Saving money when you’re already struggling with a low income can feel both demanding and overwhelming. In 2025, with the rise in inflation and an economy difficult to deal with, saving may feel like a distant and impossible dream. But what if you don’t need to earn a six figure salary or have a high income when it comes to saving money. That’s exactly why the Low Income Savings Challenge exists, to show you how even the lowest of income can grow into something meaningful with the right plan and strategy over time. This article will help you explore the dynamics of money-saving with a low income and ways to save money through realistic and practical steps.
1. Pick a Manageable Goal
Many people start their year with big and bold resolutions with huge figures like saving $5000 or $10,000 but with low income, you’re already living hand to mouth and saving seems difficult and daunting. When a goal is impossible to achieve, you’re more likely to leave the challenge mid way, which is exactly why having a manageable goal is an important initial step when starting a savings challenge.
If you know you can set aside $10 each week, make $500 your end-of-the-year goal and if you can save around $20 each week, you can aim for $1000 over the year. A smaller and achievable target can make you more motivated and consistent to work towards your goal as compared to unrealistic and high expectations for yourself.
2. $1–$5 Increment Method
For one of the most simple and effective strategies to save money, go with the increment method which is all about starting easy and gradually increasing the amount. For week 1, save $1, $2 for week 2, $3 for week 3, and so on increase your amount each week by 1 dollar.
By the end of 52 weeks, you’ll have a total of $1,378 and the best part is you’ll hardly feel the demanding phase of putting aside money. Moreover, once your habit strengthens to save money during the easy initial phases, you can easily set it aside as well when the amount grows. If you’re nervous about the higher weeks toward December, you can always adjust the pace, for example, increase by $1.50 every two weeks instead of every week, or cap your weekly savings at $25 and just keep it steady.
3. “Round-Up” Savings
If you see yourself as someone who pays attention to the little leftover money, go with the rounds-up saving method which is all about saving leftover rounded-up money after purchasing something. For example, if you buy your morning coffee for $7, round up to the nearest $10 and save $3.
While this may seem invisible and useless at times, these small figures can gradually add up to something huge over time, making this option considerable for those with a low income. If you prefer an automated process, some bank account apps even offer a “roundup” feature that automatically transfers the difference into the savings account, making it effortless and helping you avoid the temptations to spend more money. Moreover, if you prefer to keep cash, you can keep a jar or an envelope named “Savings fund” at home and every time you make a purchase, put the difference in the jar or envelope.
4. 30-Day No-Spend Challenge (Quarterly)
This one might sound intense and more demanding than the rest of the methods but it can be quite effective in helping you make your money grow. Four times a year, whether it’s March, June, August, November, or any other month of your choice, aim to spend only on needs and essentials and avoid spending on wants and non-essential activities or items.
Essentials can include rent, utilities, groceries, or bills while non-essentials can include eating out, coffee runs, entertainment, or subscriptions. A no-spend challenge can push you to get creative with what you already have instead of relying on money to help you spend on activities or things you enjoy. For example, you can start making coffee at home and experiment with the flavors and recipes instead of spending on it.
The money you save by avoiding spending on wants can go straight into savings, helping you grow and build the amount with much more effectiveness.
5. Side-Hustle Savings Rule
When you have a low income, side hustles can be one of the most powerful sources to give your savings a boost without affecting your regular budget. A side hustle can be anything that brings in extra cash such as babysitting, pet sitting, freelancing, selling second-hand items, or even offering pick and drop or doing deliveries.
The side-hustle savings rule is putting in at least 50% of the extra money you earn directly into your savings challenge fund. Since side hustle money is often unexpected, you won’t feel as much pressure when setting it aside. For example, if you make $40 from helping a neighbor with yard work, save $20.
You can also choose to save 100% of your side income and live entirely on your main paycheck. This method is particularly effective because it doesn’t take away from your regular spending budget and can quickly grow your savings without feeling like a burden.
6. $20 Bi-Weekly Commitment
This method is straightforward and predictable which makes it easier to stick to. All you have to do is commit to saving $20 every two weeks, which is less than $1.50 per day and can be manageable even when you are on a tight budget.
If you follow this for an entire year, you’ll end up with $520 in your savings fund. This amount might seem small but it can be a great starting point for an emergency fund or to pay off a small debt. If $20 every two weeks feels too much at first, start with $10 and increase it when you feel comfortable. Setting an automated transfer right after payday can also help you avoid the temptation to spend the money instead of saving it.
7. Cash-Only Spending for One Category
Sometimes it’s easier to control spending when you physically see the money leave your hands. Choose one category of your expenses such as eating out, coffee, groceries, or entertainment and decide you will only use cash for it. At the beginning of the month, withdraw your budgeted amount in cash and when that cash is gone, you stop spending in that category until the next month.
Any cash left over at the end of the month goes directly into your savings challenge, for example, if you set aside $60 for eating out but only spend $40, save the remaining $20.
This approach makes you more conscious of your spending because handing over cash feels more real than swiping a card. It also gives you a visible reminder of how much you have left for that category, helping you avoid overspending.
8. Track & Celebrate
Tracking your savings progress is an important part of staying motivated with the savings challenge. You can use a notebook, a savings tracker, or even an app to record every deposit you make.
At the end of each month, check your total savings and acknowledge your efforts even if the amount saved is small, it is still progress and worth celebrating.
You can also set mini-milestones to keep yourself excited about the challenge, for example, when you reach $100 saved, treat yourself to a free reward like a homemade dessert or a movie night at home and when you hit $500, you might print out a small certificate for yourself or share your achievement with a close friend or family member.
Conclusion
Saving money on a low income in 2025 is not about sudden large changes or making your life unnecessarily difficult. It is about small and manageable steps that you can keep up with over time. This challenge is designed to give you different options so you can choose the ones that fit your lifestyle and budget the best. Whether you start with rounding up spare change, committing to $20 every two weeks, or taking on a no-spend month, each step you take, can bring you closer to your goal. Even if the amounts seem small, remember that saving is about building a habit and stay consistent with it no matter what.