Most people get a salary less than INR 30,000, and it is quite challenging to save money when your salary is this low. At such low income, surviving for the month becomes the priority for people. They find saving money as a difficult task. In such a situation, saving money becomes a secondary option for most people. It seems quite impossible to save money during such situations. But saving money is essential, and without a savings plan, a person can face big trouble in the future. But, how do we save money with INR 20000 salary? Now, this is a big question. Though it is difficult, we can still try to save money. A person needs to start saving money from an early age. It takes some time to settle down while starting a job. But after a few months, one needs to start thinking about saving money. Even if the salary is INR 20,000, it is important to think of methods to save money.
Though the methods and the options for saving money in this category is not much, one can always try. Even if you cannot save money, you can always cut down your expenses. When you are cutting down your expenses, you are saving money.
When you are earning a small income, it becomes difficult to use the 50/30/20 rule. As per this rule, you spend 50% of your salary on basic needs, 30% on spending and saving the remaining 20%. But, if you have a small income, it will be difficult to follow this rule. Here, we would help you in saving money even if you have a low income.
Tips To Save Money With 20000 Salary
Here are some of the essential tips that would help you out.
1. Clear Debts With High-Interest Rates
Once you are out of college, your job life starts. There will be tons of hurdles that you need to cross to settle down in the place. If you are having a student loan or any kind of loan, then start repaying them immediately. You cannot save money if you do not repay the loan amount. If you try to do so, you will fall into more debt, causing trouble. Talk with your bank and see when you can start repaying the loan amount.
You cannot start repaying as soon as you get your first pay-check, as it would be difficult. All banks provide a certain period within which you can start repaying. Discuss this with the bank, find out the time, and then plan out when you can start repaying. Once you start doing a job, you need to settle down in the new city and figure out the expenses and everything. After doing that, start repaying your loan.
You can even fix a certain amount that you want to pay monthly for repaying the loan. The banks provide the least and the greatest amount which the person can pay. Check out the least amount and start with that. Once you start settling down and get a promotion, do not increase the amount hastily. It would cause you harm. It is better to increase the repayment amount slowly so that you do not face any problems due to a shortage of money.
2. See Where You Can Cut Expenses
When you are earning a small income, you must know your expenses. Write down your monthly expenses in a paper and see where you can cut down your expenses. See if you can cut down the items with a large number of expenses. You cannot cut down money on rent, but you can try to find a home or flat, which will cost you less.
If you find yourself spending more money on transportation, switch to public transport. You can take a metro card or bus card to travel. It will cost you less, and you can save a huge amount of money from that. Once you spend a month or two in a new city, figure out the amount of money that you need to survive in the city. Write down all your expenses and then see where you are spending money unnecessarily and then cut it out. You can do this only after you stay in the place for a while.
3. Open A Recurring Deposit
It is better to open a recurring deposit account rather than opting for other savings schemes. The least amount that you have to transfer to the account every month is INR 500. With the help of this RD account, you would save money even in low income. Moreover, these accounts even provide with interest rates. During the time of emergencies, you can withdraw money from this account and use it.
RD accounts do not have any separate schemes and are completely risk-free. Instead of opting for life insurance or term insurance, it is better to invest your money here. During the starting days, you will get various offers from insurance companies. They will state the advantages that you would get and many more. Avoid such offers as it would do you harm.
No doubt, some of these offers are excellent. But at present, you cannot risk investing your money in such a scheme. Once you settle down and your salary increases, you can do your research on investments. After doing research, choose the best one for you. For now, having an RD account will be a nice option.
4. Do Grocery Shopping In Bulk
Whenever you are going for grocery shopping, make sure you buy the essentials only. Prepare a list of items that you need for an entire month and then go for grocery shopping. Though it is not much, it will spare you from visiting the shopping mart from time to time. Ensure that you pick all the things for an entire month so that you do not have to visit the stores again and again. Prepare an approximate budget that you need for your grocery shopping. After doing that, proceed to buy.
