Saving money can be particularly challenging, especially if you earn less than $56,500. According to the Pew Research Center in 2022, the lower end of middle-class earnings was $56,500 and the higher end was $169,800 before taxes. That is obviously a large spread. I can tell you that even when I was earning $60,000 a year and trying to raise my son, it did not feel like enough. Even with a background of frugality, I had to come up with creative ways to save money so that it could be spent for other necessary things.
It’s really hard because when you only have a limited amount of money, it is difficult to listen to financial advice that says to just save your money and pay yourself first. That may work if you blow your money on unnecessary items and have never been taught how to budget, but when you have a lower income coming in, most or all of your money likely goes to living expenses, not luxury items. And you do know how to budget. There is just no money left over at the end of the month with the cost of housing, food, and gas.
So how do you even start? I’ve listened to some financial podcasts where basically the answer was that you have to earn more money. And I agree with them. Yes, you have to earn more, but at the same time, you CAN do something right now. Yes, everyone has to eat, everyone has to have electricity, clothes to wear, etc. But when you really look at cost, you can cut costs dramatically by becoming more efficient with your spending habits. For food costs, how much food are you preparing at home? Are you just buying things when you need them? Said in another way, are you more reactive than proactive? These are some hard questions to ask yourself. If you are committed to financial independence and trying to get ahead, you will need to look at your habits. It will take some work, and a little bit of sacrifice. I know you can do it, because I’ve done it and so have many other people.
The three biggest fixed costs you will have are housing, food/household goods, and transportation costs like gas, car payments and/or maintenance. Food is the easiest one to look at first because it is a combination of your eating habits, where you get your food, and how often you go grocery shopping. As always, I like to back up my advice here with a sample of savings. These are just examples and were gathered from prices online based on stores in my location. Obviously, prices in your location may differ but I’m just trying to get you to think of some easy ways to cut food costs. So let’s talk about a few easy things you can do to lower your cost of food.
- Curveball! So this first bullet point is not something you eat but that you can get at grocery stores. I’m talking about boring items like toothpaste, paper towels, bathroom tissue, cleaning supplies, and floss. Take an inventory of what you use at home and see what you can buy in larger quantities because many items are cheaper when you buy in bulk. I’m not talking about Covid era trips to the grocery store to buy out all the bathroom tissue (still confused about that one) but doing a cost comparison or buying household items online. You will be amazed how some household goods are so much cheaper in bulk whereas others are not. Be an informed consumer and research item prices versus bulk prices. It will take just a few minutes to look it up online, I promise! Take 10 minutes of your time to do this exercise.
For example, toothpaste:
- Colgate Total on Amazon in bulk: $15.98 for a 4 pack of 5.5 oz (0.78/ounce)
- Colgate Total on Walmart: $3.98 for one 3.3 oz (1.20/ounce)
- Bulk savings of $0.42 per ounce or 35% savings if you buy in bulk
- Obviously, a higher upfront cost but less trips to the store will save gas and time
- Buy food items that you use frequently in bulk. I’m talking pastas, rice, beans, canned foods, etc that have a long storage life. These staples can last a long time and you can make some delicious meals with them.
- A 5 pound bag of rice costs between $5 to $9 depending on the brand and type of rice and will yield about 25-50 servings of cooked rice, depending on the type of rice. If you get already cooked packets of microwaveable rice, it can cost anywhere between $2 to $3 per serving.
- This may be more controversial because I know some people hate the taste of water but I’m going to say it anyways: Quit buying designer drinks. I’m talking sodas, fizzy drinks, etc. Drink water or get some packets to flavor the water! Your body will thank you.
- A 6 pack of 16 oz bottles of soda costs around $4 to $5. Water is free.
- Meal planning. Have you ever been so exhausted when you get done with work that the thought of cooking makes you want to go straight to a restaurant or get fast food? I’ve been there. Meal planning is a great tool, but tricky because you might plan for one meal and then not want it at all when you get home. Its unfortunate to meal prep pasta but then your coworker had enchiladas for lunch and now you really want something Mexican. I am a big fan of making a few different meals that I like, then having options for when I go home. Find what works for you and stick to it. I’m planning a future post dedicated to this as I know it can be a big undertaking.
- A meal out can be anywhere from $9 to $20 a person. It’s getting more expensive. The cost of meal prepping can vary depending on ingredients, but will almost always be cheaper than eating out.
- Might as well end with something to think about. Eat less! No, I’m not talking about starving yourself. But I am talking about limiting snack foods that are unhealthy and expensive. Double whammy. I mean, where does a party size bag of chips fit into the food pyramid? Your body is a temple and you should be ensuring you get the nutrition you deserve. Take unhealthy snacks and trade it for something healthier, like chips for carrots.
- Party size bag of chips: $6 versus bag of baby cut snack carrots: $3
Use these examples and see how they compare to prices your area. Doing these 5 things can be the start of some sound financial habits that your wallet and body will both appreciate. Remember that there is nothing more luxurious than your health. And if you do not like these five items I’ve come up with, I challenge you to find replacements that work for your home life and situation. It can empower you to know that there are changes you can make right now, regardless of your current financial situation.