How to budget money on low income?

I was always interested in the psychology of money. Even though my parents were poor, they knew how to budget money on low income.

Later on, when I grew up, I realized how the world works, and how many people struggle to save money on a low income. They lack financial education which makes their spending habits grow bigger but their tight budget gets tighter and tighter.

To budget money on a low income, prioritize needs over wants, track spending, reduce expenses, increase income, build an emergency fund, pay off debt, and celebrate successes. With time and dedication, you can achieve financial stability.

Before you do that, I want you to understand exactly what the budget is and how it works.

What is a budget?

Simply put, a budget is a plan for managing your money.

It is a tool that helps you to track your income and spending and make decisions about how to spend your money.

A budget can help you to:

I can help you create a budget, but you will need to gather information on your income and spending.

Your income may include your salary, wages, tips, and any other sources of income you may have. Your expenses may include rent, utilities, groceries, transportation, and any other bills or payments you may have.

So, gather this information using my free printable weekly budget template.

Why weekly?

  • A weekly budget allows you to break down your spending habits into smaller, more manageable chunks.
  • A weekly budget can help you to avoid overspending.
  • A weekly budget can help you to stay motivated and on track toward your financial goal.

Printable weekly budget template.

Below, you will find my weekly budget template. It’s in a printable format, so you can simply download it and print it right away, or simply fill it up, as it’s also a digital file in pdf form.

FREE printable weekly budget template.

This free weekly budget template allows you to take note of your:

  • Income.
  • Fixed expenses.
  • Variable expenses.
  • Savings.
  • Debt payments.
  • Miscellaneous.

When it comes to your income, this section should include all sources of income that you expect to receive during the week. This could include your paycheck, freelance work, or any other sources of income you may have.

When it comes to your fixed expenses, this section should include all expenses that are the same every week, such as rent/mortgage payments, car payments, insurance, or any other fixed expenses.

Talking about variable expenses, include all of your expenses that vary from week to week, such as groceries, gas, entertainment, and other discretionary expenses.

Now savings… The savings section should include any dollar you plan to save during the week. This could include contributions to emergency funds, a retirement account, or any other savings goals you may have.

Let’s talk debt. Most people have some debt payments, so in this section, you should include any payments you plan to make towards your debts during the week, such as credit card payments, student loans, or any other debts you may have.

If you wondered what miscellaneous is, these are simply any spendings you may have during the week that doesn’t fit into the other categories, such as medical expenses or any other unexpected spending.

Fill out your weekly budget template.

It’s important to note that your weekly budget template should be personalized to your specific financial situation. You may need to include additional categories or adjust the amounts allocated to each category depending on your earning and spending.

By using a weekly budget template, you can track your earnings and spending on a regular basis and make adjustments as needed to ensure that you are on track toward achieving a financial goal.

So, here’s what you need to do…

Once you have gathered information about your weekly spending habits, you can create a budget by organizing your income and spendings into categories.

You should prioritize your needs over your wants, and allocate your bucks accordingly.

For example, you may need to allocate a larger portion of your budget to rent, utilities, and groceries, while cutting back on non-essential spending such as dining out or entertainment.

To make budgeting work, it is important to track your spending regularly. This will help you to stay on top of your finances, avoid overspending, and make adjustments to your budget as needed.

It is important to review your budget regularly to ensure that it is still working for you.

Life circumstances may change, and your earning and spending may fluctuate.

Just look at my life – I married a beautiful Italian woman who was a dancer, choreographer, and performer. She also owned a dance school.

When her first chronic illness came along, it changed everything. And then, unexpectedly, another chronic condition occurred. My wife was diagnosed with stage 4 endometriosis and fibromyalgia disorder.

what followed was general anxiety, panic disorder, obsessive-compulsive disorder (OCD), depression, self-harm, and suicidal thoughts and attempts.

Both conditions turned our lives upside down, but this made our marriage even stronger.

It all depends on how you look at things.

Be prepared to make adjustments to your budget as needed to ensure that you are on track toward achieving your goals.

How to budget money on low income 2

The psychology of money.

