfers from my wages. Here are the ways that I kept building my $250 parcels:

Selling things on Facebook Marketplace and TradeMe

I set out on a mission to do a declutter (going through my things to see what I no longer needed) and listed a lot of items on TradeMe first, then Facebook Marketplace.

I put more valuable items and which I didn’t mind posting on TradeMe and things I wanted gone that were also bulky on Facebook Marketplace.

Once an item sold I would take the possible postage fees and TradeMe fees off of the sale price and transfer the rest to my $250-project account. If I get paid cash I use Smart ATMs to deposit the money to the account.

This was very satisfying, especially to begin with when there was a lot of accumulated items to sell. Overtime it became harder to find items to sell, or they would only be worth a small amount.

I still regularly go through what I own to see if I should sell it or keep it. But this is an easy way to start making some money wins even on low income!

Money windfalls

Money windfalls are sudden extra amounts of money you receive.

Examples could be a refund for something you purchased but didn’t want to keep, a money gift, tax refunds, donation tax credits, or anything really you’re not relying on to manage your finances.

When I receive any extra money I put it straight into my $250-project account, either an immediate money transfer or cash deposit as soon as possible.

The point of this is to not let these sudden amounts of money to disappear into mindless spending, but use them more intentionally towards your goals.

When I started I really didn’t think there would be much of these windfalls, but there actually has been!

I don’t know if I’ve managed to manifest these extra amounts of money or just being more aware of them has showed me the opportunities I’ve had.

Savings technique called “cleaning the accounts”

I ran into this savings technique called “cleaning the accounts” on Instagram when a personal finance account shared that they use it.

It simply means that after transactions you round the account balance down to nearest (often) $5 or $10 and transfer the spare change to the savings account.

For example, your account balance is $45, you buy a lolly bag for $2, leaving $43 on your account. Rounding it down to next even $5, you transfer $3 to your savings account leaving the balance at $40.

It’s the same as if you were using cash and putting your small change into a piggy bank, but on your bank account.

I love using this technique. I don’t think I’ll ever stop.

It is such a simple way to constantly save a little bit and let the small amounts accumulate and go towards the bigger goals rather than disappearing.

How much I have been saving on low income since 2019

Using these techniques I’ve managed to save 31 parcels of $250 since January 2019.

That is $7750 saved on a low income!

This money has made a significant difference when it came to paying off debt, starting an emergency fund, creating sinking funds and funding other bigger expenses.

And all of that made practically no impact in my ability to meet all my expenses regularly.

So, if I can do it, I’m sure so could you!

What is your favourite way of saving money? I’d love to hear in the comments!