How To Budget Money On Low Income (11 Best Ways)

If you are looking for “how to budget money on low income” then this is the post for you!

Saving money and developing a budget on a low income can be very hard so I put together 11 effective methods that you can use to improve your financial life.

With these methods, you will be able to set up a budget even if you have a low income!

Let’s get right into it…

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    Get Some Financial Help

    Get financial help if you have a low income

    Listen, there are many personal finance tips and tricks out there that you can follow and while they will help you if you are really struggling then a lot of these tips and tricks won’t help you much at this time.

    So, if you are finding it really hard to pay bills, buy food, etc… you should definitely look into getting some help.

    There are many government assistance programs that you can apply to if you are struggling financially.

    You can also reach out to some non-profits to see what help they can provide to you.

    Another thing you can do is call all of your creditors with whom you’re currently with and see what kind of relief they can give you.

    For example, you can call your mortgage provider or credit card issuer to see what help they can provide to take some of the financial pressure off of your back.

    If you have a good history with them then they will be more likely to help you get back on your feet.

    I had one of those no interest and no payments for 12 months credit cards and it was about to expire so I got some help from the credit card provider and was able to extend the offer.

    There is nothing wrong with getting some help!

    Everyone needs a helping hand at some point and it can help you get your financial life back on track so definitely don’t overlook getting some help.

    Start An Emergency Fund

    Start a emergency fund

    We all know life hits hard and it does so when you are least expecting it so to deal with this it’s best to have an emergency fund.

    An emergency fund is simply a savings account dedicated to those unexpected expenses that come up like a medical emergency, car trouble, layoff, etc…

    This will help you cover or at least help you cover expenses that you didn’t plan for and you don’t have to go into debt.

    I highly recommend setting up a savings account and funding it with anything you can to use for emergencies.

    Your emergency fund won’t need to be accessed frequently to withdraw money so I recommend using a high-yield savings account at an online bank.

    My go-to bank for my emergency fund is CIT Bank who has one of the highest interest rates out of all the banks (especially the big-name banks).

    You can signup for a CIT Bank savings account here and start funding your account right now!

    Prioritize Bills

    Prioritize your bills for your budget

    We all have bills to pay and when you have a low income then it can be tough to stay on top of your bills.

    It’s best to start tracking your bills and list them out to see exactly how much you owe and what bills you have.

    You don’t want to end up drowning in credit card debt, paying $1,000’s in interest, or missing payments!

    So, you need to make sure you are paying your bills on time and making sure you are paying off your credit card debt as soon as you can.

    I recommend checking out Rocket Money which is an awesome app that will help you prioritize and manage your bills.

    Rocket Money is a must-have tool if you want to know how to budget money on a low income so definitely check it out!

    Ignore Savings Rates

    Ignore savings rates

    I’m sure you heard of other personal finance bloggers or financial professionals saying that you should save at least 10% or 15% of your income.

    While this is the right thing to do for most people, for low-income individuals this might be too much to handle.

    Saving money is hard if you are living paycheck to paycheck having a set savings rate makes it harder and it might even drive you to save nothing at all!

    So, if you are trying to budget on a low income then I recommend saving as much as you can afford to.

    We went over starting an emergency fund earlier so definitely make sure you have some money set aside for emergencies and focus on saving whatever you can.

    If you have credit card debt then save less and pay off your debt as soon as you can.

    Also, use your money to invest in yourself and your education to get higher pay which will help you save more!

    Review Your Spending

    Review your spending

    How much did you spend on groceries last month? How much on work lunch? Clothes? Not knowing this is a big problem when you’re trying to beat being broke.

    You need to track your spending down to the penny to see where your money is going so you can see where you can cut costs to save money.

    There might be things you are spending money on that you don’t even realize so by tracking your spending you can find these expenses that can be cut out.

    We talked about using Rocket Money earlier to prioritize your bills but you can also use Rocket Money to uncover your expenses also!

    Along with using Rocket Money, I recommend checking out Mint which is a budgeting app that you can link to your bank accounts so it can track all your spending for you.

    You can set spending goals and limits using Mint and you will get notified on your spending habits.

    However, you will still need to do some manual work to track your spending with cash. You can input spending manually into Mint so I recommend doing this for your cash purchases.

    Cut out things that you don’t need or use and try to cut back on things you want but don’t need to practice delayed gratification.

    Sacrifice a bit now for major benefits later on!

    Negotiating Purchases

    Negotiate your purchases to save money

    If you want to know how to budget money on a low income then chances are that every penny counts.

    Because every penny counts, you should do your best to negotiate pretty much everything to get a good deal or discount.

