How to Save Money (& Budget) on a Low Income

These are the best budget-saving tips if you want to learn how to save money and budget on a low income or a tight budget.

These are the best budget-saving tips if you want to learn how to save money and start being a Saving Junkie!

Back in college, I would always procrastinate when it came to financial tasks. I’d find some reason or another to put off anything to do with money for another day.

After a while, though, being in that perpetual “broke college student” phase was much too stressful.

So one night I sat down and consciously decided to build upon my money management and budgeting skills, as well as made the decision to implement various ways to save in my everyday life.

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Much to my surprise, I found money management and budgeting was actually very fulfilling, and it soon became a habit I didn’t have to even think about.

After a sufficient amount of research, I learned about smart saving hacks, that were (and still are) relevant to my frugal lifestyle. I think you’ll find this basic advice extremely useful and surprisingly easy to implement.

How to Save Money

Here is a list of money management skills for beginners.

1. Make a Budget

If you didn’t like the video or want to read how to make a budget, read on: 

budgeting for beginners

Budgeting is the key to keeping track of your money. It allows you to always know where your money is going, and avoid those dreadful moments or swiping your debit card only to find you have a less-than-adequate bank balance.

The very first step in making a budget is to monitor your spending. Assigning arbitrary numbers to create a budget is pointless, and ends up causing unnecessary confusion. To track your spending, take note of how much you spend in a given month, including everything from regular expenses such as groceries to more spontaneous spends.

You could use an Excel spreadsheet or even free apps like Personal Capital that automatically keep track of your expenses, should you link your account to it.

Once you have determined your spending patterns, compare your expenses to your income, and note areas where you can cut down spending. Based on this, create a budget for every month with specific categories of expenses and try to stick to it.

It goes without saying: Your spending should be less than your income. Ideally, you should also have budgeted an amount (five to ten percent of your income is good to start with) to be put into your savings. Budgeting apps will even alert you if you exceed your monthly budget, as well as compliment you for meeting your monthly saving goals.

As you start out, your budgets will be very basic; with time, however, you will start adding categories and subcategories, and you will even start budgeting for long-term plans like retirement as your career grows (more on this later). Your number 1 step for better money management would be to set up a budget.

2. Everyday Savings

If you don’t already have a savings account, now is the time to open one! Take a look at the best savings accounts to open one up and start earning more. Over time, the money in your savings account will accumulate and earn interest. As mentioned above, you should be saving a percentage of your monthly income.

This percentage can increase as your income increases. At any given point when you have money left over in your monthly budget over and above this portion, be sure to keep it in your savings account. This way, you’ll see more growth in your account over time, with your money accumulating interest.

For example, Logan Eldridge, Head of Client Happiness at Earnest states that one of seven ways to budget for happiness is saving for four things every month.

Each month, he contributes a portion of his income to these four things: home, retirement, education, and an emergency fund. This is a great practice since it keeps him covered in any situation. He states “I do the act of saving money every month even if the amount saved is different. It’s just become a habit.”

3. Download Budgeting Apps

If you aren’t already using budgeting apps to keep track of you finances and budgeting, you’re doing it all wrong. Here is a list of recommended budgeting apps to use:


Mint is an incredibly popular online personal finance app that’s great for all kinds of users. Aside from it being a great finance app, it has a plethora of money management tools that you can also use. What’s astounding is that the app is free to use and allows users to create financial reports in a matter of minutes.

Some notable features of Mint include:

  • Versatile and flexible budgeting tool
  • The app can send you alerts and financial summaries via text message or email
  • Extra security measure – the app sends out an SMS or email if it notes unusual account activity
  • Account aggregation follows almost all bank-level policies for added security
  • Users can customize their financial reports into easy-to-read bar graphs and pie charts

However, the only downside is that Mint does not have an account reconciliation feature. This may be a letdown for some users but otherwise, the app is great on its own. If you already have Mint but want more features, I would recommend signing up for Personal Capital. In fact, Personal Capital and Mint’s features are quite complementary. Users can also keep a track of their credit score with minimal hassle.

Personal Capital

The financial advisor company, Personal Capital offers several free tools to help users manage their budget and investments. What’s best is that the tool has an easy to navigate dashboard, perfect for beginners trying to save up.

For greater functionality, you take advantage of linking up both your investment and banking accounts. You can link your account manually or connect the account automatically. Since there are many different categories, you can use the tool according to your convenience. What’s best is that the tool will select the best category for you so you don’t have to go through the trouble yourself.

You can use this brilliant online tool to even keep a track of investments or even retirement funds. It’ll do all the calculations so you can keep an eye on your investment costs and asset allocation without a worry. Some key features of this app include:

  • Track expenses down to every credit card swipe
  • Analyze all your expenses in real time on your account dashboard
  • Use the tool to manage your future goals whether you’re planning to buy a house or get yourself a new car
  • Use the Retirement Planner tool
  • Ability to track your net worth

You can learn more in this Personal Capital review to gain insight about the free money management tool.


