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It is not an exaggeration that if there is a list of top 10 “hardest to master” habits, then spending and saving habits are among them. Yes, it is hard to save but it is even harder to restrain yourself from spending too much. Not surprisingly, your spending rate and saving balance are closely related, and the rule is very simple: the more you spend, the less you save. Even though almost all of us are well aware of this rule, almost 62% of Americans have under $1000 in savings, and 1 out of 10 does not have any savings at all. Some would argue that savings balance is also closely related to your annual income, and if you earn less than $30,000 a year, then it is almost impossible to save. While it is hard to disagree, there are two key habits you can develop to save money even with a low income.

1. Don’t underestimate small savings

Never underestimate small savings. Yes, $1 a day sounds ridiculous. What can you get by saving just $1 a day? Well, simple math shows that in a non-leap year, you would have $365 in your savings. This is not a lot, but it is quite something. I bet you can do lots of things with this money. However, the most important part is not really the amount you saved but the saving habit that is developed during this process. Once you see progress, you tend to repeat behaviors, and the following year that savings could easily double. So, even if you can save $1 a day, do it. You will be pleasantly surprised with the results.

2. Have a spending plan

You can’t control your spending unless you have a plan. Remember how many times you went to a nearby market without any clear plan as to what to buy and ended up having too many unnecessary items in your basket. Yes, this happens to all of us, and that is why almost 40% of food in the United States goes uneaten. That is a lot. That basically means that there is a big chance that you did not really need almost half of the items you bought. And the same goes for everything else around shopping. This does not at all mean that you should only eat rice and drink water, but having a clear spending plan will help to increase your spending balance significantly.

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