The psychology of money is the study of how our emotions and biases affect our financial decisions. It is a relatively new field of study, but it is quickly gaining traction as people realize how much our emotions can get in the way of making sound financial decisions.

There are many different aspects to the psychology of money, but some of the most common include:

  • Loss aversion.
  • Mental accounting
  • Anchoring.
  • Overconfidence.

The psychology of money is a complex and ever-evolving field of study. By understanding how our emotions and biases affect our financial decisions, we can make better choices that will help us achieve our financial goals.

I am a human being, and I am not perfect. I used to have emotions and biases that affected my financial decisions. I knew that I was more likely to lose money than gain money, and was also more likely to spend money from my savings account than I was to save it.

I used to rely on the first piece of information I received when making decisions, and I didn’t trust my abilities and knowledge.

Today is different. I love educating about money management, budgeting tips, the budgeting process, and market research. I also always wanted to retire early and learned that blogging is the best and risk-free way to accomplish that!

What can you do if you have money on a low budget?

In order to take control of your low-income budget, you need to take into consideration the following steps:

  • Determine your earnings.
  • List your expenses.
  • Identify your needs and wants.
  • Create a budget.
  • Track your spending.
  • Reduce your spending.
  • Increase your earning.
  • Build an emergency fund.
  • Pay off your debt.
  • Celebrate your successes.

Now, allow me to discuss them one by one…

Step 1: Determine your earnings.

The first step in creating a budget is to determine your earning. Your income is the money you earn from your job, side hustle, or other sources. It is essential to have a clear understanding of your income, as it will help you to make informed decisions about how to spend your dollars, especially on a tight budget.

To determine your income, add up all you earn each month. This includes your salary or hourly wage, any tips or bonuses you receive, and any earnings from a side hustle or freelance work.

Step 2: List your expenses.

The next step is to list your spending. These are all the things you spend money on each month. This includes your rent or mortgage, utilities, groceries, transportation, and any other bills.

When you have a tight budget, spending habits and financial planning have to change.

To make sure you don’t miss anything, start by reviewing your bank statements and credit card bills from the last few months. This will give you a good idea of where your extra cash is going each month.

Be sure to categorize every expense you make, so you can see where you are spending the most money.

Step 3: Identify your needs vs. wants.

Once you have listed your spending habits, it is time to identify your needs vs. wants.

Needs are things that are essential for your survival, such as food, shelter, and clothing. Wants are things that are nice to have, but not essential.

When you are living on a low income, it is essential to prioritize your needs over your wants. This means that you should focus on paying for your essential spending first and then allocate any leftover money towards your wants.

How to budget money on low income 3

Step 4: Create a budget.

Now that you have a clear understanding of your income and spending, it is time to create a budget. A budget will help you to manage your money effectively and achieve your financial goals. Here are the steps to creating a budget:

  • Determine your monthly income.
  • List your monthly spending habits.
  • Categorize your spending as needs vs. wants.
  • Prioritize your needs.
  • Allocate any leftover money towards your wants.
  • Set aside money for savings and debt repayment.

Step 5: Track your spending.

Once you have created a budget, it is essential to track your spending. This will help you to stay on track with your budget and identify any areas where you may need to make adjustments.

To track your spending, start by reviewing your bank statements and credit card bills each month. Compare your actual spending to your budget, and make any necessary adjustments.

Step 6: Reduce your expenses.

Living on a low income often means that you need to find ways to reduce your spending. Here are some tips for reducing your spending habits:

  • Shop for deals and discounts.
  • Cook at home instead of eating out.
  • Use public transportation or carpool instead of driving alone.
  • Cancel subscriptions or memberships you don’t use.
  • Turn off lights and unplug electronics when not in use.
  • Use coupons and promo codes when shopping online.

Reducing your spending habits can help you to stretch your budget further and achieve your financial goals faster.

Step 7: Increase your income level.

Another way to improve your financial situation when living on a low income is to increase your income. Here are some ways to increase your income:

  • Look for a higher-paying job or ask for a raise.
  • Take on a side hustle or freelance work.
  • Sell items you no longer need or use.
  • Participate in paid surveys or focus groups.
  • Rent out a spare room in your home.