Want to know the cheapest car insurance provider or the best credit card in town? Look no further than Trim. This exciting solution makes it easy to keep track of your financial life. The good news is that this app makes the right financial decisions and you don’t have to worry about your financial health. Automate savings and find interesting ways to save more money with this genius app backed by AI.


Paribus is an online tool that automatically tracks your purchases to find price drops. The good news is that it is free and you can download the app for both Android and iPhone. Link your Amazon account to Paribus and search for price drops at participating merchants. Since Paribus uses quality encryption to protect data, you don’t have to worry about your purchases made.


Unlike most apps and tools on this list, LearnVest is more advanced and does a lot more than you’d expect. It is better suited for folks with advanced budgeting needs or individuals who want to create their own financial plan. The app requires you to make a little upfront investment so if you’re only looking for free apps, you can move ahead.

But if you’re willing to spend your money wisely, LearnVest provides you access to an advisor. This way, you can have all your questions answered by an expert.


You Need a Budget also known as YNAB is another popular finance app that has its own super cult following. Unlike other complex tools, it features an easy to navigate spreadsheet design. This makes it easier for newbies to create a monthly budget in minutes.

Another great thing about YNAB is that it focuses on your last month’s income instead of your future income. Plus, all your data is represented in easy-to-understand graphs and reports.


As the name indicates, this app will take you down memory lane with the old envelope system but with a modern or digital take.

Thanks to Mevlopes, you can keep a track of spending by linking all your financial accounts in one place. You can also designate future money to “Mvelopes” and assign yourself a budget. As you use your credit card to pay for something, the app moves the spending account to another Mvelope. This way, you’ll be able to keep track of how much you need to pay for your credit card bill.


If you don’t like linking your bank accounts to a third party app or tool, MoneyStrands is the way to go. What’s best is that it works much better than a traditional spreadsheet but with a bunch of cool add-ons.

However, users can link their accounts for greater ease though it is not a requirement. The basic interface looks like a calendar and is easy to manage. Some users have expressed that the app resembles Mint and features a similar interface.


Are you in need of fuss-free budgeting app that will manage your finances on the go? Well, Spendee is a great choice. For minimal hassle, you can link your Spendee account to your bank accounts and keep track of everything. What’s cool is that the app displays multiple currencies plus you can use a shared account with your family.

While the app is free, you can upgrade your account to premium and avail more benefits. Spendee premium is perfect for budget planning if you want to move your start-up or office to a new location. Real-time sync will ensure that your information is available across all devices.

Money Dance

This software may not be available for free but it certainly is worth every penny. With numerous features, Money Dance is not only incredibly easy to use, but it also provides a great visual representation of your spending. For instance, the software looks like a ledger and does an excellent job of summarizing your financial situation including your net worth, liabilities, and assets.

Calendar Budget

We will be honest, this is a fairly basic app for budgeting so don’t expect high-end features. Also, it’s also worth noting that Calendar Budget is not a budgeting app and merely works as a desktop software. Though it performs better than the traditional spreadsheet.

The only downside? You will have to sit down and enter each expense as you. The calendar will then do the calculations so that you can create a decent budget for yourself.


Whether it’s Google Sheets or Excel, nothing can beat the classic the classic spreadsheet. True, it may not come with all the bells and whistles that you would expect in a finance tool, but it works well. One of the obvious plus-points of using a spreadsheet is users have complete control over how they can track data. Plus, it is a safer option since you don’t have to integrate your financial accounts online.

4. Try These Savings and Budgeting Hacks

If you aren’t able to save any part of your income, then consider the easy top saving hacks listed below to help you out.

Here’s a list of changes that I made to my daily routine that was very pocket-friendly, especially in the long run.

Cut the Coffee Runs

Make coffee at home rather than grabbing a cup to go at your corner Starbucks. In terms of numbers, saving on coffee every day can save you about $420 in one year!

Start Cooking More

Cooking at home is not only good for your budget but is so much healthier. Don’t order take out due to sheer laziness — to be honest, laziness and perceived inconveniences are the biggest hindrances to saving money. The internet has so much to offer in terms of cooking Once you get into the habit of it, you’ll find that cooking is very relaxing, and not as time-consuming as you thought.

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Unplug Your Devices

Even though it’s something we don’t always think about, turning off any switches and removing any plugged-in devices can sufficiently reduce your monthly electricity bill. Get into the habit of turning everything off anytime you leave the house or anytime you aren’t directly using power. Consider having candlelight dinners once a week — they make for a great date night, and the power savings will soon add up!