    I say pretty much everything because there are things you can’t negotiate on especially at big-name stores, for example, you can negotiate prices at Walmart… Not going to happen.

    But there are many things you can negotiate on!

    You can negotiate lower deals at local stores and even with your credit card companies.

    With credit card companies, you can negotiate for a lower APR or no interest for a few months!

    Just ask. A “no” is the worst thing that can happen.

    You can also negotiate lower rates on your bills so just try it out and see what deals you can get!

    Eliminate Unnecessary Expenses

    Eliminate unnecessary expenses

    This was talked about in the ‘Review Your Spending’ section but it deserves its own section.

    If you are living on a low income then you need to find ways to cut costs everywhere you can and focus on hacks to save money and making more money.

    Of course, you need to spend money on necessities but those “wants” in your life can be put on hold for now to improve your financial life.

    So, do your best to get rid of all the unnecessary expenses you have to save more money and put more aside for emergencies.

    Now, I’m not saying that you are not allowed to have any fun in life!

    You should definitely still have some fun but you need to limit yourself on these “wants” until you are in better financial standing.

    Just remember, there’s a big difference between “wants” and “needs.”

    Find Easy Ways To Cut Costs

    Find ways to cut costs

    If you have a low income there are limited ways to save money but there still might be some ways to save money.

    I recommend using apps like Dosh, Rakuten, Ibotta, and Drop which are cashback apps.

    Cashback apps will give you money back for things you are already purchasing so you really have nothing to lose!

    The apps are free to use so why not check them out and start saving money easily?!

    I also recommend checking out Trim which is an app like Rocket Money that can help you save money automatically by cutting costs and negotiating bills.

    There are many free services out there that can help you out financially so definitely check them out!

    Simply Start A Budget

    Start a budget on a low income

    I know… I know… if you are looking for “how to budget money on low income” of course you want to start a budget.

    I understand but many people will read this post and think it’s too much to do so they end up doing nothing and staying in the same spot or even worse!

    So, you need to start a budget and start limiting spending for yourself.

    It doesn’t have to be perfect but the most important thing is that you start!

    You can use pen and paper, spreadsheet software, or an app like Mint.

    Just start and make adjustments as time goes on!

    Adjust Spending as Needed

    Adjust spending limits

    This method is right out of the previous method, but a budget is not a “set it once” kind of thing.

    You need to be constantly adjusting your budget and find what will work for you at this point in your life.

    Maybe an emergency happened so you have to cut costs or maybe you are making more money now so you can allocate more money to certain categories.

    It’s a simple method and seems like a no-brainer but many people don’t adjust their budgets after initially setting it up!

    So, constantly review your budget to make changes if necessary.

    Increase Your Income

    Increase your income to make more money

    You can only decrease spending so far so you need to find ways to increase your income.

    There is a simple saying that “there is only so much you can save but you can make as much money as you want”.

    I’m not telling you that you have to become the next Jeff Bezos (even though that would be awesome) but if you have a low income then you should focus most of your energy on making more money!

    I know a budget surrounds the saving money aspect of personal finance but making more money is equally important and in a low-income scenario I believe it’s even more important.

    When you have more money you have more of a safety net and you won’t worry as much about how you are going to pay bills or put food on the table.

    It’s the best step you can do if you are living on a low income!

    Try to get a raise at your current job or if they don’t want to pay you more then get a new job.

    Learn a skill or trade that can earn you more money by going to college or trade school.

    You can also start doing some side hustles such as Doordash, Instacart, Taskrabbit, etc… to make some extra money.

    There are many ways to make money so just get creative and find a method that works best for you.


    These are 11 of the best ways to budget your money even on a low income!

    As I stated earlier, I know budgeting is pretty much all about saving money but if you have a low income then you should really focus on making more money.

    There are only so many things you can cut out to save money on so if you are really struggling then first get help in any way you can and then focus on getting some more income.

    If you enjoyed this post then I recommend checking out my posts on How To Save Money Fast On A Low Income and Tired Of Being Poor? Here’s What To Do!

    Do you have any other methods to budget money on a low income? Do you have a budget set up? Which method is your favorite? Let me know in the comments below!

    Are you ready to take control of your money? Check out these awesome money resources which will help you to make and save $1,000’s!

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      1. You are right, I should probably ask for a raise although there are companies that cannot instantly give a raise given the circumstances that they only have small firm or just starting the business. Thanks for your advice.

        1. Thanks for reading! Yes, asking for a raise is one of the best ways to increase your income but as you stated getting a raise isn’t always possible so it might be best to look for better opportunities.

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