5 Ways Minimum Wage Earners Can Save
Published: July 29, 2015 | Updated: March 16, 2020 | Posted by: Carlo Miguel Castañeda | Personal Finance
Saving is a habit, built over time. They say it takes 21 days of consistently doing something in order for a habit to fully form. The challenge of saving presents itself to everyone with a goal in mind.
As it is, people reason that they are unable to save because they don’t make enough. With minimum wage in the NCR averaging around Php 481 and Php 349 in provinces, it does make saving seem like a stretch.
As author and financial coach Chinkee Tan said “Never allow the lack of money to be a stumbling block.” Saving money begins with the mindset that you can save, and not with a larger paycheck. If you’re working a minimum wage job right now, it doesn’t mean that you’ll be working that job forever.
Building the habit of saving requires perseverance, especially as you may not have a lot to work with, in terms of money. Here’s a look at five ways that someone earning minimum wage can build their savings.
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Most people think that 10% or 20% of your monthly wage should go to savings. Before you say “that’s too much”, don’t think about the amount. Start by putting away spare change, or smaller loose bills that you end up with each day.
When your savings grow, so will the temptation to spend your hard-saved funds. You may want to consider putting the money you’ve saved somewhere you can’t touch it, at least until you can open a bank account. There are bank accounts with low maintaining balances, and some that eliminate them altogether, so do your research to find a savings account that meets your needs. If the big banks don’t have the savings accounts you need, check out smaller or rural banks.
Find a Sideline/Raket
If you make more money, you can save more. There’s no shortage of ways you can make a little money on the side to boost your income. For example, you can try selling load or home-cooked food to co-workers.
A sideline can even be something that makes use of your talents – if you’re particularly creative – you might even be able to turn it into full business.
Open a Bank Account
Keeping your savings at home makes for temptation. It’s ideal to open a passbook account at a bank and keep your savings there. That way, you can see how much your savings grow each time you make a deposit.
When you’re looking for a savings account to open, there are banks that offer savings accounts that have low to zero maintaining balance. For example, you can check out BPI’s BPInoy Savings , as it only needs a minimum daily balance of Php 500 if you want it to earn interest. There are other accounts out there with a low minimum daily balance requirement, but require a higher amount before they start paying out interest. But if you’re starting small, it’s more important that you have somewhere to put your money; the interest can come later as your savings have grown.
Debts can quickly eat into your savings. This includes borrowing randomly from friends, siblings, or other family members. Falling into debt when you are trying to save is counter-productive and may end up destroying all your saving momentum.
Debt can be avoided if you stick to a budget, and prioritize what it is you need to survive. You can eventually have debt, but it should be money borrowed to put towards things like further education, or a home of your own.
Keep Your Eye on the Goal
Once you’ve put away a certain amount, you start thinking about treating yourself to something. If you really want to build your savings, you should hold off on buying anything. Think about the bigger goal that you have, and let it be your motivation to hold off on splurging.
Having healthy saving habits in place now while you aren’t earning as much can build good financial discipline that will serve you well for years to come. This can be the foundation on which you build bigger savings even when you land a job that pays better, and is more fulfilling.