9 Tips How To Budget On A Low Income

Empty wallet with a few dollars and coins signifying budgeting on a low income

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Hey there, do you need to learn how to budget on a low income? You’ve come to the right place! I’m going to talk about 9 ways to create a monthly budget when your income is low.

You can take several steps when you have a limited income and need to create a tight budget. Let’s get into it!

1. Don’t Live Alone

Rent in most of America is so high that it can be difficult to live alone if your income is low. If you’re having a difficult time covering rent due to low income, check out a roommate-finder website like Roomates.com.

If you’re in a serious relationship and haven’t moved in together yet, this might be the time to start thinking about it. My wife and I started living together early on in our relationship, which helped us really get a feel for one another’s personal habits. This strengthened our relationship while also giving the added benefit of splitting all the living expenses 50/50.

When you live with someone else, you’ll spend less money on all of your living expenses, including:

  • Rent
  • Utilities
  • Cable/Internet

This will allow you to have more money for other expenses or to pay down debt or save for the future. Read this post to learn how to lower your living expenses further.

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2. Find a Neighborhood With a Low Cost of Living

Besides saving money on rent via living with a roommate, another option you have is to live in a low-cost neighborhood. This may take you far from convenience, as everything in where you live is about location, location, location, however, when you need to save money, this is a solution that may help.

One great way to live in a less expensive area but still maintain a well-paying job is to work remotely, where possible. I’ll cover this below.

When my wife and I needed to cut our living expenses, we moved from upstate New York to New Hampshire. This had the benefit of cutting our living expenses by about a third while we also maintained the same income.

Never be afraid to look for opportunities in less expensive states or cities. If you're looking to buy a house, check out Realtor.com. If you're looking for a place to rent, I recommend Apartments.com

3. Find Low-Cost Activities To Do

When you’re trying to budget on a low income, one thing you’ll want to do is lower the average amount of money you spend on activities and entertainment. I wrote a whole post about low-cost activities you can do from home here. Here are some examples:

  • Read books
  • Watch streaming services like Netflix
  • Play board/card games
  • Do crafts
  • Exercise

When you’re managing your money, the previously mentioned activities won’t break the bank at all.

4. Live Frugally

Whether you live frugally all the time or you’re living frugally short term, when you’re trying to budget on a low income, it pays to live on as little as possible. Living frugally doesn’t mean you live cheaply; it simply means you spend money only where you need to and cut back everywhere else.

Examples of ways to save money when you’re living frugally include:

  • Cut back on your cell phone bill by reducing your plan
  • Stop using your credit card and focus on debit cards only
  • Pay down all debt, such as credit cards, car payments, and personal loans, so you have more money left over each month

To help yourself live frugally, consider creating a budget that also tracks your spending closely.

5. Use Apps To Help You Save Money

There are several money-saving apps out there that can help you when budgeting on a low income. Here’s a few that will get you started:

  • YNAB: You Need A Budget is a household budget app. While I prefer using spreadsheets, sometimes using an app is easier. Using YNAB will help you better budget and track your spending so that you can spend less money overall.
  • Honey: Honey is one of my favorite money-saving apps. You can download the Honey plugin for your browser, and whenever you shop online, Honey will look for coupon codes for you when you go to checkout. I regularly save 1-10% on most of my online purchases through Honey. You can then redeem your savings in the form of gift cards. I recently redeemed a $50 Amazon Gift card from all of my savings from Honey.
  • Groupon: Groupon contains coupons for a variety of products and services. You can sometimes save 50% or more on deals of the day, including oil changes, clothing, online streaming subscriptions, and more. Groupon is a service that I personally need to use more. The amount you can save is fantastic.

6. Shop At Thrift Stores

When you’re living on a budget due to low income, shopping at thrift stores can save you loads of money. When going to a thrift store, spend time going through their inventory. It can be like digging for treasure at times. It might not be overly obvious where what you’re looking for is going to be.

