Jun 14, 2016

How Do You Start Saving Money When You're Poor?

This Washington Post article caught my eye a while back on Twitter, and I haven't been able to stop thinking about it.

The article is about how people who live in poverty, even in the United States, can't afford to buy extra when something is on sale, so they end up paying more for everyday items than those who have more money.

How to Start Saving Money When You're Poor

The example given in the article was about toilet paper, which made a lot of sense since everyone uses it, it doesn't go bad, and you don't use more just because it's available. The logic made me more trusting of the conclusion that "the poor pay more" per unit price than shoppers with more money: "The world, in fact, is full of opportunities to save money — if you just have enough money to access them" (such as a Costco membership to get access to bulk canned goods).

The article got me thinking: How do you start saving money when every penny counts?

It's actually the same solution for everyone who wants to save money: You find some way to cut back, and use those savings to build more savings.

For a more prosperous person, the sacrifice might be a daily Starbucks. For someone with very little money, the sacrifice might be eating beans and rice for a week. Money Saving Mom has a fantastic post on how to survive on a $30 per week grocery budget. She even suggests temporarily cutting back to $25 per week and using the $5 per week to build up a stockpile. Small amounts really can add up.

The bottom line is this: You have to make some small sacrifices now for your future.

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