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Do you know how to manage money without money to manage? Here are 13 awesome tips for managing finances on a low income. Many people live paycheck to paycheck, wondering where their money goes each month. It can be difficult to get ahead financially when you’re just trying to make ends meet. Managing finances on a low income is tough, but there are some things you can do to ease the burden and get on track to a better financial future. Here are some tips for managing finances on a low income.
Make a budget and stick to it
Creating a budget is an important step toward financial stability and security. To get started, total up monthly income, list estimated expenses, and prioritize payments for necessities. Once the budget is finalized, review it frequently to stay on track with spending and make mid-course corrections. Tracking expenses regularly will help ensure that you stick to your budget and save more money.
How Do I Budget With A Low Income?
Track Your Spending to Manage Finances
The first and most important step is to track your spending for one month so you have an idea of where your money goes and how to go about managing finances. It is not something most people can do in one sitting. I honestly thought that I would remember how much goes where, but besides rent, I was pretty much drawing a blank. On a calendar, write the bill and amount and have it repeated monthly. Note that some companies bill on a 28-day cycle!
To begin documenting your spending habits, get a good budgeting app, or go old-school (no, not pen and paper!!) and just use your “notes” app on your phone, and every time you buy something at the store, pay a bill, choose a new “subscribe and save” on Amazon (more about this another day), or find something on Facebook Marketplace – take out your phone immediately, so you will not forget – and enter the date, item, category (optional, but helpful), and amount spent.
Manage Finances by Cutting back on unnecessary expenses
It is a good idea to go through your banking app, email, PayPal, Cash App, and/or any other areas where you may be missing “hidden” charges. It is easy to forget Spotify, Netflix, and the like. I found a forgotten monthly charge of $2.99 that was from my old phone provider. All those little bits add up quickly! The Daily Expense Tracker below can help!
This Expense tracker will help you to keep an account of all your expenditures and makes you more aware of your spending habits.
To save more money, it’s important to cut back on unnecessary expenses. Evaluate your spending habits and identify items you no longer need or use. Make a budget so you know exactly how much income and expenses you have each month. Set aside some funds for emergencies and unexpected expenses, then stick to that budget! By controlling your spending, you’ll live within your means while reaching your financial goals sooner.
Identify Problem Areas to Help Manage Finances
Identify problem areas where you can cut back: eating out or buying Starbucks on a daily basis; letting your kid convince you to buy a toy every time you go to the store (I was very guilty of this one!), or simply changing a costly habit, such as never shopping for groceries hungry – true story- which l will expand on in a separate post.
Shop around for the best deals on groceries, utilities, and other bills
If you want to save money, take the time to shop around. Compare prices between stores for groceries and utilities, and compare offers to get the best price. Research providers of services such as Internet and TV packages to find a good deal on your household bills. Don’t be afraid to negotiate with service representatives on the phone; sometimes they have discounts that are not advertised online. Taking the time to look around can really pay off in savings!
Save Where You Can To Manage Finances
It may seem difficult to save money when you’re barely making ends meet, but it’s important to start somewhere. How? I started managing finances with a change jar at home, which the kids turned into a “swear jar” (it works!) and eventually became a $1 jar. Currently, it is sitting on a table next to the front door and I empty my change and any dollar bills into it when I enter the house. Can’t stop dipping into the jar? Try this adult piggy bank that you have to break to get into!
If you don’t have the self-control ability to save money continuously and can’t realize your saving plan, we strongly recommend you to choose this unopenable piggy bank
It’s a tricky balance between taking care of ourselves and providing for our loved ones. Our minds often trick us into thinking we can afford just one more treat when it could make the difference between disaster preparedness or being taken by surprise. But sometimes things like that Mountain Dew are absolutely essential to keep up with our responsibilities; I mean after all if my readers don’t get their weekly health tips from me who will? In any case, making sure you have enough resources takes willpower!
Like most of us, I’m very good at rationalizing when it comes to things I want and not so good at it when it comes to reasons why I should forego the Dew and save up for the inevitable emergency…and there WILL be one. There always is, my friends. This makes saving a little fun.