Moreover, you must stick to your list. Prepare a list on your phone or paper and buy the things that are mentioned in the list. Avoid buying anything that is not present in the list. It will spare you from buying unnecessary things and save a few bucks. By sticking to the list, you will find yourself avoiding impulsive buying. The shopping marts do spend a lot of time arranging the shelves in a specific order.
They do this to find the products similar to their list and buy them, even if the cost is higher. You will find yourself buying a packet of oil, which is only an extra 5 bucks from your regular oil. You would end up buying it, thinking it would make no such difference. But, this type of buying will put you in a loss. Buy the things within your grocery budget and stick to the list.
While you are in the shopping mall, do inquire about the shopping cards that the stores provide. Get a shopping cart and use it for your buy. The total amount that you spend on buying the groceries will be added to your shopping card as points. While you go shopping next time, you can use these points and buy your stuff.
Besides that, most of the banks provide some discounts if you use their debit or credit card for shopping. You can even use payment apps for groceries and get cashback and discounts too. It would help you in saving a few bucks and use it in your next grocery shopping. Moreover, it is important to buy things that you need and avoid buying unnecessary things.
5. Prepare Your Budget Wisely
It is important to design your budget wisely. Write down your salary in a paper and then state down your expenses. Now, keep the money that you need for essential things in a separate column. Now, state down the remaining money.
From this remaining money, you need to prepare your budget and state down the amount you want to save. Write down any miscellaneous spending that will occur in the month and as such. Make sure to prepare a lean budget. Though it would be difficult to cut down the expenses, it is necessary to make some sacrifices. If you want to save money, then you need to take this step.
Prepare this budget wisely and make sure that you stick to it. Various applications can help you to prepare your budget. You can use these applications and get the best budget for yourself. Choose the one which would fulfill your needs and will help you to save money.
6. Look For Extra Income
Though it is nice that you are trying to save money from your salary, you can always look for extra income. Once you have completed around 6 months to 1 year in your company, look for some extra income source. You can do various paid internships, help in the local café or bookstore, and earn a few extra bucks. You don’t need to look for extra incomes immediately. Whenever you have some free time, think about how you can earn a few more bucks and start working on it.
Commonly, a person would get bored easily if he/she keeps doing the same work every day. Hence, it is necessary to have a hobby or do something that you like, and what can be better if you earn from here? If you have a pretty good hand at English, look for some writing internships. You can even help your local bookstore in their accounts or work in the café during weekends.
It will not only help you in getting relaxed but will help you to earn some extra money over your salary. You can save up this money and use it later. Another benefit of working outside your office area is that you would meet new people.
By meeting new people, you would get to know about different fields and areas. Your networking will become strong, and you would be able to get to know about various job openings. It would help you switch from your current company and work in a place where you will get paid more.
7. Shop On The First Day Of Sale
Many online shopping websites conduct sales regularly. It is better to shop on the first day of the sale, as the discounts are much higher and you can get things at a low price. There are clearance sales too, from where you can buy things at a lower price.
But, it is important to make a list of the things that you need from the sale. Do not spend money on unnecessary items, and do not go for the “buy 2 get 1 free” deals. It will only cost you more, and you would end up spending more money than you intended. Before you start shopping, compare the prices on various online websites. By doing so, you would get to see the sites which offer you the same item at a slightly lower price. Make sure that you compare both item prices as well as the shipping charges. Some websites charge higher rates for delivering, while some offer free shipping.
Look for the free shipping options and then go for a payment. You should keep in mind during online shopping and try to pay from the payment apps. Most of the payment apps provide nice cash backs, discounts, and coupons. If you use their service to pay for your shopping, you can use the next sale coupons. Look for such options and then choose the right payment app for the payment process.
8. Use Your Bank’s Online Facility
Make sure that you have net banking facilities. Most of the banks provide 10% cashback when the customers use their online services. Check for the net banking facilities in your bank and then sign up for the service.
Almost all banks have their apps, which you can use for various purposes. Be it for transferring money, online shopping, or paying EMI, you can do that from the app itself. The banks provide loyalty points, coupons, and cashback too. You can get such cashback if you use the online services of your bank. As everything is becoming digital, make sure that you use this facility to the fullest.
