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Ineedtoknow594's avatar

What's the best way poor people can save money?

Asked by Ineedtoknow594 (92points) September 6th, 2008
Observing members: 0 Composing members: 0

28 Answers

JackAdams's avatar

I just KNOW this is gonna be interpretted as a wiseguy answer, but if they had the wherewithal to save money in the first place, they wouldn’t be “poor.”

The reason they are poor, is because they CANNOT save money.

MissAnthrope's avatar

@JA – Some people are so poor that what they make just barely covers expenses. Keep in mind that minimum wage has hardly kept up with the rising costs of gas, food, utilities, medical care, child care, etc. Not everyone has a high school diploma or college degree, which certainly limits the amount they are able to earn.

Personally, I am terrible at saving (and am technically a poor person), so I have no suggestions.. I am, however, looking forward to seeing what other people say.

JackAdams's avatar

Same here.

buster's avatar

Open a savings account. If money is in my pocket I spend it especially if I have been drinking. If its in my savings account I don’t spend it. I hate going to the bank or doing errands of any kind so I rarely take money out of my savings.

greylady's avatar

1. Cook from scratch, eat as a family if you have a family- avoid cooking a separate meal for each person. You and your children do not have to allow yourselves to be fussy eaters. Determine to “eat out” twice a month and set the dates ahead.
2. Entertain yourselves at free or low cost museums, parks, nature walk areas, etc.
3. Cut down on clothing expense by using your clothing longer, shopping at yard sales and thrift stores. It is fun to have different clothing, but it doesn’t always have to be new clothing. Trade clothing with neighbors or friends who have children bigger and smaller than your children are.
5.Don’t allow yourself to “impulse” purchase anything. Write it down, go home and research the item, and if after a week or two you find that you really need the item, can afford it, and have room for it, then buy it if you have the cash. No buying “toys” on credit!
(I have more, but will wait for other comments. These, so far are how I, myself, live.)

Snoopy's avatar

to add to greylady’s suggestions, if I may….

6) Dump the credit cards. Cash spending only has been proven effective as a way to get you to spend less money.
7) Have a shopping list and stick to it…...avoid impulse buying.
8) Understand that there are “needs” and “wants”. Buy only things you truly need….
9) Pay off your debts so you aren’t giving your extra money to the bank/credit company

susanc's avatar

8) Never, never go to the movies.
9) If you drive a car, figure out how not to own one.
10) Have potluck dinner parties at your house. People always
leave food behind! But mainly, you get to have a great time
and no one has to spend much.
11) Sell stuff on craigslist regularly. Anything you don’t want any more.
After you get the hang of it, start buying stuff and then reselling it
on craigslist. It’s a little business that makes
money out of, essentially, nothing. Just saving money won’t pull you
out of poorness. You have to generate the stuff to make you
actually comfortable.
12) Have a cushion account and do not touch it. Just continue to look at
that bankbook and feel that delicious security and pride. If you have this
you’re not really poor any more. A cushion allows you
to live non-fearfully.

I can’t believe I know all this stuff. I have a damn trust fund.

greylady's avatar

We are doing great here!

13. Write down everything you spend money on. Everything! for one month. Review at end of month to see what was necessary and what was “wasted” money. Each month you should find yourself getting into better spending habits.

shilolo's avatar

Make it a point to save a little bit every month into your savings account (like Buster said). Even if it is only $5, getting in the habit of saving money is a self-fulfilling act.

Also, stop buying $3 lattes every day (if you are). Making your own coffee will literally save you hundreds of dollars a month if you ditch the Starbucks habit.

susanc's avatar

14. Spend whatever you must spend in order to
quit smoking cigs. It’ll be cheaper in the long run – and also, without cigs
there’s more likelihood of having a long run….

loser's avatar

Is this question an oxymoron?

Snoopy's avatar

14a.and saving on medical bills

Snoopy's avatar

15) Save on transportation costs. Use public transportation. Combine trips. Ride share.
16) Keep kids healthy. Enroll them in SCHIP. (State Children’s Health Insurance Program)
17) Education. GED, trade school or college.

greylady's avatar

# 17 should be in all caps!!

Snoopy's avatar

EDUCATION!!!
:)

susanc's avatar

Go see the movie The Pursuit of Happyness. It will make you very tired, but
it’ll also make you feel like your plight could be much, much worse (I hope).

