Saving money on a tight budget can be tricky, but with a good mindset and some self-control, living off a small income can still allow you to save for a rainy day!

Here are some “living on a low income” tips that can help you create a practical and achievable budget blueprint.

Track finances

The fundamentals of budgeting are about keeping track of all financial transactions and evaluating them. 

With a view that you already know how much money comes in, the next step is to understand how much money leaves your wallet, where it goes and if the transactions are worth their value.

Collect bills and receipts to list down recurring expenses to determine if your money is spent on basic necessities or on “advertised” needs. Evaluate your lifestyle and find a way to eliminate indulgences, such as in your groceries or meals.

For starters, you can make a grocery list of strictly essential goods so you can avoid unnecessary purchases. You can also start cooking at home and packing meals instead of relying on takeaways and eating out.

In tracking your expenses, make sure that you stay objective when assessing the worth of your purchases. If you will simply consider everything as a necessary expense without proper consideration, nothing will change.

Think about it: is it better to buy organic food items at the nearby grocery or does the local farmers market a few blocks away have them at a cheaper price? The latter being the smarter option, you can take being frugal a little further and simply walk or jog to the market, as taking a short ride would be a waste of money.

It’s fair to say that some conveniences are worth the price, but a person trying to save money may find that accepting some slight inconveniences can also go a long way.

There's several ways you may start tracking expenses; a simple notebook, spreadsheet or a mobile application for budget and expense tracking are just some of the ways, while there are many free mobile applications, both for iOS and Android devices, that can do the job.

Eliminate debts

Having debt, especially of the high-interest sort, is a huge roadblock to a savings goal. It’s necessary to eliminate all debts as soon as possible and to avoid adding to current debts so your finances don’t get messy.

If you need help with paying bills, consider calling your lender to ask about hardship programs. The lender should be able to help you work out a payment plan – some even remove interest payments for a set length of time to help their customers pay their debts.

If you need help purchasing essential goods and services, you may seek out financial support from the government through Centrelink, either as an income support payment or a no-interest loan.

The Department of Human Services also offers a free Financial Information Service (FIS) where people struggling with their finances can get in touch with experts who can help them create a workable financial plan.

Live below your means

One key part to be strict about is keeping expenses below income. That is, you need to live within your means in order to free up enough money for savings.

A good strategy is to limit spending to a weekly or daily allowance that already takes transportation and other necessary costs into consideration. If you still find yourself exceeding this allowance, consider decreasing expenses through the following:

Get creative
If you cannot avoid buying certain items, think of ways to purchase them at a lower cost.

Look for second-hand electronic devices that are still in good working condition, or shop at thrift stores or flea markets for other items needed at home.

Some online shops also offer huge discounts on products that can be purchased at the nearest shopping centre. Amazon, Gumtree and eBay can offer items that were used only once at a huge discount.

Try to fix broken items first or have them repaired at service centres instead of throwing them right away. Many skilled people post videos on YouTube teaching others how to fix virtually anything — from small scratches on cars to damaged iPhone screens.

Broken or old items may also be repurposed. The internet is a treasure trove of ideas for repurposing items and do-it-yourself guides. Who knows, you may even enjoy having new-found skills and turn it into a money-making hobby.

Find money-making opportunities
If your low income is making it hard to live within your means, then it’s time to find extra work. Look for a part-time job that makes use of your other competencies — babysitting, walking a dog, sealing a minor leak. It doesn’t have to be in the same line of work you’re in. If you happen to have software or internet skills, you can also venture online and offer computing or design services; there are job sites that pay per hour or project.

Used to collect or hoard stuff? Sell them at your (or a friend’s) garage or online for extra cash.

You may also join free activities to meet new people — expanding one’s network can sometimes open up new opportunities.

Seek help
Professional help to get finances in order doesn’t always cost money. Get in touch with not-for-profit organisations that offer free advising from financial professionals. Search the internet for experts doing pro bono work in your area.

Take it one step at a time

Budgeting and saving money on a low income may seem impossible, but having less money doesn’t have to be a limitation. In fact, this scarcity might be what you just need to awaken your creativity or turn to other means so you can start saving. 

Remember: It takes time, and plenty of effort and determination, to grow savings enough to fund a life goal or an important purchase. It may not be easy – nothing worth doing ever is – but you will get there, even with tiny steps, as long as you remain consistent.

Explore Nest Egg for more ideas on budgeting and saving.