How to Save Money On Fixed Income

How to Save Money on a Fixed Income

Do you believe you’ve cut your expenses to the bone, and there’s no way to toe with the budget anymore, especially considering your fixed income? If that is so, you might have to rethink that statement again!

After all, living on a fixed salary does have its merits. For instance, when you’re living on a predetermined income basis, you always get your money at the end of the month, no matter the business’s financial situation. 

Be that as it may, we can also understand how a fixed or low income can be severely troubling, especially when it comes to saving money in the long run.

However, have you ever wondered what the complications behind this unsolvable dilemma are, to begin with? Since you can’t solve an issue without knowing the problem, it’s crucial that we start by working out this quandary first.

Where there is fixed income, there are fixed expenses (and some more!)

If you’re here reading this article, you’re likely looking to create a more stable and comfortable lifestyle while working a way around your fixed or low income.

The problem you must be dealing with currently is that while you’re getting by on a fixed amount of money every month, cutting expenses and bulking your savings account is proving to be more than challenging.

Why’s that?

It’s because while you have a steady amount of fixed income coming in every month, you also have fixed expenditures to deal with simultaneously. So, the money you get each month?

Most of it is spent on things that you think are the absolute necessities. Moreover, the rest of the savings are likely spent on an emergency fund, like sudden car maintenance, social obligations, and hospital visits.

However, that said, the solution is comparatively more straightforward than what you’d imagine!

Know how to cut your expenses for saving money

You must’ve heard of the saying, “Where there’s a will, there’s a way.” Fortunately, this is well and true when it comes to saving money, even if you have to rely on a fixed salary to manage your monthly expenses.

Since the problem you’re dealing with is that your fixed expenses are keeping you from saving money, that’s precisely what you’ll have to work on. Moreover, this is also where we come in with the solution.

That is, cutting your expenses such that they don’t alter your lifestyle all that much yet offer you steady savings every month.

However, if you’re wondering how to do that, there’s nothing to worry about. In this article, we’ll show how you can save money, pay your debt, and invest a reasonable amount while also living your best life by cutting down your expenses to a significant extent.

22 ways to save money on a fixed income

Below, we’re delineating twenty-two ways to save money when you’re limited to a low or salary, considering that it’s also your only source of generating money:

22 Ways to Save Money On Fixed Income

1. Open a savings account ASAP

The first and the most critical part of saving a significant amount of money every month is setting up a savings account. Making a conscious choice to save money is difficult as it is. Forcing yourself to make that choice repeatedly is even more challenging.

Even if you make an excellent savings plan for yourself, you’d likely spend all the money from your checking account because now that you’ve been doing that for so long, it only feels natural to keep following the same practices.

On the contrary, when you open a savings account and set up an automatic transfer to that every time your salary is transferred, you can breathe more easily knowing a chunk of your money is safely tucked away!

2. List out everything you spend your money on

Once you’re done with step one, you need to figure out exactly how much money you can afford to put into the savings account such that you wouldn’t need to retrieve any money later on.

For that, you have to follow a series of steps, starting from listing down every single thing on a document that you spend your money on. By everything, we mean everything from your utility bills and car payment to mortgage, groceries, and entertainment expenses.

3. Decide on your priorities

The next thing you need to do is to decide on your priorities and stand firm on them. While you’ve already listed everything you spend your money on, you still haven’t figured out how much money you’ll need to be saving monthly.

That can only happen once you know what your short and long-term objectives are. For example, you could be striving to save money to replace your car soon, or you could be saving to pay off your accumulating debts. 

These factors need to be addressed before you set up a budget because that tells you how much money to put aside every month.

4. Separate the essential and non-essential expenses

Now that you’ve your expenses, liabilities, and potential expenditures listed in one place, your next step is to separate the essential and non-essential spendings, classifying them into two lists.

For instance, you could be spending a part of your money on take-away from food services. This could be something you can list under the non-essential expenses since you can always learn to cook and save a ton of money there. 

The same goes for other entertainment-related bills and subscriptions, including Amazon Prime.

5. Set a realistic budget plan

One of the primary components of living well on a fixed salary is to stay true to your dedicated budget while practicing adequate money-saving strategies.

However, you can’t do that when you set up a kind of budget for yourself that can only be implied hypothetically. While we feel somewhat optimistic when making a budget that saves us tons of money, that optimism all but leaves us clutching at straws by the middle of the month.

Therefore, it’s essential to consider everything you’ve already done following this guide, i.e., comparing your essential and non-essential expenses and deciding on your priorities, before setting a realistic budget.

Once you can differentiate between what’s possible and outright unrealistic, only then can you make a budget that’s worth following in the long run.

6. Use technology in your favor

You might think that your money always goes in the right places and that you rarely overspend, if ever. However, we all know that at the end of the month, we’re all scratching our heads and wondering where all the money went! 

To prevent that situation from happening ever again, you can take advantage of a budgeting application. It’s advised to use it to save all the transactions you make, even if it’s only a few dollars.

After a month, you can pull up your expenses and see for yourself where the little tidbits of money go, undetectably accumulating to a healthy chunk by the end of the month.

You can distribute these extra expenses into essential and non-essential lists as well.

7. Compare your expenses to find better deals

By this point, you must have made an adequate budget after comparing your current and potential expenses with your fixed income. This means now you know how much money should be automatically transferred from your checking account to savings accounts like initially planned.

So, the next step is to ensure you’re saving the said amount of money every month by cutting your expenses substantially. The best way to begin is by comparing your expenses, where you can, with other similar deals. 

For example, consider your cable bill payments and analyze whether the company you’re using is charging you more while giving you similar services and advantages to another company.