But, of course, see Suggestion #8 above, don’t go to see it in a movie theatre.

greylady's avatar

Often, once a person realizes that he doesn’t need “stuff” and matures past the need to be wasting money on his/her ego, (s)he finds that (s)he is not anywhere near as poor as they thought they were, or used to be before they learned to control their money.

artificialard's avatar

There’s a popular misconception that only people making low salaries are ‘poor’ – but that’s not true. In fact there’s people making from 70 to even 200 k that are living paycheck to paycheck. I really had no concept of proper finances until I started reading this blog: Get Rich Slowly (no relation).

It’s really good at advocating some key concepts:

-Track your spending to…
– Spend less than you earn this sounds simple but isn’t practiced by a lot of people
– Reduce unnecessary spending and recognise the difference between actual wants and needs

- Set realistic financial goals by…
– Learning about the value of compound interest, both in saving and in your debt

- Reducing your spending is the same as increasing your income (and vice versa)
– Credit cards should never be used for funds that you don’t have and should either be paid in full each month or not used at all. If you’re in credit card debt now make it a priority to pay it off ASAP

It’s basically all about getting into some better habits about spending and money, then deferring some of that spending for a better financial future, through the benefit of compound interest/saving. It doesn’t have to be just this blog, there are many others that basically say the same thing but it’s good reading to get the principles of personal finances across through different examples and dimensions. You may not make it today, next month, or even in a year, but if you practice sound financial planning in a few years or decades you’ll be far richer than you imagined.

Some of my practical tips:
– Don’t buy any non-essential item the first time (clothes, books, hobby stuff, etc.) Write it down, wait 1–3 weeks and then think about it. I frequently don’t want it after that!
– Reduce eating out at all costs. Tell friends about your effort to put into savings if your feeling social pressure.
– Do whatever you need to do to avoid unncessary fees. i.e. Be early to avoid late fees, use online billing instead of checks and stamps, etc. Most fees are pure waste, avoid them!
– Take a look at subscription services, this is where you need to be most ruthless as those savings/losses continue to accumulate overtime. Reduce/switch phone/cable, memberships should be very, very closely looked at.
– Libraries! You pay for them through taxes! Use it! Or look at used stuff online or in stores, there’s rarely a reason to buy books full-retail. Actually that goes for many comparable goods.
– Don’t try to keep up with the Joneses, just don’t. You’ll never surpass them until you realise you don’t need to.

artificialard's avatar

I forgot to add that developing a frugal attitude reaps incredible benefits in savings. Skimming a lot of money-saving tips and articles will garner specific things (i.e. skip the latte, pack your lunch, buy in bulk, etc.) But it’s not so much each individual thing that you do so much as adopting a frugal money-saving attitude and integrating it into your liftstyle.

And each person’s values and sacrifices will be different but being constantly aware of where you can save money, be it 5 cents or 5 dollars over the long-term adds up if you apply that principle in your daily life.

marissa's avatar

I have read through all the answers and there is great advice. I will add another helpful thing. Spend the money on a Sunday paper. It lists manying free services and events that are going on in your community. It also has coupon and ad inserts. Use coupons/rebates, as long as you use them for things you actually use, it saves you money. Take a look at the coupons and the weekly ads, some will match up for big savings that very week, others won’t match up well until 3 or 4 weeks later. National chain drugstores are huge on store rebates now, they usually have ‘free’ items every week. Just this past week, I went to the grocery store and the total was over $350 before I used coupons after coupons, it was $106.

Response moderated
Cat4thCB's avatar

when i was growing up, my father developed expensive health problems. he needed many expensive medications, trips to doctors in other states, multiple month-long stays in the hospital. insurance did not take care of it, mostly because he had none. he ran his own company (successfully) and kept putting it off. we were not poor. we were destitute. utilities were often disconnected. we used food stamps. the bank regularly threatened to take the house.

my father still has expensive health problems that require expensive medications and hospital stays, but by being super frugal they can now breath a little easier: a household repair is not a devastation, all utilities remain connected, and holey socks can actually be replaced.

my point is this:
1. anyone can get in financial difficulty, even well-to-do college graduates.
2. being poor has nothing to do with the inability to save. savings are quickly eaten up during a crisis and near to impossible to replenish after having nothing left after food, utilities, rent, etc.
3. not having money is frustrating and often demoralizing (especially when some flippantly reply that all one has to do to crawl out of the hole is to save one’s pocket change).
4. getting money will take time
5. resolve yourself that getting money will take time
6. being poor is not a character flaw
7. although difficult, keep a positive attitude to stave off frustration (a negative attitude will probably lead to self-medicating with things that cost money).