Look Into Refinancing Options

If you are a homeowner, then this one of the smartest things you can look into. If you own a home and have not yet taken advantage of historically low refinance rates, you probably are spending way more than you should be on your mortgage. LendingTree could help you refinance your mortgage at a significantly lower interest rate – Let’s say you can lower your rate by around 1%, on a $200K mortgage, can save you over $100/month and over $40,000 in total over the course of your 30-year loan! 

Start Saving Money on Your Gas

Choose to go green by biking or walking whenever you can. Not only are you helping the environment, but you’ll be getting some exercise and saving on gas money. When you need to use your vehicle, be sure you’re practicing gas efficiency, and use gas saving apps to determine the lowest rate for gas. Trust me, the extra effort will pay off.

Lower Your Car Insurance Bill

Yes, it may seem obvious but when was the last time you compared your car insurance rate? Most people just pay the monthly bill, whatever it may be but car insurance companies make all of their money off people who have been with them for the longest time. It’s true, and if you have a clean driving record… have your premiums stayed the same or even gone up over that past few years?

Find Deals

I know it can be super annoying to get oodles of mail in your inbox with various deals and promotions. But sometimes, various discounts, referral codes and specials are worth the clogged inboxes — especially on larger spends like holidays. A solution is to create a separate email address, solely to be used for signing up for special offers and other promotions. Check this inbox once a week, or if you know you’re going to be shopping/eating out at a particular place and skim through the offers to see if you have a relevant deal or coupon you can use.

Look Into Refinancing Your Student Loans

If you are thinking about reducing costs, you should know about refinancing your student loans. The best in the student refinancing game is SoFi, it is a social lending company that provides rates as low as 1.9% variable with auto pay and 3.5% fixed with auto pay.

You can save thousands simply by refinancing your student loan interest rates. They can offer lower rates than the rest because they analyze you based on merit, quality of employment, and education besides just a credit score and financials. There are zero origination and prepayment fees. Offer terms are from 5, 10, 15, 20 years in both fixed and variable.

Both private and public student loans can be refinanced. Besides low rates, one of their best features is their unemployment benefits. If you lose your job while repaying your loans, you don’t have to pay your loan for up to 12 months while you look for a new job! Interest will still accrue, but having this cash flow break is a huge benefit. They also provide job assistance guidance as well. You can refinance or apply for a new student loan here.

Track Your Net Worth

It’s important to keep track of your finances to build great wealth over time. Sign up with Personal Capital for free, it is an online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I used Mint to manage my finances however that was a waste of time.

Now, by using Personal Capital, I can clearly see how my investments (401K, Roth IRA, Investment Accounts) are doing as well as my regular banking, credit cards, and also see how my net worth is progressing. I can also see how much I’m spending every month and that helps with money management and budgeting. There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.

5. Keep the Future in Mind

It’s always good to keep the bigger picture in mind. Even as a millennial, it’s important to consider the future at some level, though it doesn’t have to be your top priority. First, on your list should be learning about taxes. The thought of filing taxes is daunting to most, yet it is something that must be done.

Being aware of what taxes you owe, and what rebates you are owed is a great aid in terms of budgeting and planning your finances in advance. More often than not, and especially as a young earner or someone that is self-employed, you will be able to claim some deductions and get some amount of money back after filing that can be added to your savings.

All in all, it’s a good habit to know how to file taxes independently; this habit will hold you in good stead in the long term, and save you from the potentially hefty fees that tax accountants charge.

Long-term planning also includes having a savings account, a retirement and pension plan, and long-term insurance. Only when I started working did I find out about various insurance plans and about free investing apps like Acorns. It’s very important to compare everything, from quotes on life insurance to credit card rewards and rates, before you make a decision on which provider to go with.

Obviously, there’s a lot of information to process when it comes to each of these things, but getting a head start on the long-term considerations will benefit you so much in the future. While you may not have to implement all this right away, it’s definitely good to be thinking about it and start researching. You can learn more about Acorns in our detailed Acorns review.

Budgeting for Beginners Can Be Easy

I hope these tips shed some light on basic money management and budgeting. Even though it seems like a lot of information to digest in one go, remember to start slowly, one step at a time. Before you know it, you’ll be managing your personal finances like a boss!

What advice would you give to a beginner who wants to start budgeting and improving their money management skills?

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About the author

Brian Meiggs
Brian is the chief editor of SavingJunkie and is a personal finance expert who has spent the last few years writing about how Millennials can make smarter money moves. He has been fortunate enough to have appeared in several online publications, including Yahoo! Finance, NASDAQ, MSN Money, AOL, Discover Bank, GOBankingRates, and more. He is also diversifying his portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in hands off real estate investing via an app called Fundrise.

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