Many thrift stores have an unsorted bin where you can often find the best deals overall. Spending several minutes going through the unsorted bin can sometimes be the best way to save.

In addition to traditional thrift stores, shopping at dollar stores, and other stores where all the inventory is $5 or less can save you tons. There’s no reason you have to pay a lot of money for anything you don’t need when you’re on a tight budget.

7. Consider Working Remotely

The cost of commuting can truly add up, both in the financial cost and the cost of time. If you can find a job online, you can save money on transportation, clothes, shoes, and more. A job-search website like Glassdoor can help you find legit work-from-home positions. Just put your location as Remote and start refining your job searches with positions that you’re looking for.

Working remotely has a drawback of lack of socialization. Sitting behind a computer all day can get lonely – I know this all too well! – but sometimes it’s completely worth it for the money you’ll save while you’re living on a budget due to having a low income.

You may be able to raise your income when you work remotely because you may land a job that’s based out of an expensive city, and they may pay their employees based on that. It never hurts to look around.

8. Earn Some Fun Money With Swagbucks

If you don’t have time for a good side hustle, consider filling out online surveys and offers on Swagbucks. You can earn a couple of hundred dollars per month, or about $2-$3 per hour, on Swagbucks. If you’re working from home, you can earn extra money on Swagbucks by watching videos on the side or for whenever you search the internet.

It’s also great to earn money on Swagbucks during your downtime. I used to do Swagbucks while waiting for dinner to cook or when waiting between classes. There’s no wrong time to earn a few bucks on the side.

Get Our Simple Family Savings Guide

Skyrocket your family’s savings with our FREE 7 step guide. Average Savings over $5000 per year!

I’ll also send you regular money-saving tips straight to your inbox.

Unsubscribe at any time. We will not sell your information.

9. Save Money by Canceling Unused Subscriptions

When you’re on a tight budget and have low income, you’ll want to cancel all of your unused or less-used subscriptions to save big. This could be an unused gym membership, game subscriptions, beauty boxes, and more. Use this saved money for your financial goals, such as paying down debt or powering up your emergency fund.

If you don’t have an emergency fund, consider open a CIT Bank Saving’s Builder account, my bank of choice. This savings account offers a competitive interest rate and offers a higher rate each month that you transfer money into your account. This encourages you to save regularly, rewarding you with extra cash when you do.

Wrapping It Up

My wife and I know what it’s like to budget from having a low income. We spent 3 years below the poverty level. It was certainly an eye-opening experience. When you use the tips provided in this article, it should help you get by even on a minimal or no income. Once your income situation improves, you can use these tips to continue to keep costs low, so that you can save money year after year.

What are some ways you budget when you have a limited income?

Do you need to budget on a low income? There are several ways you can do this. Check out these 9 tips for how to budget with a low income



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3 months ago

I really need to start investigating all the different apps that help with saving money. It seems like such a no-brainer but I just never get around to doing it. Thanks for the list to check out!

Peri McIntosh
Peri McIntosh
3 months ago

You cover some great, practical tips here. Thanks Dave 🙂

3 months ago

All great tips! I notice the trend of everyone having their own place is really going out of style lately. You can save so much money by just combining expenses all under one roof.

3 months ago

Great tips! We’ve certainly used just about all of these at one time or another.

Ruth graham
3 months ago

Great advice, having a good lifestyle doesn’t need to cost a fortune, just need good planning.

3 months ago

These 9 tips are perfect! I would add that people should starting hoarding and clipping coupons for when they go grocery shopping. I’ve saved about $100 with coupons on food.

3 months ago

These are great tips! I love budgeting and think it is such an important thing to have—even more so if finances are tight because it helps me know where my money is going.

I want to add an extra shoutout for Swagbucks. I’ve used that site for years and love getting my gift cards 🙂

Beaches in Bulgaria
3 months ago

Very good tips to help you save some money! Following all these rules will help you save money for traveling maybe or buying something for yourself!

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