When people talk about saving money consistently for a rainy day, most often than not the feedback would be “If I had that extra money to save, I would.” These are the people that pay their bills first and only use whatever balance leftover to pay themselves later.

I can seriously identify with this situation when I first started working after graduating with a Chemical Engineering degree years ago. My starting salary was RM1500 which is considered the average starting salary. After deducting EPF, income tax and SOCSO, my take home pay was about RM1200. This is the money I used to pay for my bills and other living cost. Whatever amount leftover at the end of the month will be my savings. Therefore my savings fluctuated every month. It was hard to meet my savings goal in this situation.

Earning RM1500 may not be considered low income to some people and for me it was acceptable back then. I cannot imagine how those earning below RM1000 can manage their money to make it stretch sufficiently. This is considered low income to me. So, I considered myself lucky to be earning above that. I had two choices, one was not to use up all of my income and to pay myself first and the other was to earn higher. Going with the first choice was practical as it was easily within my control.

How I survive and manage to save money

There were several factors that enabled me to pay myself first and save a portion of my take home pay.

• In the beginning of my career, I stayed home with my parents and hence did not have to pay rent.
• I used my parents’ old car to drive to work and only had to pay for the petrol. I did not have to fork out money to service a car loan.
• I had no subscription bills to pay like ASTRO, hand phone, magazines, internet line, etc.

• My employer covered my medical and dental bills. Lunch meals and work uniforms were also provided. So shopping for work clothes was unnecessary. I also did not waste money going out for lunches or coffee breaks.
• I did not go out much for entertainment preferring to stay home most of the time.

Most of my income went towards food or groceries, personal necessities, personal insurance, petrol and utilities. Hence, I was able to save money and invest it, albeit slowly.

I believe a whole book can be written when it comes to surviving on a low income. It is difficult but not totally impossible especially when you do not have a family to support yet. The important lesson for me back then was and still is “learning to live without”. My constant motto was and still is “Do not buy if you cannot afford it or if you do not need it.”

As the years go by, my earnings increased gradually but I still live the same frugal lifestyle. The pressure is stronger as I am now supporting a family. Although the income is higher, the responsibilities, bills and commitments are also much higher. For example, I have set a target to put aside about RM300, 000 as an education fund for each of my children. With three children, I have to accumulate RM900, 000 in total.

When there is a family to support, I consider RM3000 to be low income and insufficient to lead a reasonably comfortable lifestyle. What do you consider to be low income for a single person and for a family of four (husband and wife with two kids)?

Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

    12 replies to "How to Survive on a Low Income"

    • Shahrul

      1500 is quite low. I can’t imagine living with that salary now that I have lots of other commitments. In my current job, I get quite decent salary, more than 3000 ringgit but the stress and workload caused me to quit..huhu.. Thank God I have my internet business to cover some of my expenses.

    • carlisle

      I like Leong’s theory.

      I see myself blessed in a group of “okay” income earner, in which i would say ranging from RM5k to RM8k per month. The amount is “okay” for you to do a little bit of investment, a little bit of savings, a little bit vacation and also maybe a little bit for luxurious entities (branded accessories and gadgets). But i can say, stable income and dicipline savings will lead you to no where if you do not have time to spent on. As I am in IT support line, my job revolves around the clock. My mind is so tired when i’m not working and I often easily fell into my own little comfort zone. Practically I will have no time and interest at all to spend to do any self improvements, no time at all to even think about investing. My point is, even slightly higher income earner does not necessary be good, because time is so much more valuable than money. If lower income earner, with the right attitude and drive, and also ample time to experiment ways to generate extra income, I would say, this person has so much possibilities inside him. He will have no problem living a humble life, but at the mean time, trying every possible ways to gain more wealth and strive to be better.

      Respect and make full use of the personal time you have. I have finally leave my job ( and thank god I found another job which granted me with more personal time ) I seriously looking forward to the world of investing and be my own boss soon. My passion towards my own little goal is a little bit more defined each day. I felt earning money has more meaning now, as I am really striving to achieve my goal instead of working hard only to keep my job.

    • Jacquelyn

      Hi Leong,

      Thank you for the excellent tips and advice!

    • Au Kar Leong

      In my opinion,in order to overcome the fate of low income,the person must first has an ambition to success in life.He must has the burning desire to become rich.He must download the millionaire’s mindsets into his brain to set the pace to become rich.

