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low income

How To Budget Your Finances On A Low Income

By: kjmena


When you are living off a low income, it can be difficult to manage your monthly expenses. Monthly expenses can include utility bills, credit card bills, loan payments, rent and car payments and so many other financial obligations. At times, the hardest part is managing a monthly budget and finances.

However, with the help of a budget and a little financial planning, a person living on a low income will still be able to meet their financial obligations and goals.

How To Budget Your Finances On a Low Income

 

Prioritize your financial obligations.

Before making a budget plan, it is best to categorize your priorities from all other expenses in your budget. These priorities are essentials in your life like food, water and shelter. These are items in your budget that you will always allot funds to and will be the first payments you complete every time you get paid.

However, there can be some room for added essentials like a car payment, medical expenses and debt. Once you have identified your priorities, you can then go ahead and start formulating the rest of your financial plan.

 

Look for areas in your budget where you can save funds.

When you are living on a strict financial budget it can be difficult to save money, since available funds are low. However, it is possible with minor changes to save a little money every month that eventually can accrue and become a significant amount of capital.

Look for areas in your budget that are financially flexible, for instance your utilities, being conservative about the amount of electric and water you use is a great way to save a couple of funds month. A more common and popular money saving strategy is cutting any unnecessary expenses like cable. An average cable bill a month can range from $80 to over $120 a month. Instead of allotting that money toward luxuries put them into a savings fund or account, for use later.

 

Be frugal when you do spend money.

When you are living on low funds, every dollar counts and has to be spent carefully. As a result, being frugal about spending your money can be a quick and easy way to stretch your funds.

Being frugal is about using your money wisely and thoughtfully. When spending money, it’s best that they be expenses that serve a purpose. Items that are going to be useful but at the same time be best spending choice.

 

5 Ways To Supplement A Low Income

Living on a low income is tough, and very stressful. However, there are certain things that you can do to supplement your low funds so that you have more disposable funds. You will also have a more flexible budget so that you can allot more money to certain important expenses.

These are just a few ways to increase your monthly income and some of the more simple ways to go about achieving your financial goals and be more financially stable.

 

1. Get a second job.

This is not the ideal solution to your money problems but it can be very helpful. A second job could double your monthly income. A second job could also allow you to save more money and also include expenditures that aren’t within your essentials list.

 

2. Ask for a raise or make a career change.

A simple way to get a fast increase in your income is to ask your boss for a promotion. If you already got one or aren’t qualified for a promotion, simply ask your boss for a raise. Your boss might be inclined to give you a raise once you ask for it.

There is also the option of making a career change. This will give you the opportunity to raise your income by a significant amount and also to stress less about your personal finances. This option should not be taken lightly but is something that you can consider when looking to increase your financial budget.

 

3. Downsize your living expenses.

One of the easiest areas in your budget for extra funds is your living expenses. Living expenses are the majority of most people’s budgets and the area that can be the costliest.

Take a full assessment of your finances and see how downsizing can fit into your financial plans. You could free up a large amount of funds that could go a long way in another area of your budget like paying off debt.

 

4. Become a freelancer.

This option can supplement your income with little work. Freelancing is a great way to make money on your own time. You will be able to customize your work schedule while still making vital funds for your monthly expenses.

Freelancing has a few added benefits, in that it can be done from any where and the areas for freelancing are vast with many options available.

 

5. Sell items that you don’t use anymore.

Minimizing your life could bring in some additional funds. Selling items online or in a sale, could bring in just enough extra capital to help you finish paying off some monthly bills. Items that are best for sales are electronics or clothes, but also that these items be things you don’t need or use anymore.

 

When you live on a low income, it can be a struggle to pay all of your bills on time and also find extra funds for saving. However, there are ways to budget in which you can stretch your funds so that you are meeting all of your financial obligations. The key is planning and making wise spending decisions.

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