How to Manage Personal Finances when on Low Income

Managing your personal finances is hard enough when you are making a reasonable income, but can be more difficult when you have a lower income. 

Take a look at your expenses

Make a list of all of your fixed expenses. If you cannot afford to pay all of them, pay the ones that you need to pay such as rent/mortgage, utilities, etc. Then see if there is a way to make extra income to cover the others. If you find yourself having difficulties paying your mortgage payments, contact your lender in the beginning to let them know. Many lenders will do their best to work with you instead of having to go through the foreclosure process. It is better to let them know in the beginning instead of waiting until it is too late for them to offer you any help.

There are some expenses that are fixed and others that variable. Variable expenses are those that vary from month to month, such as food costs, utilities, clothing, etc. 

Food costs

One of the larger expenses for many households is the cost of food. It is something we all need and the costs continue to rise. There are ways to spend less on food to stay in your budget. Shop with a list and look for items that are on sale. Take an inventory of items you already have. You may have items that can make a meal or may only need a couple of items to add to them to make a meal.  Cut down on dining out.  You can make a considerable amount of food at home for the price that you pay for meals at restaurants.

If you lack time to cook every day, check out using a crock pot or slow cooker.  You can put ingredients in before you leave for the day and have a cooked meal when you get home later in the day. Another advantage of using a crock pot is that you can use lower quality cuts of meat because they will get tender the longer they cook.

Watch utilities

You may be able to save on utilities by watching the water and electricity you use. Turn off lights, televisions, computers and other items when you are not going to be in a room for awhile. 

Combine errands that are in the same area to save on gas and wear on your vehicle. Consider carpooling if you live near someone you work with or if you live with someone that works in the same area that you do.

 Just because you have a low income does not mean you need to go into debt.