By increasing your income, you can have more money to put towards your financial goals, such as paying off debt, building emergency funds, or saving for retirement.

Step 8: Build an emergency fund.

Emergencies happen. You need a safety net. Building such a fund is crucial when living on a low income.

A fund for emergencies is a savings account that you can use to cover unexpected spending, such as a medical bill, car repair, or job loss.

To build an emergency account, start by setting aside a small amount of money each month. Even if you can only save a few dollars each month, it is better than not saving at all.

Over time, your emergency fund will grow, and you will have peace of mind knowing that you have money set aside for unexpected spending.

Step 9: Pay off debt.

Debt repayment is another important step in achieving financial stability when living on a low income. Debt can be a significant burden and can prevent you from achieving your financial goals.

To pay off debt, start by making a list of all your debts, including the balance, interest rate, and minimum payment. Then, prioritize your debts based on the interest rate, and focus on paying off the debt with the highest interest rate first.

Be sure to make at least the minimum payments on all your debts each month, to avoid late fees and penalties.

Step 10: Celebrate your successes!

People always forget that. It’s essential to celebrate your successes along the way. Living on a low income can be challenging, but by following these steps, you can improve your situation and achieve your goals.

Take the time to acknowledge your accomplishments, whether it is paying off debt, reaching a savings goal, or sticking to your budget for a month. Celebrating your successes can help to keep you motivated and on track toward achieving your long-term financial goals.

How to budget money on low income 4

Financial plan.

Having a budgeting plan can help you with minimal effort to make your rent payment or other essential bills you may have such as medical bills, a personal loan, credit card debt, and other expenses.

Having such an envelope system will help you prepare ahead for all your expenses such as food expenses, or other living expenses like health insurance, or a car payment, and will help you put any extra money into retirement savings.

Conclusion on how to budget money on a low income.

Budgeting on a low income can be challenging, but it is possible to manage your finances effectively and achieve your financial goals.

By following the steps I have given you, you can create any budget that works for you, reduce your spending, increase your income, build an emergency fund, pay off debt, and celebrate your successes along the way.

There are plenty of books you can read on how to help you organize yourself. Other than that, a quick reminder that you can use my weekly budget template to help you achieve that with little to no effort.

You can find this printable budget template below, ready to download.

There is nothing better than a feeling of being organized, so there are no unexpected situations in the future.

Remember, the key to successful budgeting is to prioritize your needs over your wants, track your spending, and make adjustments as needed. With time, patience, and dedication, you can achieve financial stability and improve your quality of life.

And on a side note, you can start a blog to get you out of financial insecurities and worries. If you want more details, I listed some great courses below. I used them myself. They helped me create two successful blogs.

Good luck!

Signature Przemo

Przemo Bania is a blogger and writer who helps people get out of their traditional jobs to start a blogging career. Przemo also runs a health blog advocating for endometriosis and fibromyalgia…

Blogging courses from A to Z!

Are you looking to take your blogging skills to the next level? Look no further than our selection of top-notch blogging courses!

Whether you’re a beginner just starting out or a seasoned pro looking to refine your skills, these courses have always something to offer.

Learn how to create killer content, build a loyal audience, and monetize your blog through a variety of strategies. With expert instructors and comprehensive curriculums, our courses are designed to give you the tools and knowledge you need to succeed in the competitive world of blogging.

Sign up today and take your blogging game to the next level!

Start from scratch

Launch your blogging biz

Launch Your Blogging Biz

Start your blogging business and grow it from scratch. This is ideal for beginner bloggers.

Focused on the SEO

SEO blueprint for bloggers

SEO Blueprint for Bloggers

Turn your blog into an SEO traffic machine. Bring organic traffic from search engines.

The art of Pinterest

Pinterest traffic avalanche

Pinterest Traffic Avalanche

This course will teach you how to drive huge traffic right away without waiting for months.

For course creators

6-Figure course creator

6-Figure course creator

You’ll learn how to create and sell your own online courses without having any experience.

Leave a Comment