8 Essential Personal Budgeting Tips For A Low-Income Budget
Creating a low income budget isn’t easy, but with the right personal budgeting tips, you can make things a lot simpler for yourself. Navigating a tight spending plan around your bills can be daunting, which is why this guide will help you start from the ground up. Stick with us to learn how to spend, save, and pay for expenses the right way, so you don’t miss another night’s rest worrying about your wallet. You work hard for your money, and now it’s time to make your money work for you.
Use These 8 Tips To Work On Your Budget
1. Know What You’re Saving For And Why
The first thing you need to do is know what you are saving for and why. Almost everyone wants to be better with their money or have more of it, but every person’s reasoning is different. Knowing your “why” is essential to creating a low income budget that you’ll actually stick with. If you want to get your bills under control, you have to ask what’s your “why” for saving. Perhaps it’s to lower your stress levels and increase your health.
Maybe your why for saving is to stop worrying about where the next month’s rent payment is going to come from. Other individuals may want to be able to save money to fully support their family or leave something for their children. No matter what it is, know what you’re saving for, how much you want, and why. Write down these goals and post them somewhere you’ll see every day.
2. Start Small… Really Small
While vigor is important, we don’t want to set a big goal too soon, and then come crashing down if that goal isn’t reached. It happens to the best of us if we aren’t careful. Instead, personal budgeting tips support research-backed goal-setting methods, like breaking down your large goal into smaller, actionable steps. For example, let’s say you have $1,000 in credit card debt that you want to pay off before you start saving.
You’re living almost paycheck-to-paycheck, so the first step is to go to step #3 and see how much you’re spending on discretionary purchases, like impulse spending or outings. If you calculate that you’re spending about $100 per month on discretionary items, you may limit yourself to $50 instead and put the remaining $50 toward your debt. Without calculating interest, this would mean you’d pay $13 per week towards your card, paying it off in a year in 10 months.
3. Use An App To Track Your Spending And Make It Easy
When it comes to a good list of personal budgeting tips, you’ll need to include good ways to help you stick to a budget. Don’t get bored of a pen-and-paper system – use one of these budgeting apps or another one like them. Whatever method you use, just make sure that you are creating a budget and actually sticking to it. If you do decide to use a budgeting app, these are just a few you have to choose from:
- Mint: This popular app offers budgeting tools, expense tracking, and bill pay reminders.
- YNAB: If you like to order your money around, use YNAB to assign every dollar a job and prioritize your expenses; plus, learn from their financial education.
- PocketGuard: This app connects your accounts and provides personal savings recommendations.
- Goodbudget: If you’re a fan of the envelope system, this one’s for you.
- Personal Capital: Use their budget features, investment tracking, and retirement planning tools.
4. Prioritize Repaying High-Interest Debt
The fourth thing that should be in your personal budgeting tips list is prioritizing repaying high-interest debt first. Building up your savings is important, but if your savings account pays you 3% interest and your credit card debt charges you 15%, you’re actually losing out on money. Instead, focus on paying off high-interest debt first and then you can focus on saving your money once those debts are gone – or mostly gone.
5. Don’t Forget About An Emergency Fund
One of the ultimate personal budgeting tips we can give you is to have at least three months’ worth of expenses saved up in an emergency fund. This protects you against negative things like sudden job loss, natural disasters, unexpected medical bills, and other emergency expenses. Three months’ worth of money is quite a bit, so start your emergency fund small. Put this money somewhere you won’t use it. Even $5 a week is better than nothing and will help move you closer to financial security.
6. Lower Your Housing And Transportation Bills
Housing and transportation are two of the biggest expenses you will have to deal with as an adult. This is why it is good to have ways to lower these bills if you are on a low income budget. If you can cut down to one car per family, relocate somewhere cheaper, or come up with some good hacks for your home, you could instantly save hundreds per month. Other options include renegotiating your subscription and utility services.
7. Use Local Resources And Assistance Programs
Every state and county has resources for citizens who need help handling their expenses. They offer programs for things like utility assistance to help with groceries. And as much help as these programs can be, many people aren’t aware of what they’re eligible for here in Louisiana. In order to know what you may qualify for in terms of assistance, speak with a local social worker or resource assistance center to learn if you qualify.
8. Have A Plan B For Emergencies
We applaud you for getting your finances back on track, but we also know there may be road bumps along the way that throw your progress out the window. If you find yourself with an urgent bill and no spare cash just yet, consider a payday loan from Cash Cow. You only need your ID, recent pay stub, and proof of a bank account to find out if you qualify for up to $300. Fill out the form on our homepage or call us today to learn more.
Empower Your Financial Future Now
You’ve got your list of personal budgeting tips and now it’s time to put them into action. A low income budget doesn’t need to you down, so get started today. Once you have your expenses tracked and a plan for your financial goals, the rest comes down to energy and willpower. For those moments when your willpower is high but cash is low, you can always count on Cash Cow for a payday loan. Don’t let your account hold the reigns any longer – give us a call today and take back control!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.