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Saving Money With Just One Income

The key to building long term wealth is saving money. You need both an emergency savings account and a long term retirement account. If you find yourself living on one income, this can be hard, but we can help. Take a look at some tips that can help you divert more of your money away from expenses and into your savings account.

Saving Money On A Single Income

Saving is very difficult, especially if you are not used to it. Unfortunately, most Americans are not used to it, which is why so few have emergency savings and even fewer have retirement accounts.

What that eventually means is that most Americans will end up relying on the Social Security system in retirement. If you want to just get by, that might be okay, ut your quality of life will suffer greatly.

Luckily, there is almost always a way to save, even if you are trying to save money with just one income. It involves maximizing your saving opportunities and diverting money that was meant to expenses into your savings. Here are some ways to do this.

1) Cut Your Grocery Expense  [Save $200 – $400 A Month]

You might think that your grocery bills are pretty fixed, but you are almost certainly wrong. Most people can save hundreds of dollars a month by making one simple change.

That change is to cut out waste. How many times a month do you find yourself throwing our produce, bread, milk or worse yet, meat? If you are like most Americans, it is pretty often. Americans waste 80 billion pounds of food a year.

Cutting back on food waste is achieved with meal planning. Every week, you need to sit down and write out every meal and snack that you plan to serve during a week. You then write down all of the ingredients that you need to make these meals. This is your shopping list. Take that list and first shop your pantry. Erase anything that you already have and buy the rest.

Meal planning allows you to buy just what you need which cuts down on waste. It also saves you time and eliminate those potentially costly last minute trips to the grocery store.

2) Use Free Curbside Pickup  [Save $50 A Month]

Shopping in person at the store is risky. It comes with financial risks and, because of Covide, it also comes with health risks. Let’s concentrate on the money risks for now. The reason that shopping in person is financially risky is because of merchandising.

Retailers use all kinds of tricks to get every dollar that they can out of your wallet. They put all of the pricey name brand products front and center and make you reach for the generics. They also put up fancy end-caps and shiny things within reach of children.

Avoid all of the risks and temptations by taking advantage of free curbside pickup. Retailers have made the move to free curbside pickup mainly to keep up with other retailers. When you shop online, you do not have all of the normal distractions which means that it is much easier to order just what you need without temptations.

With an average up-sell of 10 percent when shopping in store, an average family can save nearly 50 dollars a month just by switching to free curbside. Use curbside for groceries, clothing, electronics and generally wherever it is available.

3) Pay Off Credit Cards [Save $100 A Month]

Easier said than done on a single income. Yes, paying off your credit cards will be a tough task but it is one that will set you up for a strong financial future. According to Nerd Wallet, the average household carries more than 6000 dollars in credit card debt. At 20 percent interest, that is 1200 dollars a year in interest or 100 dollars a month.

Cut out the credit card debt and you can see significant savings. To pay off this debt, you need to use a plan. The two most popular methods are the Debt Snowball method and the Debt Avalanche method.

With the Snowball method, you pay off the lowest balance cards first. This provides a fast reward and motivates you to keep on paying the cards down.

With the Avalanche method, you pay off the highest interest rate cards first. This saves you the most money in interest.

Learn more about these methods and paying off your credit cards here.

4) Max Out Your 401K [Save $200 A Month]

If your employer contributes to your 401K and you are not maxing out this contribution, you are simply throwing money away each and every month.

When things are tight, it is easy to try to make cuts by pulling back on retirement savings. This is never a good thing, especially when you are talking about an employer match 401K.

The most common employer match is 50 cents on the dollar, usually with an employee contribution of up to about 6 percent. This means that if you contribute 400 dollars in a month, your employer will give you 200 dollars. That is 2400 dollars a year plus growth.

5) Downsize Your Vehicle Expenses [Save $500 A Month]

If you only have one person working in your household, chances are good that you can cut your vehicle expenses.

One way to do so is by claiming less mileage. Call your insurance provider and let them know that one of the drivers on your policy will be driving far less. Many providers will give a discount for reduced mileage because it cuts their risk. If yours does not, it might be time to shop around for a new insurer.

An even bigger way to save, if you have two vehicles, is to get rid of one of them. This is a big sacrifice to make, but if you want to start saving, it can put a lot of money back into your pocket.

If you are financing 2 vehicles, you could save 500 dollars a month or more by eliminating a vehicle with its monthly payment and the full coverage car insurance that goes along with it. This is much easier to accomplish if you have no negative equity on your vehicles, but if you have a little on one or both you can probably still make a money saving trade.

6) Save On Housing [Save $300+ A Month]

Whether you rent or own, you can almost always save money on your housing costs.

If you rent and your lease is close to being up, simply move to a cheaper rental. This could be accomplished by looking for one with fewer amenities, in a cheaper neighborhood or downsizing to a smaller home.

If you own, there will be more involved in cutting your housing costs, but the effort may be worth it.

Once option is to simply refinance your loan. This could be very beneficial if you are able to secure a cheaper interest rate. Even if a lower rate is not possible however, it might be worth it in order to stretch out the term of your loan. Adding another 5 or so years to your loan term might cost you more in interest, but it could make the payment affordable enough that you can stay in your current home long term.

Another option, if refinancing does not make sense, it to simply sell your home and move into a cheaper one. That might involve moving to a more affordable area, into a home with a lesser “finish out” or downsizing.

Posted by
James Car

James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.