9. Go For Interest-Free EMI
There are instances when we need to buy a particular object, but we do not have enough money. In such cases, we can always go to the EMI option. Here, the customer has to make monthly payments for the item purchased within the period. In this case, the customer has to make some down-payment for the object.
This is one of the hassle-free technique. Many online websites even provide the EMI option in various items. But, before going for this option, you should check whether there is any interest rate or not. Most of the websites provide an EMI option along with an interest rate. Due to these interest rates, the price of the object increases.
But, most credit-cards provide the no interest EMI option for their customers. The no-interest EMI would help you to buy the item without paying any kind of interest. It is better to go for this option as you would be able to save money. Instead of paying 2-3% extra as interest, it is better to go for no interest EMI. You would get the object and save money too.
10. Use Public Transport
In metro cities, using your vehicle for going to the office can cost you a lot. With the price of fuel rising, it is better to opt for public transportation. You can always go to metro or bus cards and travel safely to your office.
In most of the cities, the public transport services have their apps. These apps would help you to see which route you need to take for your destination. It would give you the time, the bus or metro number, and the route for traveling. It is highly recommended that you should use public transport. They are cheap and will save you money on both fuel and parking.
11. Check For Company Benefits
Most of the companies provide their employees with some benefits. There are medical benefits, meal coupons, and many more. Most of the companies even provide the examination fees for any higher education like CA or CS. Take advantage of such benefits.
Talk to the employer and find out the benefits that you would get. Even if the company is providing medical facilities, you will save tons of bucks. We do know that medical expenses are rising day by day, and in such time, if you can get such benefits, go for it. Most of the companies even provide transport facilities for their employees.
Most of the companies provide a house for higher post employees. The company gives around INR 3000- 4000 as rent money for employees who do not live in company quarters. If your company is providing such benefits, then use it. You will not only save money on rent but also get medical facilities and many more. Even if your salary is INR 20,000, you will save a lot of money if you use the company benefits wisely.
12. Book Tickets In Advance
The prices of tickets rise during the time of festivals. If you plan to travel to your home during the festivals, then it is better to book the tickets in advance. Book the tickets at least 3 months before the festival. It would help you to save tons of money. As the festival draws nearer, the prices of both train and flight tickets will rise.
Another important thing while making an online booking, make the payment through online apps. If you book your tickets from online payment apps, you will even get around 20-50% cashback. By doing so, you would be able to save money on tickets.
13. Make Your Credit Score Good
Make sure that your credit score is good. How can you maintain your credit score? Ensure that you pay your EMIs on time and there are no pending debts on your credit card. This will help you to make your credit score good.
If your credit score is good, the interest rates will automatically decrease. Maintaining your credit score is important. It will help you in getting future loans at fewer interest rates. Make sure to check your credit score from time to time. Besides that, the bank provides offers for customers who have a good credit score. Not only will you get loans at less interest, but you would also benefit from the banks.
14. Shop Local
We know it must be tempting to go to malls and buy things from there, but it will only cost you more money. It is better to shop from local brands instead of going to the malls. There are various local stores in every city which provide quality items at less price. Whether it be dresses, shoes, or vegetables, always try to buy from your local market.
Moreover, in local markets, you have the chance to negotiate the price with the dealer. But, you cannot negotiate the prices in the malls at all. If you plan to buy vegetables and fruits, it is better to go to your nearby farmer’s shop. You would be able to get fresh vegetables and fruits at a reasonable price. The same vegetables, if you buy from the mall, will cost you a fortune. Besides that, there is no guarantee that the vegetables are fresh. Start shopping from local stores, and you would save a lot of money, which would let you survive for the month.
15. Savings In Accommodations
If you are staying in any metro city with a low income, it would be difficult to live in a PG or flat. The rent in PG’s and flats are quite high in metro cities. Even if the PG is far away from your office, it will cost you a fortune and be of no use.
