Is it possible to save money on a modest salary?

In the collective imagination, saving money sometimes seems accessible only to those with high salaries. But is it still possible to save even on a modest income? The answer is “yes”!

Here are a few tips to help you do so.

Make a budget

The first step to saving is to know where your money goes. Review your bank statements and make a list of the amounts you spend on your various types of expenses.

Financial experts often recommend the 50/30/20 rule:

• 50 per cent of your income should go to essential expenses, like housing, food and electricity

• 30 per cent should go to non-essentials, like entertainment and leisure

• 20 per cent should go to savings

These percentages may vary depending on your situation. If your essential expenses take up more than half your income, look for ways to reduce them. For example, you may be able to switch to a cheaper mobile plan or use public transportation more often.

Create habits

No matter your salary, set up an automatic transfer of a small amount from each paycheque into a savings account. Over time, you’ll see your savings grow—money you might have spent without realizing it.

In addition, try to make a habit of waiting a day or two before making a purchase. Use that time to decide whether the item is useful, essential or simply unnecessary. A few hours of reflection may help you make better financial decisions.

Are you looking for savings strategies you can implement despite your limited income? Don’t hesitate to contact a financial advisor.