piggy_bank8th April 2016 –

Already I am starting to hear the critics and naysayers telling me I’m being unrealistic and that retiring early can’t be done on a low income.

That saving 50% of your income is impossible and unless you’re earning a six-figure income, most of the take home dollars you  earn goes straight into paying rent/mortgage, bills and everyday living expenses.

Well believe me, many of the highest wage earners out there still struggle to pay their bills, owe plenty on various loans, have virtually no savings, and never pay off their credit cards in full each month. So if you are earning $40,000 a year and saving 20%, you are already ahead of them.

Yes, it is a lot harder to save when you are not earning a high income. However, why enable people to make excuses for themselves and rationalize that financial independence is impossible just because they don’t make $100,000+ a year? Well I encourage lower income earners to be creative and not allow themselves to be confined within the boundaries that dictate how much ‘normal’ people spend on housing, food, transportation etc.

The answer? Find ways to create more money by thinking outside the square.

By making small changes to your lifestyle and spending habits, a 50% saving rate is quite achievable.

  • Save money on food bills by growing your own vegetables. It’s not that difficult and the results are fantastic. What you don’t use fresh, bottle and preserve, or swap with someone else for other food items like home-kill meat or homemade sauces, for example.
  • Buy a freezer (second hand of course) and stock it with your excess veges as well as the bulk meat you bought on special or were given as a swap for those extra veges. When you stop buying every item of your weekly food shop at supermarket prices you’ll defiantly notice the drop in your monthly food bill.
  • If you have a spare room in your house, rather than using it as the ‘ironing room’ or a place to store junk (which you should be selling on TradeMe or Gumtree if it’s junk and no longer needed) think about renting it out on Airbnb. Not only could you make a considerable amount of money renting out an extra bedroom in your house, but you also benefit by getting to meet tons of really nice, interesting people, from all over the World, who stay with you.
  • Or consider using your car and spare time driving for Uber. You only work the hours that suit and get to earn some extra cash using your car during the times it usually sits in the garage costing you money (insurance, registration etc.).
  • If you enjoy a drink or two, instead of buying all of your home liquor supplies, go ahead and make your own for a fraction of the cost. Remember, when you buy booze, a significant part of the price is tax. When you make your own, no tax. It’s pretty simple to make home brew beer, and cider is even easier. At around $2.20 a litre, it’s going to save you plenty over a year.

Every one of these ideas will make extra cash available for you to invest towards your financial freedom and early retirement. Ok, these ideas aren’t going to work for everyone but I wasn’t offering to come over and do it all for you, was I.

So dare to be different and come up with your own ways to either stretch out your current income or ways to increase the amount that you have coming in.

While your friends are flat-out spending and racking up the debts in order to remain working until they’re 65, you can be counting down the time to when you can get to spend every day of the rest of your life, doing exactly what you want to do.


4 thoughts on “How do I achieve financial freedom on a low income?”

  1. Hi! Found your blog through reddit, I’m glad I have another Aussie/Kiwi blog to follow! And congratulations on getting close to FIRE!

    I’m an average income earner but I’m able to save more than most of my friends because of mindful spending. These are great ideas you have here, looking forward to reading more about your journey.

    1. Hi J, hey thanks for the comment and checking out my blog. I’m glad you like what you’ve read so far and I’m just getting started lol. Yeah, I’ve never been a high income earner and I’ve only ever lived on what I have personally earned but through mindful spending (most of the time) and avoiding buying stuff for the sake of it (again, most of the time) I’ve managed to do pretty well. It’s only been the past few years that I’ve seriously worked on path to financial freedom so I reckon if I can do it, anyone can…..and it’s never too late. Thanks for coming on board 🙂 Martin – Get FIRE’d asap

  2. Hey, nice motivating post.

    It’s possible for anyone to achieve FI, if they earn enough to live on the bare basics. If we all make smart financial choices (finding value, buying 2nd hand etc), save as much as possible and make our money work for us. Like you say, there are always side hustles we can do too. We can achieve FI. Whether it’s $50k, $75k or $100k 🙂


    1. Hey again Tristan. I’ve never been a high income earner and have never reaped the benefits of having a couple-income so I reckon if I can do it, then so can anyone earning an average to above income. It’s all down to whether you are prepared to start using your ‘frugality muscle’ I think Mr MM calls it, and living within your means. And having a side hustle helps too.

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