It can be difficult to figure out ways to save money on a tight budget when you are living on one income, but it can be done with a little determination, some sound advice, and a bit of technology. You can save money while living on one income.
Below I share some tips on how to save money each month when you are living on one income. And, keep in mind, even if you live in a two-income household, these tips will put you further ahead financially.
1. Save Money on Food
The average American spends $4,500 a year on food with a lot of that being lost in the drive-thru lane (this could easily cost $12 a day) and bad grocery-shopping habits.
If you want to cut down on food costs, try eating at home more, and follow a few simple grocery-shopping hacks. Don’t shop without a list and definitely don’t shop hungry. If you can avoid impulse buys (I’m talking about those tasty-looking snacks that are hard to pass up), you’ll be surprised by how much money save every trip. Then step-up your grocery-shopping game by earning cash back at the grocery store.
Earn Cash Back On Groceries
The Ibotta app pays you free money to grocery shop. Simply create an Ibotta Cash-Back Grocery List and go shopping.
Take a picture of your receipt with the Ibotta app, and free money will go straight into your Ibotta wallet. (In our experience, the free money hits your account within seconds of the receipt picture being taken.)
What do you do with your free Ibotta money? That’s up to your. Deposit your money directly into your bank account, or redeem a free gift card to your favorite online retailer.
It’s time to maximize your savings on food. Don’t shop hungry, keep a grocery list, and earn cash back on groceries with the free Ibotta app. You’ll get a $20 welcome bonus from Ibotta just for using the app!
Want more ideas on how to spend your Ibotta money? Check out our helpful Ibotta Explainer Video.👇
*COVID-19 Hack: Since you’re cooking at home, you’re probably buying more groceries than ever. Ibotta saves you money on groceries nearly every grocery trip. Grab your receipt, snap a pic, and earn cash back. (You’ll get a $20 welcome bonus just for using the app.) Another tip if you’ve been having your grocers delivered: Ibotta will give you 2% cash back on your Insacart delivers. So you’ll save on the delivery fee, and you still get to take a picture of your receipt to earn more cash back.
2. Pay Off Debt
As long as we owe money to someone else, we will never be financially free. Credit cards charge anywhere from 17% to 27% (or more) in interest. If you only pay the minimum, it will seem impossible to pay off the debt. Try to pay off your credit cards fast. The less you owe on a debt, the less you will pay in interest. To pay off your debt as fast as possible, consider a balance transfer credit card
Balance Transfer Credit Cards Lower Your Interest Rate
Balance transfer credit cards allow you to transfer your credit debt to a new credit card. Why would you do this?
For a much lower interest rate. Some of these balance transfer credit cards will give you 12 to 18 months of no interest. You will get out of debt faster, and spend less money doing it.
Credit Land does a great job of comparing different balance cards (look for the longest term and the lowest transfer fee).
“Help me stop being poor!”
Here are the facts. The *only* way to save money is to spend less than you earn. There’s no way around it.
So what does this mean for you? It means you need to either decrease your expenses or increase your income.
We want to help you do both. Join our 6-day Savings-Account Accelerator Workshop. We’ll send you expense-lowering tools and techniques (and even a few tips on how to boost your income). These frugal-living hacks will help you accomplish the cardinal rule of personal finance: keep your income over your expenses.
When you can spend less than you earn, your money will grow. You will build your savings, pay down debt, and save for retirement.
Join our free 6-day Savings-Account Accelerator Workshop, and start growing your wealth today.
3. Understand Your Finances and Use Budgeting Tools
In order to be successful with a single income, set aside some time to figure out and understand your finances:
- How much money do you have coming in each month?
- List all your expenses (mortgage, rent, groceries, phone, auto loan, water, electric, gas, insurance, property taxes, cable, internet, etc.)
- Add up how much money do you spend on expenses/bills each month?
- Which of those bills you pay are absolutely necessary and what is the amount? (Sorry, the internet and cable might not be essentials.)
- Mark on a calendar when you get paid and when your bills come due.
- Determine how much you have to set aside each paycheck to take care of groceries and bills.
