Budget, Budget, Budget…All this this talk about budgeting. But, how can you budget when you are barely able to pay the bills. If you are working with a low income, then this is exactly when you should look into budgeting. A budget will help you see where your money is going and see where you can cut expenses. It will also help you determine if you need to earn more income.
So how do you budget when you are living on a low income or living paycheck to paycheck? The key is to know how much money you have coming in and what your expenses are. Below are five steps that will help you budget even when you are on a low income.
Five Steps to Budget on a Low Income
Step 1: Figure out how much money you are actually bringing in each month.
Step 2: Write down all the bills you are paying each month
Step 3: Make a list of all other expenses that you occur in the month, i.e. laundry, gas, shopping, coffee, etc
Step 4: Then list your bills in order of importance. List your essentials needed for everyday living first. These are your rent, groceries, basic transportation and utilities.
Step 5: Next list the rest of your bills in order of what’s most important. Include any outstanding bills from the previous month.
Now you have all your bills listed. Pay your essentials first. Then pay everything else in order of importance. What happens if you still have bills to pay but your money runs out? Pay the remaining bills next month. These will be paid after you pay your essentials for that month. Sticking with this budget on a monthly basis will give you more control of your finances. It will help you better manage when unexpected circumstances come up. It could also help you save even though you are on a low income.
To learn more about budgeting visit my post on budgeting basics.