15 (Easy) Ways On How To Budget Money On A Low Income

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Hey you, my beautiful readers, have you ever thought on how to budget money on a low income? I sure did. But do you know what’s worse than a low salary? Not getting to save for yourself. 

I’ve heard that topic countless times already from my friends and colleagues (also me once upon a time). So I know that this question on how to budget money on a low income will resonate with many of you guys out there.

Therefore I want to share the different ways on how you can still save and budget your money even with a low salary as I’ve personally used to when I first joined the workforce. And at the end of this post, you’ll realize there are tons of ways to save money on a low income! 🙂

Yes guys, it CAN be done.

Follow these real-life tips and you’re on your way to maximizing your money! 🙂

By the way, have I told you my first real job was becoming a retail promoter, working 10 hours a day, 6 days a week, earning $5/hour – now that I think about it, not sure whether that’s even legal. So yes, before getting to earn $85k annually, I started with that promoter job and I know how hard it is to budget and save some money for yourself.

15 (Easy) Ways On How To Budget Money On A Low Income

I know what it’s like to live on a low income. You purchase something for yourself and you’re left with X amount of money already. And you have to fit that money for a month.

It’s quite difficult and hard especially when you’re trying to save money. There are bills to pay, rent to cover, taxes on your salary, and not to mention your monthly groceries. In some months, my salary was only enough to cover those bills. Which means I don’t get to save some for myself.

So I know what you’re going through and please, allow me to help you!

With the tips below, hopefully, you’ll be able to see the light at the end of the tunnel! ☀️

1. Track Your Expenses

Doing this tip personally has been an eye-opener for me! When I listed my expenses, I saw that I was spending more than I should’ve on my “wants”.

And your wants could differ from mine but you could always put them into two categories:

  • The small expense wants and
  • The big expense wants

What I did before was, I totally cut off my big expense wants. Because if I took out the smaller expenses and still buy the bigger ones, it won’t do any significant changes. So if you’ve experienced the same thing, I suggest you do this as well!

List down your expenses, track down every purchase, and see what big expenses you can totally cut off.

Trust me, doing this will save you more money even with a low income!

2. Build A Budget That You Like

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Sometimes we go uber-extreme with our budgets for the sake of saving money. But if you don’t like your budget, it won’t last long. I’ve been there and I’ve done that. I made a budget so strict that I only lasted 2 weeks on it..

When you make a budget, make sure it works for you and suits your lifestyle. That’s a hack that you can do to stick to a budget for a long time!If you don’t have a plan on how to save your money, you’ll always overspend it on things. You’ll never be able to allocate it properly without a budget.

That being said, if you want a FREE Yearly Budgeting Template, you can sign up on the form below to receive one immediately! 😀

(Pssst: this is the EXACT budgeting template I use!)

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I always recommend tracking your expenses FIRST before doing any kind of budgeting so you won’t underbudget in certain categories that you tend to spend the most. You’ll yo-yo your financial diet and you don’t want that.

3. Automate Your Savings

This is one way to make sure that you pay yourself first! Without automation, sometimes it’ll be hard to get a portion of your salary once you see it on your account.


Because you’ll be thinking that if you save X amount of dollars, your budget for your food, transportation, and other things will be reduced. 

With that, you’ll decide to start paying the bills first and work with what’s left. The next thing that will happen is that your mind convinces you to spend a bit for yourself – so you buy this and that.

Telling yourself “you deserve it”. Only to find out that you ended up with no savings.

That’s why I set up an automatic transfer to my savings account. I don’t have to worry about the next expenses because I already got to save for myself.

4. Try The 50-20-30 Rule

It was US Senator Elizabeth Warren who popularized this budget method. This rule on this budget is to divide your take-home income into three categories:

  • 50% Needs,
  • 30 % Wants, and
  • 20 %Savings.

But as many people use it, people have slowly tweaked it to their lifestyle and liking. Some have switched it to the 50-30-20 rule!

Whatever it is, try this basic budget rule first for starters. If you’ve already done it, share your experience below! 😀

I’ve tried this rule before but the more I learn how to manage my money, the more I tweak it to my own personal preference – and that’s exactly what I want for my readers as well. The more you equip yourself with personal finance knowledge, the better you’ll be at seeing how to make YOUR own rule.

5. All Cash No Cards

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If we’re trying to budget a low income, the last thing we need is credit card debtInstead of using your credit card, try to go for cash.

If you only bring enough cash and leave your cards at home, you’ll be forced to fit your expenses that day with the cash you brought.I use this tip when I do my groceries.

Before, I overspend on groceries because I know I’ll be transacting with a credit card at the cashier. I wouldn’t worry about being short on cash. You can do this too if you’re a spender of small things on a daily basis!