When you put the coins on the plae, the kitten or the panda will say a clear “Hello” . After taking away your money, it will say “Thank you”,
Ready to de-clutter your home and make some money on the side? Consider selling unwanted items online or at a garage sale. Online options allow you to reach a much wider audience than a physical sale, although it does involve payment fees and shipping costs. Look for relevant local Facebook groups to advertise your items, or join an online marketplace like eBay or Etsy. I love Facebook Marketplace for selling my used stuff locally and I have printables on Etsy at PaloozingPlanners . Shopify is next for the blog! If you prefer the traditional Garage Sale experience, advertise it in advance with flyers and ads, be sure to check local laws/permit requirements, and ensure everything is clearly labeled with prices. No matter which route you choose, remember that potential buyers are looking for deals so keep prices reasonable. It won’t do you any good if you can’t sell it.
When it Rains it Pours – Making Managing Finances Difficult
Unexpected costs can cause a slew of tumultuous emotions that often go beyond mere worries, like financial stress and anxiety. But what’s worse is the fear created by not knowing how one will pay – or if it might get even more expensive! Take an emergency room visit with no insurance for example; this could quickly become surgery, physical therapy, and multiple follow-up visits – leaving someone feeling utterly helpless in terms of cash flow. The situation does not end there either: health concerns such as ulcers, panic attacks, depression, and heart attacks have been known to arise from these types of dire fiscal straits. Money woes are most certainly nothing to take lightly!
My family ran into financial problems when my son was born 13 weeks early and grew up with special needs. If you are in a similar situation, read Raising a Child With Special Needs – Expecting the Unexpected, or Managing Finances When You Have a Special Needs Child
Practice Saving To Manage Finances
Saving money is a habit that you have to develop over time. Don’t set yourself up for failure by expecting to get it right the first time. Your expectations should be realistic based on your income and expenses. Open up a savings account and start by emptying your change jar into it at the end of whatever period of time you set. It may seem small, but it is more than you had before.
Transform your financial situation with just a few simple steps! Start small by setting aside $10 or $20 from each paycheck, and let it accumulate over time – you won’t even miss the money since it’s automatically deposited. This little “rainy day” fund will help get through any storms that life throws your way without having to rely on credit cards for unexpected expenses. Once you master this first challenge of saving, making smart spending decisions becomes second nature!
Manage Finances by Paying off Debt
Speaking of credit cards…If you have credit card debt, pay it off as soon as possible because the interest charges add up quickly and make it difficult to get ahead financially. Always try to pay more than the minimum due – that’s where they swindle you – take a look at what your payment is and then what they add for interest in one cycle. It’s eye-opening!
I’ve sworn off credit cards completely. They just aren’t worth the stress and hassle, although I sorely miss having the option when I’m in a bind. I have found that in each situation I am grateful that I didn’t have a card to reach for because it would have only made what was bad, even worse.
If you can’t afford to pay off your debt all at once, try the debt snowball method. This involves paying off your debts from smallest to largest balance, regardless of interest rate. As you pay off each debt, you’ll have more money available each month to put toward the next debt on the list. Soon enough, you’ll be debt-free!
Get creative with ways to make extra money
With the right mindset, you can make extra money by thinking outside of the box and letting your creative side shine. You can opt-in to become a rideshare driver or offer freelance services like graphic design, content writing, editing, and transcription. If you’re crafty, rent out handmade products on sites like Etsy or put your art up for sale. You can even try pet-sitting, tutoring students, or starting a virtual assistant business and working from home. Don’t be afraid to explore new ways of generating more income and keep an open mind about different possibilities.
10 Money Mistakes You Must Avoid At All Costs | How To Be Good With Your Money
Ask for help from family and friends if needed
If you need money, don’t be afraid to ask your family or friends for help. They know you personally, and often they understand the predicament better than any bank or loan officer. Reaching out and asking for help is sometimes the only way to get you back on track financially. Don’t be embarrassed to speak up: it’s a smart decision that could make all the difference.
Managing finances on a low income isn’t easy. Make sure to track spending, plan for unexpected costs, avoid fees, and use budgeting apps or sheets. Saving money requires research and comparison shopping—look for discounts and alternative payment plans. Cut down wasteful spending, but don’t forget to account for small indulgences. Keep an emergency fund in case of unforeseen expenses. Finally, be patient with yourself while trying to make wise decisions with your finances—it takes time to build financial security on a low income.
Books for Managing Finances on a Low Income
THIS BOOK OFFERS YOU “OUT OF THE BOX” CONCEPTS WITH MONEY
Do you have trouble reaching your savings goals?
If yes, then this low-income, savings challenge tracker will help you