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From Frugal to Financial Freedom: How to Excel in Low-Income Saving Challenges

  • Post author:Bob Haegele
  • Post last modified:February 11, 2024
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Completing a money-saving challenge can be a great way to increase your savings while learning important financial lessons. Perhaps they can even be a bit of fun!

But if you have a low income, you might think money-saving challenges aren’t for you. However, we’re going to cover money-saving challenges you can complete even on a low income.

To be clear, it may not be easy to save money when you don’t make a lot. But that doesn’t mean it isn’t possible!

You may have to get a little more creative with money-saving challenges if you don’t have much money, but it’s totally doable. Here’s how to complete a money-saving challenge on a low income.

Understand Your Finances

To complete a money-saving challenge on a low income, you must first understand your finances. This includes knowing your income, analyzing your expenses, and setting financial goals.

For instance, if you make $30,000 per year, you may have difficulty completing my six-month money-saving challenge. In this case, you likely need to set smaller savings goals or increase your income first.

You should also analyze your expenses so you know exactly how much you are spending every week/month/year. Perhaps more importantly, you should have an understanding of what you are spending your money on.

This will give you an idea of how much money you have left over and where you can possibly make cuts in order to meet your savings goals.

On that note, you must understand your savings goals. This includes not only how much you want to save this week/month/year but what the purpose of that saving is.

For instance, are you saving for retirement? Saving for a trip? Saving for an emergency fund? This will help you know how much you need to save and how quickly you need to save.

Set Realistic Goals

If you are working on a money-saving challenge on a low income, it’s also important to set realistic goals. If you have a low income, you probably can’t save $500 a week.

However, setting realistic savings goals can be an effective step in helping you manage your finances.

First, address short-term financial goals, like building an emergency fund, paying off credit card debt, or taking a vacation. You must have these in order before you can complete a money-saving challenge for low income.

Then, set mid- and long-term financial goals, such as saving for a down payment on a home, buying a car, or funding your child’s 529 plan.

While your goals should be realistic, they should also be achievable. If you have a low income, you need to be sure your money-saving challenges are achievable.

As mentioned, you may need to reduce your expenses or increase your income, or you can rein in your goals.

Create a Budget

One of the most important parts of completing a money-saving challenge is creating a budget, especially if you have a low income. In this situation, it’s especially important to track your expenses so you don’t waste money on unnecessary expenses.

Popular budgeting methods like the 50/30/20 method already have savings built in. That’s 50% savings, 30% wants, and 20% savings. But you can adjust the percentages based on your situation.

You can also use a finance tracking like Empower (formerly known as Personal Capital) to track your expenses. Some banks have this functionality with their online banking, too.

Chances are, you’ll need to cut expenses in the wants category. This might include things like subscriptions, eating out, and entertainment.

Try to keep some of your wants budget as you don’t want to burn out. But cutting in that area somewhat will leave you with more money to use on your money-saving challenges.

Increase Your Income

If you’ve made it this far and you still can’t save enough to meet your money-saving challenge, you may need to increase your income. There are many ways you can do this, including work-from-home jobs and jobs that pay cash daily.

In addition, pursuing multiple income streams by investing in real estate and stocks or learning how to become a freelance writer can help.

In some cases, you might be able to increase your income where you already work, either with a promotion or by switching to a different job. Training and certifications can be helpful when you want to increase your income where you already work.

Finally, depending on your situation, you can look into government assistance programs. These might include unemployment assistance, EBT, or housing assistance. While you might not think of these as income, they can provide significant relief in keeping up with your expenses.

If you are struggling to keep up, see if you might qualify for one of these programs.

Best Money-Saving Challenges for Low Income

There are several types of money-saving challenges you can complete even if you have a low income. Here are some to try:

  1. No-spend challenge: With this money-saving challenge, you pick a certain amount of time to not spend money, typically in one or more areas. For instance, you might decide not to get coffee at a coffee shop for 30 days and make it at home instead.
  2. Envelope challenge: This challenge requires you to put money into different envelopes to match different categories, such as dining out, entertainment, and travel. You can only spend the amount in each envelope for the month. If you want to spend more, you must “borrow” from other envelopes.
  3. Panty and freezer challenge: You only cook meals using whatever you have in the freezer or pantry for a certain period. This can not only save money but also help cut back on food waste since you only use things that keep longer.
  4. Round-up challenge: Round up every purchase to the nearest dollar amount. The rest of the money can be invested or put into a savings account. Some apps can do this automatically.
  5. No eating out challenge: With this challenge, you don’t eat out all for a certain period, such as two weeks. Challenge yourself to go as long as you can.
  6. Cash-only challenge: Only spend with cash for a certain period instead of using credit cards. This will challenge you to spend only as much money as you have.
  7. Couponing challenge: Learn how to coupon effectively and aim to save a certain amount over the course of the month.
  8. No clothes shopping challenge: Avoid buying new clothes for a specific period. Instead of buying new, you can repair the clothes you already have.
  9. One-month entertainment challenge: Pick a certain period to eliminate certain forms of entertainment, such as streaming services or going to the movies.

While there are many types of money-saving challenges, these are some of the best to complete on a low income. That’s because most of them focus on limiting expenses.

Strategies for Money-Saving Challenges on a Low Income

Even if you have a low income, you can still complete a money-saving challenge. You can generally do this by increasing your income and reducing your expenses.

Meal Planning and Cooking at Home

Whether you enjoy eating at fancy restaurants or just the occasional trip to a place like Panera, eating out can really add up. It’s better to cook at home if you want to save money on a low income.