      A low income earner must strive to increase his metaphysical(Skills,knowledge and experience) year by year.This can be done by investing time and some money on learning the following subjects:
      1.)Financial knowledge(e.g read the books like rich dad Poor dad,conspiracy of the rich,personal finance for dummies etc).
      2.)Selling Skills(e.g read the books like the art of closing sale & the psychology of selling from brian tracy).That’s right,try to shift your job to profit center job which directly bring in the profit to the company even though you hate selling.The reason is the rewards in selling is much higher than other ordinary jobs like clerk,admin,driver,
      3.)Investment Knowledge(e.g read the book trading for a living by Dr alexander elder and candlestick related books before you start investing).You must learn to read the chart before making any investment decision.Don’t just rely on the financial consultants’advice as you must know the rule:”Nobody care about your money more than yourself!!!”

      Based on these guidelines,the law of attraction one day will lead you to the road of financial freedom.What you need is persistence,discipline,burning desire to change your life and patience.

      If you aim to change your life,start to associate with positive and successful people.Spend your scare time on more productive activities like reading and listening to motivational audio cd to keep yourself pump up.Stay away from time consuming and low value activities like watching drama series or mix around with low value people who are negative,with low financial IQ,love fooling around etc.

      That’s it,It’s time for paradigm shift!

    • Chong Kong Hui

      Today is labour day. Probably most people earning “low income” are labour. However, knowledge workers are “new type of labour” as these people still struggle in life financially.

      Why? too many lifestyle expenses. Too much wants than needs.

      Just re-read the Millionaires Next Door today. If you haven’t read this book, please do so..

    • Chong

      I agree with Sayeed. The phrase low-income will mean differently to different people with different expenses. But I would say that nowadays with both parents working, it is common to need 2 cars since working time/places may be different. Hence more commitment to pay. I would say a family income of RM5,000.00 would be just enough to cover necessities as follows:-

      housing loan – RM600.00
      2 car loans – RM1000.00
      household expenses – RM1000.00 (including water, electricity, maintenance charges, home dinner)
      insurance – RM800.00
      petrol – RM500.00
      handphone bills – RM200.00
      food – RM600.00 (for breakfast/lunch when it’s not possible to eat at home)
      Total = RM4700.00
      Monthly savings = RM300.00

      If you are able to save RM300 per month, that would be RM3600 a year, not much but at least something. After accumulating the savings for a few years, then can consider to make your money grow with other investments.

    • 1step@1time

      Hi, this is a great article that teach everyone that at any income we can always save some money. I really like to know how long it took u n farulg to accumulate 900k for children education. I still have no kid yet, but I believe this method will help me to prepare before starting a family.

      • jacquelyn

        Hi Zila,

        The length of time to save and accumulate money will differ for each person. The path I took is to start saving early, i.e. right after the baby is born. Invest the money to get reasonable returns, e.g. ASB. Whenever there is extra money from other sources, for example from bonus, put that money to work for you. Starting early always work as time is on your side.

    • Chai Tzong Shiun

      I think the best way to save for children education fund is through life insurance. At least you can decide how much is the amount you need and save a little bit monthly while accumulating higher compound interest as compare to bank. And if unfortunate event occur, the education fund is still there. Else, your saving for that will stop half way.

    • Sayeed

      I don’t believe that we can set aside 5k a month to accumulate the 900k in next 15 years is a good strategy if you are leading your own family. A normal family would need a house, car, phones, cable TV, insurances, kids schools & tuition fees if not baby sitting, meals, clothes and utility bills to be paid.
      Now when it comes to low earner and high earner, it is still subjective, a person earning $3000 living with parents, driving a kancil or even a motorbike, get kid to be babysit by parents and eat at parents home, would be able to save easily $500-$600 monthly, but the same income living in own house definately would struggle.
      Same goes to someone with higher payscale, if a person earns 8-10k a month lives in a flat paying $500 a month compared to same payscale stays in a terrace paying $1000 a month, the saving would be different to them.
      So whether low on income or higher on income, and either earning $3k or $8k, people can be equally poor or equally rich, depends on their financial knowledge and lifestyle, but the advantage is surely on the one earning more!!

    • farulg

      I did exactly the same thing. I was earning roughly 1400 take home, spent 250 on rent and not much on anything else. I was also doing side jobs and reselling computer stuff to support myself.

      Now I’m in the same boat as you, saving up almost 900k for the children’s education. Still a long way to go…

    • Lai Seng Choy

      I practiced the same as you when I was a fresh grad years ago, Jacquelyn. During those years, I managed to accumulate my deposit for my first house. I continued to stay with my parents, rented out the house and save every cent I can. I fully settled the loan after serving it for 5 years. I moved into my house with totally debt free. What a wonderful feeling.

Comments are closed.