When you have a clear snapshot of what you make and what you spend, you can now look for ways to spend less than you earn so you can save money. Ultimately, that is the key: Spend less than you make. Do this, and you can save.
Budgeting apps can make the process much easier. Personal finance writer Michelle Salater says the Charlie app is your BFF (best financial friend). When you download the free Charlie app, he will tell if you are spending too much or if you are on track with your spending. Charlie is just one of 13 budgeting tools we have written about. See if Mint or You Need a Budget can help you get a better idea of your financial situation.
Pro Tip: Thanks to technology, we have at our fingertips, literally, access to a free, AI-based financial assistant to get a comprehensive view of our finances.
Download the free Charlie app to better understand what you make, what you pay in bills, see if what you pay for utilities is more than usual, and tips on budgeting. The average Charlie user saves $80 a week. The upside is Charlie can help you save $4,160 a year … if you are average. Half of that is still more than $2,000.
Pro Tip: Saving money does not come naturally to most people. We like spending money!
If savings has been difficult for you, sign up for the free Budgeting Couple workshop: 6 Hacks to Grow Your Savings. Building a savings is simple … once you know how to do it. This can aid your efforts to build up an emergency fund, which gives you some breathing room during difficult financial times.
4. Cut Your Expenses
Once you determine how much money comes in every month and what your bills cost, then you can start exploring ways to cut your expenses. Do you have a home computer and rarely use it because you are on your phone all the time? See if you can get rid of internet service. You can always get free Wi-Fi in coffee shops, fast food restaurants, and libraries. They can sometimes have better internet service than we have at home (a web developer friend who worked out of his house used to go to Panera Bread when he needed a quicker internet connection).
You might see some reduction in expenses when you move from two incomes down to one. Couples save on daycare expenses, income taxes generally decrease, how much they spend on gasoline and vehicle maintenance goes down, they don’t spend as much on clothes, and they go out for lunch less often.
If you downloaded the Charlie app, then you might have discovered already if you are paying too much for your phone, cable or internet service. Charlie analyzes your bills, compares it with what others pay in your area and determines if companies charge you too much for services.
If you pay too much, then you should consider calling to get a discount or possibly canceling and going with another provider. When I called to cancel my satellite dish service, they were more than happy to offer me a better deal.
You can try to do this yourself, but it’s easier to let a bill negotiation service do it for you. Try the free Charlie app; they’ll probably find a forgotten expense you’d be happy to take off your plate.
Also, ask yourself if you really need Netflix, Hulu, Spotify, Audible, Apple TV, Disney+ and other streaming services. Something my wife and I have done is to cancel streaming services for months at a time.
Wendi really loved The Crown. Once she caught up, we canceled until the next season premiered. I love football. I subscribe to the NFL Network during football season, and cancel the rest of the year.
If you have ever subscribed to a subscription service, then there’s a good chance you are still paying for a service you no longer use. It’s easy to do, and more people do it than you might realize. These companies make it so easy for us to sign up for a free trial, then we forget about it.
We promise ourselves we will cancel before we have to pay. But, life gets in the way, and we fork out money for a service we don’t want. If the service automatically draws the money from a credit or debit card, then $8 to $10 a month will not even register.
Pro Tip: Sign up for Trim and let the service identify your forgotten monthly subscription fees. In the past 30 days, Trim has saved users more than $1 million.
5. Save Money on Housing
You can save money on housing several ways, from refinancing to downsizing to reducing the costs associated with living at your place.
If you own a home and plan to stay in it for at least five years, check the current interest rates. If current interest rates are 1% lower than what you pay now, then consider refinancing. If you look at the refi options and determine they are in your favor, you can reduce your monthly payment and increase equity quicker.
If you own your own home and don’t want to refinance, you can sell and move into a smaller home. This takes time and involves other expenses (like moving, setting up utilities and paying deposits), so it might not be the best option. However, something else to consider: Entertain the idea of roommates or rent extra rooms on Airbnb (and save the rental income).
No matter what happens with refinancing, downsizing, roommates or Airbnb, you still have choices when it comes to saving on housing expenses. You can check out some Energy Star-rated appliances and other energy-saving devices.