There’s also a rule to not have more than $10 in your wallet at all times, so you won’t be buying things on impulse 🙂

Using cash as a payment method will make you realize that the money you brought is slowly becoming little which forces you to pick your expenditures.

6. Stay Out Of Debt

If you don’t have debt, continue staying out of it!

Being debt-free is one of the best things that you can do. You don’t have to stress over late payments and interest charges, especially with low income.

You sleep better at night too when you don’t have any financial worries. (Trust me on this!)

I was once in credit card debt of almost $10k. It worried me and I made sure that I will never get myself in debt again! Getting into credit card debt usually happens when a person becomes too reliant on a credit card.

Every purchase, big or small, if used with a credit card will accumulate debt. Sometimes, the person doesn’t even realize that he or she is near the credit limit.

Also, debts can come in the form of loans as well. Whether that’s via a p2p loan or from a bank – if you can avoid it, do it!

Little disclaimer: As you accumulate more money and want to go further, debt can actually be a good leverage for you. But this is only when you know and really understand money. If you’re just a beginner and just trying to budget your money with a low income, stay out of debt first.

7. Manage Housing Costs

House maintenance can be something that takes up more than half of your salary if you have a low income. Roof fixing, pipe leakage, clogs, repainting are some of the common house repairs.

Not only do you pay for materials to get those fixed but you also need to pay for labor when someone fixes it for you. There’s a general rule when it comes to housing expenses and that’s keeping it at 35% of your take-home income.

It’s actually kind of big if you think about it but luckily, you don’t fix the pipe every other day. 

Housing expenses don’t just cover repairs, bills are part of it as well. So if you want to manage your housing costs, make sure to cut everything that’s not needed.

Simple actions like turning off the lights when not needed, not wasting water, and not using air coolers can greatly help in lowering your housing utility bills.

8. Emergency Fund

First Of All: Give Yourself A Pat On The Back For Even Thinking About Your Emerg... | Gfycat

No matter how low your income is, it’s important to save for an emergency fund.

Emergencies happen when we least expect them and sometimes emergencies can be costly when we’re not ready for it.

Preparing is one way to combat any financial disasters cost by emergencies. I’ve read many stories online about how saving for an emergency fund helped them be prepared for any unforeseen bills like medical bills, car repairs, a doctor’s visit, etc.

To help you build and prepare an emergency fund, I’ve written a whole blog post about it! 

The ultimate emergency management outside of the emergency fund is insurance. I now realized that the first line of defense when it comes to an emergency would be your insurance and I do recommend getting your insurance fixed first before solely saving for your emergency fund.

9. Grocery Trip With A List

Bring a grocery list with you that only contains your essential needs. It’s so easy to overspend on your groceries when you just wing it.

You just grab whatever you THINK you need and proceed to the counter. But to fully maximize a low income, you can’t afford this mistake!

When I did my grocery trip before, I usually go over my budget because I’m confident with my credit card and I didn’t exactly know what to buy. This habit also made me buy unnecessary groceries!

So if you’re serious about saving money, I 100% suggest that you bring a grocery list with you 🙂

10. Eliminate Debt With Wisdom

The reason I’m saying with wisdom is that yes, you need to focus on paying off your debts first BUT you don’t wanna do it until you’ve completely forgotten about your investment.

Let’s say you have a mortgage, car loan, credit card debt, and a personal loan you took for your wedding. You might wanna focus on clearing off your credit card debt and personal loan first, depending on the amount and interest.

BUT don’t focus on clearing everything that’s taking you years to settle and neglecting your investment. In fact, I’d still advocate you to invest even with all the debt you have because your investment works best when done earlier, no matter how small.

I know it’s hard, but you can also invest as small as $5 or any spare change you have. I know Acorns can help you do just that.

11. Go For A Better Mobile Plan

Does anybody still text anymore? The way I see it, most of us use messaging apps rather than texting.

So if your mobile plan charges you with a fixed rate regardless of whether you use calls or text that month, it’s better to switch to a cheaper deal. Ask your provider the cheaper deals that they have and if they have promos that you can really use.

Simply switching to a cheaper deal will save you hundreds of dollars yearly!

Most people don’t even bother changing their mobile plans even though they’re not using it fully. But if you’re serious about saving money, this can help you down the road!

12. Cut The Gym Membership

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When was the last time you went to the gym? Were you able to workout even this lockdown? 

If you’re trying to save up and really maximize your income, it’s better for you financially to exercise at home or even just jog around the neighborhood!

Sure a gym has all the equipment you need to work out, but let’s be honest, we never really use them all, right? So why not try to invest in some dumbbells, yoga mat, or even a medicine ball and use it in your home?

Not only do you save monthly memberships but you save transportation allowance to the gym as well! Gym memberships, especially from high-end gyms, can eat up your monthly budget easily!

