How to Budget on a Low Income

Trying to make ends meet on a low income can often seem like the most complicated puzzle you have ever attempted. Often there is just too little space and more pieces that need to fit in such a small space. Learning to control every aspect of your income and expenses will help you budget on a low income and let you become aware of areas where you can trim expenses and earn more to effectively manage your money.

Find Support

As soon as you know exactly what your income and expenses are, you can start finding support programs. Take advantage of government and non-profit services. Most governments provide low income financial support programs including benefits, grants, loans and subsidies.

If you do not have the income for clothing, reach out to a local Salvation Army thrift store, St. Vincent de Paul’s or other charity to get help.

Need furniture? Did you know there are free furniture programs by many of these same organizations? For almost every basic expense there are support programs that you can lean on to ensure a certain quality of life.

Money Management

Even if you are on a low income, budgeting and living on a low income, effectively comes down to how well you can manage your money. No matter your income, knowing exactly where it is coming from and where it is going, down to the last penny can make all the difference whether you have enough money to feed, clothe and provide shelter to you and your family.

Start by listing your available income on a piece of paper. Next, simply start listing monthly expenses that must be paid. This part is very important. In this section, name it the “need to live” expenses. Only a lot expenses that you absolutely need to survive. This should include rent, groceries, and utilities only.

Next, list expenses that you need to spend on a monthly basis. This could include transportation costs to work, clothes, or extras like doctor visits. This is called your discretionary spending and is where most of your trimming can happen (except groceries).

The Frugal Life

If you are living on a low income, you will need to get into the habit of living a frugal life. Unfortunately, extras will not be able to be had until you are able to save up an emergency fund and a savings fund for these extras.

You will need to learn to budget groceries to the penny, and lean on all the assistance programs you can. Groceries are one of the largest expenses, but also the one where you can often get the most help. Reach out to local food banks, charitable organizations and government food stamp programs to get all the food you can for free.

If you do not, you are simply putting money down the drain. If you can shave $100 off your grocery bill every month by leaning on support systems that are meant to help you, you can put this money towards needs like clothing, transportation and other things that can make your life easier. Learn to start couponing and building meal plans that provide ‘just enough’ nutrition without overeating. It could be a great way to ensure a diet.

Only by a strict program of watching every penny spent, shaving expenses where possible and getting help where needed can you ensure your livelihood and live beyond a low income.

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