Low Income Budget? A Guide to Good Living
Not everyone has the benefit of a large income – especially when starting out in the working world. That doesn’t mean that you should sacrifice the comforts of good living, but in order to have the luxuries you want, you’ll need to prepare – and stick to a solid budget. Here are a few tips to get you started with a rock star budget.
Understanding the Need for a Budget
The most important part of living with a low income is recognising the need for a budget. Think of it as a road map for your future, rather than a burden you must live with. Ideally, you won’t be living with a low income forever; but while you are, a budget is the best way to see if your income meets your expenditure needs. And, a budget can be as simple or as complicated as you want it to be. As long as you have a list of all the income coming into your accounts – and an estimate of where that money must go first, then you don’t need much else. The big work comes when you’re faced with the challenge of wanting to spend when you simply can’t afford it.
When it comes to developing, and keeping to, your budget, it is essential to know the difference between your needs and your desires. You may want a large apartment with a spare bedroom to keep all your video games – but you don’t need those things (the fancy apartment – or the video games). You do need a place to live, but it can be basic. (It’s brilliant if you can afford a bigger place, mind you, but it’s not a necessity.) And, you do need amusement, but you may not be able to budget for as much as you’d like when you’ve got a low income. Your needs include food, shelter, clothing, transportation, security – and anything you can do that will increase your earning potential (such as studying or the development of a home business). Everything else is a luxury. If your budget allows for a treat or two, then you can have it; if it doesn’t, then you can’t (yet).
When Your Budget Doesn’t Add Up
Your budget has to meet in the middle. You can’t spend more than you can earn. And if you can’t spend as much as you earn – then you should put all that excess into savings and investments. Obviously, the bigger concern is when your expenses outweigh the amount of money that you’re earning. And, there are only two ways to solve this problem: earn more or spend less.
Earning more does not always necessitate finding a new job, though sometimes that is the best way to increase your income. Sometimes, your hobbies can earn you a buck or two if you can market them to your friends, neighbours and colleagues. Additionally, you may have skills that are needed occasionally by community groups or other organisations. The important thing to remember is that there are plenty of ways to make money – you just need to keep your eyes open for opportunities and seize them when they knock on your door.
The other way to make your budget work is to cut back on your spend. This can be as easy or as difficult as you make it. Concentrate on the areas where you spend the most and start whittling them down by changing your policies and habits. For example, if you spend too much on clothing – consider making some of your purchases from second hand or discount shops. If your car, health care or life insurance policies seem expensive for the coverage you receive, shop around for new offers from competitive companies. Incidentally – you must have these things; they fall under needs, not wants. Start with your greatest expenses and work your way to the smallest, cutting and negotiating wherever you can.
A Few Final Thoughts
• Remember that living with a low income budget doesn’t need to be painful. You can make it easy with a happy mindset.
• Setting and maintaining a budget is the most crucial part of living with a low income, but remember it must be flexible.
• If your budget doesn’t add up, you will need to earn more money or reduce the amount that you spend.
• A little creativity goes a long way – and it can help you develop skills that could earn you more money in the future.