Pro Tip: If you want to see more renewable energy on the grid, sign up for Arcadia Power. Check out their free plan. Your rates will be guaranteed to stay the same or even drop.
6. Save Money on Transportation
As with housing, you have several options at your disposal when you look at how to save money on transportation: You can sell your car and buy something cheaper; you can sell your car to go down to one car; you can ride a bike; you can walk; you can use public transportation; or you can carpool.
Why you want to reduce transportation costs can be found in a study by AAA: It costs more than $9,200 a year on average to own a new car. The amount includes the car payment, maintenance and repairs, insurance, gas, and licenses and registration fees.
Friends of mine had three cars. They sold two and made up for the lack of an extra vehicle by bicycling. If they really needed a second car, then they rented one for the day. They saved money on car payments, auto insurance (we talk about saving on insurance in Tip #8), gasoline, and repairs.
You can save on gas by using a rewards credit card, and did you know it doesn’t have to be from a gasoline company? Use a rewards card from a major bank or credit card issuer, you can get the best of both worlds: You will earn cash back rewards for your gas purchases, and when you shop in-store and online.
Pro Tip: Credit cards can be a great financial tool if you do these two things: 1) Pay off your balance every month, and 2) use a rewards credit card that pays you cash back every time you swipe. Some couples have earned up to $1,000 a year in rewards. Check out some of the best reward credit cards of 2020 (check out #4 for double the rewards).
7. Save Money on Shopping
We previously wrote about 9 Target Hacks You’ll Wish You Knew Sooner, and many of those tips and tricks can help you save when you shop in-store and online (my wife and I love #8 for obvious reasons) at other retailers.
If you shop in-store, sign up for the retailer’s loyalty program. You will receive emails (and maybe even regular mail) about sales and special discounts. Store credit cards are another way to save when shopping. My wife, Wendi, loves the deals she gets from Kohl’s, but you have to use their credit card. So, what she does is to make her purchase with her Kohl’s card to get 20 to 30% off (she won’t bite on those 15% off coupons). As soon as the cashier completes the sale, she says she would like to make a payment on her Kohl’s card bill. Then she pays the exact amount of her transaction. By doing this, she gets the nice discount, and she avoids paying interest on the credit card.
If you are shopping online, put an item in your cart, proceed to checkout and then just close the tab. Retailers have sophisticated analytics that allow them to know when a shopping cart has been abandoned. In order to get you to complete the purchase, they might offer you an additional 10% off or some other promotional offer. If you don’t need the latest and greatest, look for TVs, software, phones or computers that are no longer top of the line because a new model or version just came out. When I shop Amazon for electronics, I always look for models that have fairly high ratings and are a notch below the best-in-class. I pay attention to the three- and four-star reviews more than I do five- and one-star reviews.
Thanks to an assortment of innovative apps and services, there are so many more ways to save. It used to be to wait for a sale or see if there was a rebate offer. Now, shoppers like us can be more proactive and take advantage of free apps and services to keep more cash in their pockets. Here are some of our favorites:
- Ibotta: We love Ibotta to save on groceries. Ibotta paid $186 million to those who shopped with their app. Sign up for Ibotta here and grab a $20 welcome bonus.
- Rakuten (formerly Ebates): Rakuten works with 2,500 companies and will pay you cash back rewards when you shop with those partners. The gem of Rakuten is the Cash Back Button, which is a browser extension. It will automatically alert you when you are on a site that offers cash back rewards, and it does this in the background. Sign up for your free Rakuten account here and + $10 welcome bonus on your first cash-back purchase.
- Wikibuy: This browser extension is a must if you shop Amazon. Wikibuy will let you know if the item on Amazon is cheaper from another retailer. You can also see the item’s price history. And, when you shop online and are ready to check out, Wikibuy will automatically search for coupon or promo codes to save even more (helped me save 20% recently … it’s like free money).
- Paribus: This app monitors your your recent online purchases for discounts. If a recent purchase goes on sale, Paribus will alert you and then work to get you money back. It monitors 30 major retailers, including Amazon, Target and Walmart. Get Paribus so you can stop missing out on sales.
