It’s quite normal to wonder how to budget on a low income, after all, even people with heavy paychecks still find budgeting a wholesome stress.
But the fact is, budgeting is important no matter your income.
As in, you can still benefit from budgeting no matter the pennies you earn in a week, in a month or bi-weekly.
Budgeting is important for everyone as long as you work hard for the money you earn and as long as your resources, is in, any sense, “Limited”
There are very few people in this world who bathe in unlimited resources. They have enough money to not even bother with the word “budgeting”
But as long as you’re not in that category, you have to budget your money so that you can properly benefit from your hard work.
Cash is hard to come by; when you have the benefits of earning it, try to make the most out of it- Use it to make a difference in your life!
When you tell people with a very low income & living paycheck to paycheck that what they need is to start a budget, they freak out and tell you that they need just more money and not a budget.
But that is not correct!
How you spend a penny determines how you will spend $1 if you finally have it.
You can actually create more money for yourself when you manage the little that you earn.
Everything is about determination. Determination is the drive that you need to step up your finances to grow without even earning more.
Starting and sticking to a budget, especially mapping out one that will help you live below your income, is the first strong step towards generating more money for yourself.
You can start out today!!!
So how do you actually budget on a very low income?
The first thing you need is determination!
Determination is all the drive you need to create and master a budget that will change your financial status.
If you don’t like the fact that you’re always broke, you have low funds and that you live paycheck-to-paycheck, then you must muster the courage to want to do anything to change it as long as it is within your power.
Here are simple steps you need if you truly want to budget and a very low income and make the most out of it.
1. Follow no budgeting rules
Budgeting on a very low income is all about saving hard and making sure that every single dollar is spent wisely. I mean, no room, no chances for unnecessary expenses.
In this case, you can just assume that there are no budgeting rules to follow. You are out to follow what works for you and the income that you earn.
As long as you are determined and you know exactly what you want and what you want to change, then assume that there are no budgeting rules.
It will save you time searching, failing, starting over and then finally getting tired of budgeting.
In simple words, just go straight to the point! Pick your pen and your paper, put down numbers and be sure you are crafting a budget that will help you live below your means.
2. Move to a low-cost community
To be more realistic, your income determines which part of your States you should be living.
You’re not rooted to a place! if a place is not favorable to your income, “move” and quickly too- because no matter how much you earn or how hard you budget, as long as you live in a place with a fixed cost range, then you are permanently at loss.
There will be no improvement for your finances and you certainly won’t be able to live above the paycheck- paycheck circle.
3. Start weeks of no-spend challenge
A no spend challenge means you have decided not to spend money in a day, in a week or in a month.
If you are a newbie to no-spend challenges, you can start by picking a day, then gradually stretch it to more days and then to a week.
I think trying a no spend Challenge for a week is more realistic and much easier to take at least in every month when you are a low income earner.
Trying days or a week of a no spend challenge is the best way to live below your means and save as much money as you can towards other income-generating Ventures.
4. Budget for only basic necessity
If you have the proper determination and you keep it very strong with purpose, then you will understand that as a low income earner, you should not be thinking of enjoyment.
Nobody is saying that you should stop thinking of wanting a better or pursue a comfortable life- No, that is not what I am trying to say. I am trying to tell you that it’s not time to think about wants and comfort.
It is the time to stretch yourself as hard as you can so that you can finally attain financial freedom while you are still young and healthy and within a time range.
In other words, you should draft a budget that contains only your basic needs. When I say your basic needs, I mean those that you need to survive like food, transportation and housing.
As long as you have some pairs of dresses, forget about buying clothes, forget the cable subscription, go for the $5 meal plans, skip the gym membership, use more public transportation and save money on gas.
5. Use brutal money saving tricks for your basic Utilities
Whatever basic utilities you live on, learn brutal money saving tricks for them.
- Learn how to save money on electricity.
- How to save money on gas.
- How to save money on phone subscription.
- How to save money on food.
- How to cut down your housing bill.
- How to cut costs on insurance plans.
Although your basic utilities stay the same or almost the same every month, you can still wingle some rooms for saving more money by choosing the place you live and the choices you make.
6. Save for a side hustle
Increasing your income should be your ultimate goal when you live on a low income.
And then, the ultimate goal while budgeting on a low income is to save enough money so you can afford to start a side hustle that will generate more income for you.
There are several side Hustle you can start; from those that require no money, to those that require little funds to start.
For now, you should concentrate and start side hustles that require little funds or no funds at all to start.
You can even start investing every month by budgeting some money towards the investment.
If you have big plans for yourself and you intend to make enough money so you can retire early, then starting a side business is the real deal.
7. Regularly review your budget
Be of the habit of regularly reviewing your budget when you have one place.
Your finances could take a downward dive if you don’t constantly review the budget you have in place.
Just like any other budgeting method, reviewing is the key to make them work and it becomes more imperative when you are budgeting on a low income.
During reviews, check whether you’re actually spending below your income, adjust accordingly, increase, decrease and delete where needed.
This step is useful when you are dealing with a fluctuating income.
These are quick, helpful tips that will help you properly budget on a low income and finally build enough funds towards financial freedom.