13. Walk More Frequently

This is a point that we sometimes overlook. Even though our destination is just 10-15 mins walking distance, we still get in our cars to go there. (I’m definitely guilty of this!)

These short-distance trips might seem “nothing” but it still takes up gas from your tank.  Plus another benefit aside from saving gas money, is you get to exercise as well! A win-win 🙂

14. Buy Second-Hand Items

If you need to purchase something, think about if there’s a way that you can buy second-hand items. 

Second-hand items can range from furniture, home appliances to clothing. If your local thrift store is closed, I’m pretty sure there are a lot of hand me downs on eBay and other sites.

Some second-hand items are still even in great condition! You just really need to find these gems! 🙂

15. Live frugally

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A switch of lifestyle is probably my go-to when I want to increase my savings. I’ve done this already and I can tell you that it truly works!✨

I started to live frugally when I realized that I didn’t have much savings even though I have an above-average salary.  So when I started to get serious about saving more money, as I was planning to quit my 9-5, I switched to a frugal lifestyle.

I reduced my shopping, listed my expenses, lived on a budget, and increased my income. And true enough, I did see my savings account go up! 🙂 

It’s hard work guys. But hard work pays off.

6 Ways To Increase Your Income

The next section of this blog are points that can help you increase the money that’s going to your account. If you’re on a low income, you don’t have to stay there.

There are tons of different avenues where you can increase the money that you receive every month! And with all the opportunities laid out in front of you, thanks to the internet, there’s absolutely no reason why you can’t have 2 different income streams coming in 🙂

1. Online Jobs

This is how you can leverage one of the greatest inventions in the past 2 decades – the internet! The internet has given us countless opportunities to make money! And it’s a shame that people don’t capitalize on that fact.

Websites like Upwork, FlexJobs, and Fiverr are where you can find online jobs. Interested to know what are the hottest online jobs right now?

I’ve listed the top 15 high paying online jobs that you can apply for this year! And here’s my blueprint on scoring your first client on Upwork in less than a week 🙂

2. Affiliate Marketing

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This is hands down one of my favorite ways to make money online. Because it gives me passive income.

Affiliate marketing doesn’t limit me to only being a consumer, it also makes me a partner of a product that I love! The way you make money on affiliate marketing is when someone uses your link to either sign up or buy a product.

You ever heard those Youtubers promote a product and make you use their promo code on the description? That’s an example of affiliate marketing!

If you are interested in learning how to exactly give affiliate marketing a go, I definitely recommend checking out Wealthy Affiliate.

Here are some success stories from real people using Wealthy Affiliate:

3. Sell Your Old Belongings

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Selling your old belongings or even stuffs that you don’t use is a great way to earn some extra money on the side.

When it comes to selling clothes, my only rule is if I haven’t worn it for 3 months already, it’s a sign for me to sell them. You can come up with the same concept as well. It can be applied to your items of clothing, appliances, gadgets, or thing in your storage room.

4. Get A Freelance Job

Freelancers take on contract work for companies. The usual freelance jobs can range from graphic design, video editing, to writing and a lot more!

As a freelancer, you control your time on where you’re going to work but most often, companies give you a deadline to submit your work. Being a freelancer means you can work just from anywhere, you don’t have to go to an office or wear a company uniform.

And sometimes, if the company likes your work or you’re their go-to guy on some projects, they might consider you to be a full-time employee! 

5. Rent Out Extra Space

If you have an extra room in your apartment unit, if you’re comfortable living with other people, you can rent out that extra room. Renting out that spare room can give you passive income on the side.

Not only do you earn from your work, but there’s also rent money that’s going into your account. I’ve done this twice already and now leveling up by renting out my house 🙂

Related: How To Buy A House In Your 20s – Is It Worth The Investment?

6. Sell Your Knowledge And Skills

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You might have skills in creating artworks and crafts. Or coding is something that you find easy to do. You might even have pro-photoshop skills. Whatever it is that you do well, you can always sell that skill or knowledge online.

There are tons of online courses and people are going crazy about these things because face to face training isn’t something that’s probable right now.

We don’t even know when universities will reopen! That’s why there’s a huge influx of people learning something new via these online courses. And it’s an opportunity for you to jump on!

You can search and post your courses on these websites:

You don’t need fancy equipment to record yourself and make a course. I’ve seen some classes that were recorded by using only their phones. What’s important is you give out quality content to your potential “students”!

Budgeting On A Low Income

It’s hard to live on a low income, it’s even harder to budget it. But it doesn’t mean that we shouldn’t try.

A low income is just another obstacle that we should overcome financially and the points above just prove that there are many ways on how we can do just that.

When you’re successful in overcoming this problem, then that just proves you have the discipline to achieve your financial goals!

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