Pro Tip: These are just some of the apps that will save you money when you shop. Check out our 12 Best Cash Back Apps (Make Free Money) post and discover twice as many more ways to save.
8. Save Money on Insurance
Having sold insurance for a little while, I understand the importance of it. In my mind, insurance is all about managing risk. However, the reality is insurance is all about protecting you, your family, your home, your belongings, and your vehicles. The peculiar thing about insurance is it is the one thing we buy that we don’t want to use.
Some insurance companies will offer a discount when you bundle home and auto together. While this can be a good thing, it is important to shop around because sometimes you can get better rates if you purchase policies from different providers. A friend who sells insurance posts photos all the time of people he’s helped save $300 to $600 annually in premiums because they were willing to shop around.
You can save on your auto insurance if you drive older cars or ones that are not expensive. Something to be cautious about if you drive a new car, your insurance policy might not cover the entire amount if the vehicle were to get totaled. What contributes to this are rising costs of automobiles and longer terms on loans. New cars depreciate as soon as you drive it off the lot, so the value is dropping a lot faster than you are paying it off. So, be careful when buying a new vehicle.
Also, if you are a safe driver, your insurance premiums will decrease because you are not a high risk. Something else to consider, many insurance companies use your credit score as a factor for car insurance. So, make sure you have good credit.
Consider if you really want to file a claim for losses that are just a little more than your deductible. Your insurance agent cannot tell you to refrain from filing a claim. However, from my experience, if you file claims all the time to “get back some of your money,” you will pay more in premiums or you might have your policy canceled for being a high risk. So, if your deductible is $500 and your losses amount to $600, think about whether the $100 is worth it. Never be afraid to file an insurance claim for legitimate purposes, it is there to protect you. But, I would not game the system to “get some money back,” it will cost you more in the end.
Pro Tip: Comparison shopping is a great way to save money on insurance. Gabi is a free online home and auto insurance comparison site. In about two minutes, you will find the best rates. Create your free Gabi account to see how much you can save on insurance.
9. Use a High-Interest Savings Account
You will benefit if you develop a saver’s mindset: Whenever you implement one of these hacks, promise yourself you will deposit the money in a savings account, but not just any savings account. You want to deposit your money in a high-savings account.
You really need to have a savings account to put your money in an out-of-the-way place that’s not so easy to access. Your checking account is designed for quick and easy spending; but the government places limits on how often you can withdraw money from your savings account.
By making it more difficult to withdraw your money, you become more likely to leave the cash alone and build your savings. Unfortunately, not all savings accounts offer the same interest.
Pro Tip: CIT Bank’s Savings Builder account offers +10X more interest than the national average for savings accounts. This is a huge opportunity for your emergency fund. (See CIT’s live banner below for the current Savings Builder APY)
All it takes is a $100 minimum deposit to open an account. Just for some perspective, if you had $10,000 in a CIT money market account, you will earn +$100 in free money (from interest) every year. If your money was parked in a bank with an average APY of 0.08%, you would take home a whopping $8.
Ditch your bank because they’re not paying you enough interest. Switch to CIT and start earning good money on your savings.
Time for Action
Please don’t read these tips and fail to act on them. You can save some real money, which will make it much easier to live on one income. If I were to start slowly, I would do these three things first:
- Download Ibotta to find savings and earn cash back. You have to eat, right? Might as well keep more of your money. (Don’t forget the $20 welcome bonus)
- Say hi to Charlie. Budgeting is the best way to save money. Charlie wants to do most of the heavy lifting for you, and his services are free!
- Add the Wikibuy extension to your browser. Wikibuy will help you make informed decisions and ensure you don’t pay too much for something.
- Sign up for a free Gabi account. In two minutes, you might be able save hundreds of dollars in insurance premiums.
The more of these tips you implement, the more you will have to save when you live on one income.
If you are living on one income because you want to be home with your young children, it might be worth checking out remote and work-at-home jobs via the Steady app.
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Save more money! Check out these articles next:
- Ultimate Guide to Saving Money
- 12 Best Apps to Save Money on Autopilot
- 25+ Ways to Get Free Amazon Gift Cards
*Wikibuy compensates us when you sign up for Wikibuy using the links we provided*
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