Are you living paycheck to paycheck? Are you worried you will get behind and fall into debt? Don’t worry, with some money management and budgeting you can keep your head above water and stay on track.
Keep reading to learn some great low-income living tips.
Create a Budget
When living on a low income, one of the first things you need to do is create a budget for yourself. This can be an unenjoyable task for most people but it is an essential step for you to do in order to live within your means and not go into debt.
Start by determining what your total monthly income is and then your essential bills and utility expenses. After subtracting your expenses from your income you will see how much you have leftover at the end of the month. From this difference, you can decide how much you have to spend on groceries and entertainment each week.
This is also a great opportunity for you to take a deep look at where your money goes and how you can budget things better. Do you have cable? It might be time to cut the cord. Do you like to get a coffee every morning on the way to work? It’s time to start brewing your own at home.
Creating a budget is the best way for you to see how your money is being spent and to keep you from going over and accruing debt.
Start an Emergency Fund
One of the biggest traps to fall in when you have a low income is not having an emergency fund. This fund will help you out when times are tough and avoid putting expenses on a credit card or taking out a loan.
It might seem difficult to save money when you are already having trouble making ends meet, but it is possible once you create and stick to your budget. Once you cut your budget down to only your priorities you can save money fast by placing all of your extra money into your savings account.
Another great way to build your emergency fund is by funneling any windfalls you might receive directly into savings. If you’ve earned a bonus at work, received birthday money from your grandma, or started a side hustle, all that should be sent straight to savings. Once you have saved up at least €1000 you can start using any extra earnings at the end of the month to pay down debt you’ve accrued.
Prioritize Your Spending
If you have a low income one of the first things you should do after reviewing your budget is cut down on excess spending. If you track your spending for one month you will see where these extra frivolities cost you a lot in the grand scheme of things.
Do you smoke cigarettes or drink alcohol? These habits are not only bad for your health but they wreak havoc on your wallet. It is in your best interest to cut back or quit these addictions altogether.
Do you pay a subscription fee for music, cable, or a monthly club? These types of monthly fees should be canceled. You can still enjoy your music by using the free version of the service, switch to streaming instead of cable, and cancel the subscription boxes.
Start Cooking at Home
One of the biggest expenses each month will be your food budget. If you aren’t a strong cook then it’s time to read some cookbooks and follow the recipes. Learning to cook can save you a ton of money, especially if you have children, and it can be a fun and rewarding experience.
Start out by trying some simple meals and then as you get comfortable grow your skill and expand on your weekly meals. You can then pack your leftovers for lunch at work the next day and avoid spending money on fast food restaurants. Once you start preparing your own meals regularly you will begin to notice a big impact on your monthly budget.
Get a Roommate
If you’ve cut back in many ways but are still struggling to make ends meet then it’s time to take a look at your living situation. If you live in an area where the rent is higher than you can afford you might want to consider getting a roommate.
Renting an apartment together can be cheaper for you than moving into a room that is sublet by someone else. Often times the other person will sublet the room at a higher rate then if they were to split the rent in half. However, this might be a great option if you are already in an apartment that you enjoy.
If getting a roommate isn’t an option then you might want to consider if its time to move to an area that is more within your cost of living range. While it might be fun and exciting to live in the city, it’s probably time to move out to the suburbs so you can get your finances back on track.
Change Your Future
Once you have been living on a low-income budget for a while you will realise that it can be exhausting and unsustainable for a long period of time. If you have been working at a job that is low-paying then its time to take inventory of your life and decide if this is where you want to stay or is it time to move on.
If you have been living on a low-income budget while you are going to secondary school then you know there is a light at the end of the tunnel. If you were unfortunately unable to go to college then now is the time to determine if you should now or learn a trade to help raise you up out from living paycheck to paycheck.
These are just some of the low-income living tips you can start using today. Start by creating a budget, cut back on all unnecessary expenses, and save an emergency fund. Keep your priorities in mind when spending money, start cooking at home, and get a roommate if you are having trouble making your rent payments.
Remember to keep your head up because this situation is only temporary if you take the proper steps to achieve more in the future.
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