Instead of going for PG, look for hostel accommodations in the city. In PG, you have to share the rent, which can vary depending on the number of people living. Whereas in the hostel, you just have to pay for yourself only. It is better to live in a hostel rather than a PG in a metro city. Various hostels provide rooms to bachelors at a small charge. Look for such accommodations where you do not have to spend much money.
Once you start earning a bit more, you can always shift from the hostel. But, in the beginning, it is wise to look for places where you do not have to pay much for a living. Besides that, most of the hostels even provide food facilities. It means you do not have to depend on restaurants or office cafeteria for your meals.
16. Try DIY Services
Try out fixing simple household items instead of going for professional help. You can learn how to fix a light bulb instead of opting for professional help. If you are hiring an electrician to do such basic chores, then it will cost you money. Learn how to change bulbs and fix a broken tap from online videos rather than professional help.
Moreover, try avoiding parlor and use homemade remedies for yourself. By using homemade remedies, you would not only save money but would even get healthy-looking skin. You can always get an aloe-vera plant and use it for your remedies. Instead of going for expensive parlor services, try simple homemade remedies. It is not only healthy but would work as a therapy too.
Besides that, there are no side effects from such remedies. Stick to a particular hair or skin product only and try avoiding any kind of switch. Companies advertise their product in a way so that you will buy their products. Avoid that and stick to your basic product only.
By switching products, it will affect your budget. Besides that, there is no guarantee that the product will suit you. If the new product does not suit you, your money will go to waste. To get rid of the side-effects, you would have to spend more money.
17. Choose “Pick-Up At Store” Option
Most of the shopping marts have the option of “pick-up at store,” which you can use. You can shop from the store’s online application and then pick-up your items from the store itself. By doing this, you will be able to save money on the delivery charges.
You can shop during your lunch break and make the payment. While returning from the office, you can pick-up your items from the store. It would not only save your time but will help you to save money too. Prepare a list and buy the things according to the list. Avoid buying any items that are not present in the list. Most of the shopping marts have sales during the week-days too. As it will be difficult to shop during your office hours, you can opt for this particular option. The shopping mart will pack all your items, and you can pick it up during your return from the office.
18. Pay Your Electric Bills Beforehand
Electricity bills are the ones which cost a lot. How can you avoid having expensive electricity bills? One option is to switch off or remove the plug while not using it. This will help you in saving a few bucks on the electricity bill.
Another option to save money on electricity bills is by paying beforehand. You can pay electricity bills from online payment apps. While using these apps, you will get huge discounts and cashback too. Besides that, if you pay your electricity bills beforehand, the company will provide you with some extra discount for next month.
You can use these discounts while paying bills. Make sure that you pay your electricity bills from payment apps and that too before the due time. It will help you in saving a few bucks. Though the amount might not be much, it will help you save some amount of money on electricity bills.
What else can you do to save money on electricity bills? Switch to CFL and LED lighting as they are energy efficient. By switching to CFL and LED bulbs, you will be able to save tons of money on electricity bills. Unlike normal tube-lights, the CFL and LED bulbs consume less electricity, are highly efficient, and will not put pressure on your eyes. Once you start using CFL and LED bulbs, you will observe a noticeable change in your electricity bill.
1. I get around INR 20,000 per month, and I am living in a metro city. Should I take insurance?
2. How should I start saving money if my income is low?
3. I have started working for a company, and my salary is quite low. I want to save money, but I also have a student loan. How can I save money?
4. I want to earn extra income, but I don’t get enough time during the weekdays. How can I earn some extra income?
If a person wants to save money, they can save money even if their income is low. Having strong willpower to save money will help the person to do so. Before you spend your money, think about what benefits you will get if you save that money. Make some short-term goals for yourself and start saving for those goals. When you start achieving your short-term goals, you will start realizing how important it is to save money. It will give you a boost to save money for your better future.
If you start saving money now, then you will be able to tackle any kind of emergencies that come in your way. We never know what will happen to us in the next moment. It is better to remain prepared and have some backup, which would help us to survive. You can save money if you want to do so. The main thing is to follow your budget and control the urge to spend money.