On the other hand, the best deal would be to cut the cord once and for all and look for adequate streaming services, which is a tried and tested method to bulk up your savings.

8. Lower your monthly entertainment expenses

Saving More Money On a Fixed Income

Between going out for movie nights with friends every other week, eating in restaurants, and paying for multiple monthly streaming subscriptions, your living expenses can pile up like Mount Everest.

You should consider moderating these entertainment-based expenses the very first thing if you’re serious about saving more money.

9. Look for free or affordable entertainment alternatives

Instead of leaning toward entertainment that costs you heavily, you can look for free or at least affordable alternatives to step up your budget game.

For instance, you can always go for hikes, host one-dish dinner parties instead of favoring restaurants, and have in-house movie nights with friends, and see how much you can save up by making these conscious changes in life.

10. Pay off the high interest debts first

Paying off your debts can be one of the most challenging things to deal with when you’re already striving to make ends meet while saving money. In such cases, a good rule of thumb is to always pay off the high interest debts first and then move on to the short-term debts. 

Most people make the costly mistake of doing the opposite because it seems easier to deal with the small debts first. That’s because they don’t consider the interest rate getting higher and higher on the long-term debts that they’re leaving unpaid while paying off small debts that don’t accumulate all that much, to begin with.

11. Stick to a schedule to pay off short-term debts

That said, it’s also a bad idea to neglect your short-term or credit card debts completely. Instead, you have to develop a scheduled plan for paying off that money on a gradual timeline. Making a steady plan and sticking to it can make it easier for you to pay all liabilities with proficiency.

12. Explore your options regarding investments

When you start saving more money, you also get the opportunity to explore your options regarding investments. For example, investing in regular mutual funds or index funds can be a good option for people on a fixed or low income yet still far away from their retirement period.

13. Lower your monthly food expenses

By now, you must have figured out how saving works. You need to cut expenses from anywhere you can, even if it’s not that much of a huge amount. Lowering your food expenses is a must since that helps you follow your budget much more successfully.

You can take a paid cooking course one time and then save for the rest of your life. Or, you can stick to free online cooking lessons to get the show on the road!

14. Spend each weekend learning different diys

Similar to how you can learn to cook yourself, you can also spend some time learning other DIY skills every other weekend. For example, you can get yourself informed about plumbing by watching a few detailed tutorials or even learn how to do your floor’s tiling. Giving some time to learn and practice such DIYs can save you a lot of money in the long run.

15. Pay with cash instead of using credit card

Save Money By Paying with Cash

This is yet another excellent tried and tested technique to save more money. When treating yourself to a mall trip and as such, try paying for everything with cash rather than your credit card. That way, you can keep a better track of how much you’ve already spent, keeping yourself from spending too much money in ignorance.

16. Downsize your living and traveling costs

Another excellent way to cut your expenses is by downsizing your living or traveling arrangements. For example, suppose you don’t need to live near a city anymore, or all your children have already moved out.

In either case, it can be an excellent opportunity to downsize and move to a relatively cheaper area. Similarly, if you’re driving an SUV yet your needs can be just as easily met with a cost-effective Sedan, now would be the best time to switch your vehicle as well.

17. Rent out rooms, if possible

Moreover, suppose you can’t move into another house but still have an extra room that’s gathering dust as of yet. When that’s the case, you can always put it on rent. This will help you massively with the bills while also saving you a good chunk of money on the get-go!

18. Cut down your electricity bill

Cut Expenses on Your Bills

The U.S. Energy Information Administration (EIA) reports that an average electricity bill of a resident is approximately 8% of their social security benefits!

While you might think that the TV or the coffee machine you’ve left plugged in isn’t consuming any electricity, you would be dead wrong. These devices are referred to as ‘energy vampires’ for a reason since they work around the clock, even when they’re not in use.

To make sure you’re not overspending on your electricity bills, you should start getting into the practice of unplugging things by yanking the cord. Moreover, you can use smart power strips that automatically cut off any power when the devices aren’t in use.

Similarly, some electric devices, like desktop systems, have built-in sleep modes that you can turn on to save a significant amount of energy when they’re idle.

19. Slash your water bills

Like electricity bills, the average money a U.S. citizen spends on water bills is nearly 5% of their social security check. However, you can make conscious choices by limiting your water use where possible.

For example, you can consider planting trees in the garden that thrive without requiring much water. Plus, it would help if you stopped running water unnecessarily when you’re shaving and fix the plumbing issues that cause the taps to drip water when not in use.

20. Don’t neglect your health to save money on medicines

To keep the big expenses from piling up, some people neglect their health by saving money on medicines.

However, the considerable amount you’re trying to save by doing this can cost you magnificently when you have to pay up for sudden health care expenses later on because you didn’t care for yourself initially.

Therefore, if you’re looking to save more money, we suggest taking good care of yourself rather than slacking medicine money.

21. Start a side hustle for extra money

Not to mention, it’s essential to start a side hustle when you’re on a fixed or low income while making sure it doesn’t affect your primary job in any way. A certain percentage of your bills can be paid, even if you get a small part-time job walking dogs or driving an Uber on weekends.

22. Re-do your budget accordingly

Lastly, after observing your budget and expenses following the mentioned practices in this article, you should re-do the budget accordingly. It’ll be good for you since you’ll have an even better idea than before regarding what works for you and what doesn’t. 


Ultimately, when working on your budget to save money on a fixed income, you’ll have to retrace your steps until you finally get it right. Following the steps mentioned in this guidepost will help you work out a budgeting plan that’s the perfect fit for you!