how long does it take to save up for a car on minimum wage

Most of us want to save money so we can build wealth and plan for the future. We have goals we want to reach (like traveling) or things we want to buy (like a dream home). However, this can seem impossible when you’re surviving on low income.

According to CNN, 25 million American households are living paycheck to paycheck. When money is tight, saving any amount can be the last priority on your list. You’re just trying to get by.

So how do you save more money when you’re making minimum wage? How can you reach your financial goals on a low income?

When it comes to finances, it’s important to not only think about the now but also the future. Even if you’re earning a minimum wage, you can still save little by little. Here’s how:

1. Tackle High-Interest Debt First

In order to start saving more, you have to tackle your debt head-on. Specifically high-interest rate from personal loans, or credit cards, because they force you to pay outrageous fees and interest charges.

When paying off debt, you need an attainable, yet challenging plan to pay it off. Start by prioritizing your debt so you’re paying off the ones with highest interest first.

Then, as you go forward, avoid accumulating any more high interest debt, especially credit cards.

2. Cut Down Your Biggest Expenses

Trying to save money when you have low income can be very difficult. Sometimes it feels impossible to cut down even a dollar or two every month.

Aside from the usual money-saving ideas, like cooking meals at home and canceling your cable bill, what more you can do? Instead of trying to cut back your small expenses, focus on the larger ones so you can make more of a significant impact.

For most people, housing costs tend to be biggest part of their expenses. If you’re renting, consider downsizing to a smaller home or living with roommates.

If you own your home, take at look at whether or not refinancing your mortgage for a lower rate would be beneficial. You can also rent out a room or parking spot for additional income.

And I know Connie just said to work on the big stuff, but I argue that you need to cut out the small stuff too, especially if the costs are recurring like a cable TV bill. Do you absolutely need to pay for it? There are many ways to reduce the TV subscription costs, and it only takes minimal effort for a sizable benefit.

3. Take Advantage of Free Money

Take advantage of “free money” when you can. As a family with low income, you may qualify for the earned income tax credit (EITC). According to the IRS website, the EITC, can be a large refund on your taxes, helping you keep more of what you earned. Sometimes even as much as a few thousand dollars.

You should also look into a 401K at work and see if your company matches up to a certain percentage of your contribution.

If they do, you should take advantage of it and start saving as much as possible. The company match is basically free money that will help you save towards retirement.

4. Keep Your Budget Lean

To save more, you have to take control of how much you spend. Choose the categories you want to indulge in, and keep the rest of your budget as lean as possible. You’ll have to make sacrifices but it’s not impossible.

Just learn to spend in moderation. For instance; cut back on how often you dine out. You can still enjoy a nice meal at a restaurant, just not multiple times a week.

5. Start a Side Hustle

If you can’t cut costs anymore than you already have, consider diversifying your income by starting a side hustle to earn extra money. Aside from your full-time job, you can get a job on the side to provide another income source.

Many side hustles can be done right from your own home in your spare time. Think about what you’re good at doing, what kind of hobbies can earn money, or what you already enjoy that can be turned into a side job.

Popular side hustles include freelance writing, data entry, and graphic design.


Saving money when you make minimum wage is certainly hard but can be done. It’s important to understand what your priorities are, and create a values-based spending and saving plan.

Once you do, you’ll be smarter and savvier with how you spend money and ultimately, be able to save more.

Want more tips? Start a budget.

Budgets, money tracking, and careful thought about your spending are most important when you have very little money. Thinking you’re too poor for a budget is a way of avoiding tough decisions. But making those difficult choices will actually help you feel more in control and happier about your finances.

If you’re living on the financial edge, try these budgeting strategies to make sure that you control your money, rather than vice versa:

1. Make friends with your calendar. It doesn’t matter whether you use the kitten-themed wall calendar you got for Christmas, a web-based calendar, or the calendar on your phone—but you must begin to organize your money according to time. Record when you receive your paycheck, when bills are due and when automatic payments are made. This can help you to find the thin spots in your finances during the month.

From there, you can often request changes to due dates in order to make certain that you have the money when you need it. For example, if you know that having “extra” cash in your checking account will be too much of a temptation, move your bill due dates to coincide with your paychecks, so that any money leftover after bills are paid isn’t needed for the next round of expenses.

2. Track your spending for a month. Your next step is ridiculously simple, and yet it can be very difficult to do. For an entire month, record every single cent that you spend. Whether you go low-tech with pen and notebook in hand, or high-tech by using a free money-tracking program on the internet or your smartphone, a month of tracking will give you a much better idea of where your money goes.

Another positive side effect of tracking your spending is that it gives you a moment to think about your purchases before you make them. You might just walk on by the coffee shop when you realize you don’t really want to write down the cost of $4 coffee on your tracking sheet.

3. Cut judiciously. Once you know why there’s too much month left at the end of your money, you’ll know what to cut out of your monthly expenditures to get back to living within your means. Some cuts will be easy. Restaurant meals and snacks can be cut out in favor of cooking at home. Insurance costs can be made more manageable by raising your deductibles. Services you don’t use—like that gym membership or the extra data plan on your phone—should also be on the chopping block.

But don’t forget about cutting costs in basic areas, as well. You can often lower your utility payments by making sure you turn off lights and unplugging power vampires, for example.

4. Start planning for saving now. Having an emergency fund is an essential part of being financially healthy, so start to plot a path to save for it even if you can’t spare the change right now. That way, you can start adding to savings as soon as you don’t run out of paycheck.

5. Increase your income. If you have cut your spending to the bone and are still having trouble making ends meet, then it’s time to consider other sources of income. That could mean asking for overtime at work, starting a side hustle, selling off some of your possessions, or looking for more lucrative work.

If you want to live within your means, you need to be mindful of your income and spending. Otherwise, it’s impossible to get off the cycle of living from one paycheck to the next.

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