Managing Your Low Income: Tips for Budgeting

If you are struggling with a low-paying job or dealing with inflation, it can be tough to reach your goals or even just get by. But you can still handle your money well and feel like you’re in charge of your finances, even if you don’t earn much.

Even with a low income, making a plan for your money is important. A budget helps you control your money by deciding where it should go every month. If you want to learn how to budget with a low income, follow simple steps like everyone else. Start by having your bank account ready for reference and use a pencil and paper or a free budgeting app to write out and adjust your numbers easily. 

List your income

Every budget begins with knowing your income, no matter the amount. Before you spend, it’s important to know how much money you have. List all your income sources, including salaries, part-time jobs, side gigs, stipends, child support, disability, social security, or any other payments you receive monthly. If your income changes, start with the smallest amount you usually earn each month, and you can increase it later if necessary.

List your expenses

Once you know your total monthly income, the next step is to plan for your monthly expenses. Start by reviewing your bank account to see where your money goes each month. Write down all your usual bills, such as rent, electricity, and car payments, along with flexible expenses like groceries and fun activities. Use paper or a budget app to keep track of these costs. This will show you where you can change your spending habits to handle your money better.

First, make sure you take care of your basic needs: food, electricity, housing, and transportation. After setting aside money for giving and saving (if applicable), budget for your rent or mortgage, average utility bills, monthly food costs, and gas. Don’t worry about getting the numbers perfect; just estimate.

Next, include other expenses like childcare, insurance, debt payments, entertainment, household items, and a miscellaneous category for unexpected costs. Focus on understanding your typical monthly spending for now; adjustments can come later.

Subtract your expenses from your income

In zero-based budgeting, you make sure your income minus expenses equals zero. This means you assign every dollar a job, like saving, spending, or paying debts. If you spend more than you make and end up with a negative number, don’t stress. The goal is to identify and stop overspending to avoid overdraft fees.


What to do if Your Income Doesn’t Cover Your Expenses

Budgeting for families with low incomes can be hard. If your budget shows you don’t have enough to pay for everything, don’t panic. There are many ways to balance your budget and regain control over your spending.

Cut Off Extras

First, review your budget and identify what costs you can eliminate. Do you really need all those streaming services? Do you have to get your nails done every week? These expenses aren’t bad, but if your budget can’t support them, you have to cut them out.

Skip Restaurants

Eating out can wreck your budget! Consider eating out less often, maybe just once a week, or stop completely if you’re low on cash. Cooking at home might not be as convenient as grabbing fast food, but it will save you a lot.

Don’t Buy New Clothes

Shopping can be enjoyable. But unless your child’s clothes are too small or you really have nothing to wear, you can likely hold off on buying new clothes for a bit.

Sell Your Stuff

Clearing out clutter can boost your budget. Look around your house and find stuff you don’t need or like anymore. Old sports gear, that dusty gift from your mother-in-law, or the extra fancy dishes you keep just in case—sell them online to make extra cash.

Optimize Your Expenses

For budget categories you can’t cut out, here are some ways to save:


  • Plan meals ahead.
  • Buy generic brands.
  • Shop at cheaper stores.
  • Use coupon apps.


  • Do multiple tasks together to save on fuel.
  • Sign up for programs that offer rewards for buying gas.
  • Use apps like GasBuddy for cheap gas.
  • Avoid car payments if possible.


  • Shop around for better rates.
  • Raise your deductible (ensure you have an emergency fund).
  • Drop unnecessary coverage.
  • Bundle policies for discounts.

How to Increase Your Income

If you’ve tried cutting costs as much as you can but still don’t have enough money, it’s time to find ways to make more. Here are some tips to help you increase your income:

  • Get a side hustle: Try driving for Uber, selling homemade crafts, or tutoring online.
  • Work overtime: Pick up extra shifts at your current job for a paycheck boost.
  • Freelance: Use your skills, like photography or writing, to take on freelance gigs.
  • Ask for a raise: If you believe you should earn more, have a chat with your boss about getting a raise.
  • Switch jobs: Look for better opportunities if your current job isn’t cutting it. There are plenty out there!

What You Must Do if You Have a Low Income

Here’s how to manage your money wisely:

  • Start an emergency fund: Save up $1,000 for unexpected expenses so you won’t stress out when life throws a curveball.
  • Stay away from debt: Taking out loans might seem like a fast solution, but it just creates more problems.
  • Adjust your budget: Even with a low income, you can take charge of your finances by creating a budget and sticking to it. As your income changes, update your budget accordingly to make every dollar count.

Learn How to Budget on Low Income for Financial Success

Feeling strapped for cash? Don’t worry, there’s hope! Learn to manage your money smartly, no matter how much you earn. Begin by making a budget and reducing extra spending, like eating out or buying things you don’t really need. Optimize your spending on essentials like food, transportation, and insurance. If your income still falls short, explore ways to earn more, like picking up a side hustle or asking for a raise. Remember, it’s crucial to build an emergency fund, avoid debt, and adjust your budget as your income changes.

Scroll to Top