If you have a 9-5 job, meal planning can be a great way to save money rather than going to restaurants for lunch every day.

In terms of cooking at home, decide how many meals you want to cook at home each week. Even if it’s just a few per week at first, that’s a great first step. As you find recipes you like, you can make small tweaks to create different meals.

Buying in bulk can also help. Eventually, you can increase the number of meals you cook at home, which can help you save a lot.

You can follow a similar process with meal planning. Start by sitting down and plan your meals for the entire week. Think about the things you like to eat, your schedule, and the ingredients you have on hand.

Also, be sure to include every meal you need to prepare in your plan, be it breakfast, lunch or dinner. And don’t forget snacks!

When it comes to meal planning, the simpler, the better.

Couponing and Cashback Apps

No matter what you do, certain expenses will be unavoidable, even when trying to save money on a low income. Couponing and cashback apps can be a great way to save money on those expenses you can’t avoid.

You can find coupons in many forms, including in magazines, newspapers, and online. Websites like Coupons.com, RetailMeKnot, and Rakuten can be a great resource for finding coupons.

Some stores let you stack multiple coupons, which can help you save even more. However, some stores have rules around coupon use, so be aware of those.

In addition, web browsers like Microsoft Edge have built-in shopping extensions that can help you automatically find and apply coupons.

Cash-back apps also help you save money, with the main difference being that you get money back after making a purchase, not before. Cash-back apps like Ibotta, Rakuten, and Honey can help you save money on everyday purchases. Each app can have different features and offers, so find one that works for you.

Completing Surveys

Completing surveys for cash is a simple way to increase your income. As I always say, you aren’t going to get rich taking surveys. Still, some surveys take only a few minutes to complete, and some can pay up to $75 each.

Swagbucks is probably my favorite survey site because it has a wide variety of surveys. Plus, there are other ways you can make money, like watching videos, searching the internet, and even playing free online games.

However, there are many other survey sites you might prefer, like Survey Junkie, MyPoints, and YouGov. I suggest trying several of them and finding one you like. You likely won’t qualify for every survey, either, so it’s good to have several favorite sites in mind.

Use Public Transportation or Carpool

An increasing number of people own their own cars in the U.S., but that may not be necessary, depending on where you live. Some cities have excellent public transportation, allowing you to get just about anywhere without ever putting your foot on the accelerator.

In some cases, public transportation can be even quicker than driving. In others, it can take much longer. Again, it all depends on where you live.

To give you an idea of how long your trip will take by car versus public transportation, try mapping it out on Google Maps. I also like to use Citymapper, though it’s not available in every city.

If public transportation isn’t an option, you can also try carpooling. This is ideal if you have a coworker or coworkers with whom you can drive together.

Carpooling is a great way to save money on transportation. When I was growing up, I used to carpool to high school, which was great since I didn’t have a car.

Carpooling is not only cheaper but is also better for traffic congestion and the environment. It won’t work for everyone, but it’s a great option if you can make it work.

Shop at Thrift Stores

I honestly love thrift stores, as you can often find great stuff for a fraction of its cost when brand new. The best part is that items at thrift stores are often in great condition. In fact, I’ve even found brand-new, unopened items there.

The only thing about thrift stores is you must have an open mind. You won’t always find exactly what you’re looking for. Instead, it’s better to visit the store and keep an eye out for things you need rather than looking for specific things.

For instance, you may not find the clothing item you’re looking for in your size. However, you can always visit another store or come back another time.

After all, you are relying on donations, so availability can be hit-or-miss. Still, having patience can pay off, as thrift stores can save you a lot of money in the long run.

Stay Motivated and Track Your Progress

Finally, it’s important to stay motivated and track your progress. It can take a long time to achieve financial stability and complete a low-income money-saving challenge, so it’s important to stay committed.

To do this, you should establish clear financial goals and break them into smaller pieces if possible. This will make it easier to achieve smaller wins, which will help keep you motivated

You should regularly review your goals and adjust them if needed. For example, if you are trying to save $50 per week and find that difficult, you can try saving $40 per week instead.

Another way to make it easier to stick to your goal is to automate your savings. You can do this by setting up an automatic weekly or monthly transfer to a high-yield savings account. This will make it easier to save, as it happens in the background, and you don’t have to think about it.

If it helps, you can have a “savings buddy” who might be a family or friend in a similar situation. Completing a money-saving challenge for low income can be easier if a family member or friend is doing the same challenge.

Be sure to acknowledge your progress and recognize your wins, even if they’re small. You can also treat yourself with something small when you have those little wins.

You should also continue to learn and make adjustments as you go. Remember that this is a long game, and you must be in it to win it, as they say.

Bottom Line

Completing a money-saving challenge isn’t always easy, especially if you have a low income. Steps like understanding your finances, setting realistic goals, and creating a budget can help you get there.

However, you may ultimately need to increase your income or cut expenses to make it work. Just make sure you stay committed, as the journey to financial success can years, depending on the situation.

Still, if you stick to it, anyone can have success. If you belive you can do it, you are probably right!

money saving challenge low income

Hey there. My name is Bob Haegele and I'm a personal finance writer who has been freelancing since 2018. Since then, I've built a six-figure career as a freelance writer. My work has been featured in Business Insider, Forbes Advisor, TIME.com, USA Today, and many other outlets. Interested in starting a blog of your own? Check out my post on starting a blog.

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