Saving money on a tight budget can feel like trying to fill a bucket with water while it’s leaking. For many Nigerians, the challenge of managing daily expenses leaves little room for savings.
However, saving—even with a low income—is not impossible. By adopting smart strategies and leveraging innovative tools, you can build a financial safety net and move closer to your financial goals.
In this blog, I’ll show you three actionable tips to help you save money effectively, plus a powerful feature from Trove that allows you to earn up to 16% annually on your savings.
Why Saving Money is Crucial
Saving money is essential because it provides:
- Financial Security: An emergency fund can cover unexpected expenses like medical bills or urgent car repairs.
- Opportunity for Investments: Savings can be a stepping stone to investing in income-generating assets.
- Peace of Mind: Knowing you have a financial cushion reduces stress and anxiety about money.
How to Save on a Limited Income
1. Create and Stick to a Budget
The first step to saving is understanding where your money goes. Many people underestimate how small, unnecessary expenses add up over time. Creating a budget helps you allocate your income effectively and identify areas where you can cut back.
How to Budget on a Low Income
- Track Your Expenses: Use budgeting apps to record your spending. These apps categorize your expenses, making it easier to see where your money goes.
- Apply the 50/30/20 Rule: This rule suggests allocating 50% of your income to needs (e.g., rent, food), 30% to wants (e.g., entertainment), and 20% to savings. If this ratio doesn’t work for you, tweak it based on your circumstances.
- Prioritize Savings First: Treat your savings like a bill you must pay every month. Transfer the amount to a savings account before spending on anything else.
A budget gives you control over your finances, making it easier to save consistently.
2. Automate Your Savings
One of the biggest challenges of saving is consistency. It’s tempting to spend your income before you get around to saving. That’s where automation comes in.
Benefits of Automating Savings
- Discipline Without Effort: Automation removes the need for constant willpower. Your savings happen in the background, regardless of your spending habits.
- Avoiding Temptation: Once your money is transferred to a savings account, you’re less likely to dip into it for non-essential expenses.
Apps like PiggyVest and Earn by Trove make automating savings simple and effective. For example, PiggyVest allows you to set automatic transfers from your bank account to your savings. Similarly, Trove’s Earn feature lets you grow your money while saving consistently.
3. Earn While You Save with Trove
Saving money doesn’t mean your funds have to sit idle. With innovative financial tools like Earn by Trove, you can make your savings work for you.
What is Earn by Trove?
Earn by Trove is a feature that allows you to earn up to 16% annually on your savings. Unlike traditional savings accounts that offer lower interest rates, Earn by Trove gives you the opportunity to grow your money significantly over time.
How to Get Started with Earn by Trove
- Download the Trove App: Sign up and explore the Earn feature.
- Set Up Your Savings: Deposit funds into your Earn account and watch them grow.
By combining automation with high returns, Trove offers a powerful way to achieve your financial goals faster.
4. Cut Non-Essential Expenses
When money is tight, every naira counts. Cutting back on non-essential expenses is a practical way to free up funds for savings.
Steps to Identify Non-essential Expenses and Cut Back
- Review Your Monthly Spending: Go through your expenses and identify unnecessary costs, such as eating out frequently or unused subscriptions.
- Replace with Affordable Alternatives: For instance, cook at home instead of eating out, or carpool instead of driving solo.
- Shop Smart: Compare prices online and in stores, buy in bulk for discounts, and avoid impulse purchases.
Small lifestyle changes can add up to significant savings over time, making it easier to stay on track with your financial goals.
Read Also: The Best Way to Save for Retirement in Your 50s
Conclusion
Saving on a low income may seem slow, but the power of consistency cannot be overstated. When you save consistently and invest in high-yield options like Earn by Trove, your money grows exponentially over time. Also, it ensures you’re prepared for both emergencies and opportunities.
By creating a budget, automating your savings, and using tools like Earn by Trove, you can build financial stability and work toward your goals.