THESE ARE SOME OF OUR MONEY-SAVING STRATEGIES:

make a list: list all home and appliance repairs and items (large and small) that you know you will have to fix or purchase. but beware the “it’d be nice” attitude, i.e. “the fridge is running fine buy it’d be nice to have one with an ice maker.”

always keep a grocery list so you can match deals with coupons.

research everything: there is no better way to find those so called ‘hidden costs.’ do extensive research on everything you intend to buy, be it an office chair, a phone service, or a major appliance. keep track of the best stores that have your item (internet and brick & mortar) and their prices (including shipping/delivery).

do research on repair parts and labor, too. a friend bought an inexpensive car that is now sitting in the driveway until he can save enough for the foreign parts and exclusive labor.

read and understand the fine print: know what the small print is saying about your money. interest rate changes, late fees, cancellation fees, shipping, returns, restocking fees.

i’ve been a signature away from spending a big chunk of money until I read the fine print. i had to wait a bit longer, but i later found the same item for less money.

shop multiple stores: over time, we have found the stores with the best prices. one store may have everything we need, but it would be more expensive. we shop at a discount grocery store (Aldi), a discount bulk grocery store (Bent & Dent), a local butcher, a dollar store (Dollar General), and look through big box store fliers to see which has the best deal—when combined with coupons—on whatever is left to buy after the discount stores.

it may seem time consuming to go to so many places, but it’s really not. most of the stores are in town or local. for the others—because we always have a list and know what we need—we shop when we coordinate errands for that area. the savings far outweigh the seeming inconvenience. why pay $1.49 for celery on sale at Piggly Wiggly when i can get it at a discount grocery store regularly for 79ยข ?

don’t look through catalogs: you have no money so will not be able to buy anything from the catalog anyway. seeing all the cool and pretty things you don’t have and cannot afford will only make you feel deprived and frustrated.

check your attitude everyday: it is too easy to become depressed when money—the not having it, the not spending of it, and the bill collectors that want it—is all you seem to think about. so, every day, find something positive to do or think about.

which leads to the next strategy . . .

budget some fun: it’s the best way to keep up your positive attitude, especially when you hear your kids laugh and giggle. after you’ve spent money on fun, don’t feel guilty about it.

Snoopy's avatar

@Cat4thCB GA!

Could you give more info on the “Bent & Dent” bulk grocery stores? I googled and couldn’t really find anything. It seems more of a type of store as opposed to an actual chain (like Aldi)....is that correct?

artificialard's avatar

There maybe such grocery stores but not where I live. However there is always a ‘sale produce’ cart at virtually all the grocery stores I go to that has slightly damaged fruits/vegetables or ones that are set to expire. Makes no difference if you’re having them in the same week and any bruises are easily pared away…

Cat4thCB's avatar

@Snoopy here you go! hope you find something in your area.

Grocery Outlets in Arizona, California, Idaho, Nevada, Oregon, Washington
http://www.groceryoutlets.com/storefinder.aspx

Directory of discount grocery stores by state
http://www.andersonscountrymarket.net/directory

United Grocery Outlets in Tennessee, North Carolina, Kentucky, Alabama, Georgia
http://www.myugo.com/locations.html

state-by-state listing of discount stores with maps, hours, phone numbers
http://gnivas.com/food/salvage-and-bulk-food-stores-savings-havens/

Save-A-Lot grocery, similar to but a bit pricier than Aldi
http://save-a-lot.com/

my favorite, Aldi
http://www.aldifoods.com/index_ENU_HTML.htm

answerjill's avatar

I set up an online savings account and set it up so that it takes out a consistent amount of money each month from my checking account. I have it set so that it does the transfer twice a month, at the time that I get paid. This works particularly well if you are saving up for a big purchase. I also use freecycle.com to get stuff for free and another website to barter things that I have for things that I need.

answerjill's avatar

I also avoid credit cards and stick to cash and debit cards.

ageofknowledge's avatar

Best way poor people can save money is not to have children they cannot afford to raise.

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