How to Budget with Little Income


BudgetOne of the most common financial mistakes?that individuals make is failing to budget because they don?t feel like they make enough money to make it worthwhile. In reality, it doesn?t matter how little income you make ? it is always a good idea to have a basic budget in place that outlines your spending.

By using a logical budget to control your spending, you might find that you can make your money go farther than you once thought. It doesn?t need to take very long to put together a basic budget outline, but that plan can go a long way toward improving your financial future.

Start with the Basics

No matter how small your budget might be, it will need to include the basics such as housing and food on a monthly basis. Whether you own your home or rent a place to live, that expense and everything that goes with it (utilities, etc.) should be at the top of your list.

A monthly food budget should also be established to give you a goal to shoot for when you are doing your grocery shopping. Other basics include a cell phone, gas and maintenance for your vehicle, and so forth. The key here is to be reasonable about what you’re spending and then you can find ways to save or cut back on those expenses.

Specifically Define Entertainment Spending in Your Budget

One place that many people go wrong when it comes to controlling their budget is the amount of money they spend on entertainment each month. This should be an important part of your budget that you do your best to stick to.

While your budgeted amount might seem limiting at first, look at it as an opportunity to find more affordable activities to enjoy on weekends or whenever you aren?t at work. Remember, you don?t have to necessarily spend a lot of money to have a good time.

Make Sure to Save

Regardless of how little income you make?setting aside some money for savings each month is something that you should not ignore. Even a very small amount of money going into your savings account on a regular basis will add up over time and help you make more expensive purchases down the line.

As part of your budget, set a monthly saving goal that you do your best to reach. Over time, try to gradually increase that amount so you can start to see a significant amount of money available to you in the bank. In fact, you should even try to automate your savings if you can. We do that with our Discover online savings account?so we don’t even feel the money coming out.

Don?t Be Trendy

Chasing the latest trendy brands and other items that you don?t need is a quick way to create some serious budget leaks. Following trends will only lead you to spending more money than you can afford on products that could have either been purchased for less ? or not purchased at all.

Don?t allow others to influence your buying decisions, because it is your money. Stick with your budget, and only make purchases when you are sure they are the right decision for you and your financial situation. Over time, this strategy will make a big difference in your financial outlook on a monthly basis.


What tips do you have for budgeting on little income? What challenges did you face when you first started budgeting? What’s one area of your budget that needs help?



Photo courtesy of: MoneyBlogNewz


  1. Aja says:

    The section “Specifically Define Entertainment Spending in Your Budget” is a great section because you are sooo right! I find that most people who try to budget will lump all entertainment into one category and call it ‘entertainment’ without setting money parameters for each event, party, restaurant, get together etc. that they plan to spend while entertaining themselves. I don’t even have an entertainment category in my budget. Sometimes that category will be labeled ‘birthday party’ and I will set $40 to spend for example. Since starting a budget I realized that my 3 young boys just like being entertaining by collecting worms, climbing trees and spending time with me and my husband. All of those forms of entertainment are FREE!

    When I first began my budget, I had to get used to writing it in my notebook every 2 weeks. That was actually a difficult habit to form, just physically writing out a budget. What I learned since starting a budget over a year ago is that it changes a lot! So, using software or having categories that remain stagnant didn’t work for me, so writing out what I was going to spend money on was the key to establishing a good budgeting strategy. My budget is SUPER specific. And I think you are dead on when you list that as a important component in creating and sticking to a budget! Nice post.

  2. I would suggest to really look at your spending. Regardless if you make a lot or a little, there is always a decent amount of “fluff” in there that you can cut out. Not saying you need to cut it all out, but cutting some out will make it easier to budget.

  3. I think by reviewing your expenses carefully, would be a great way to save money every month. I totally agree that you don’t need to be trendy and also if you are keeping up with the Joneses, I think you should think and stop about it.

  4. I think the biggest thing is saving first, even my clients with small incomes fix their budgets when they save first. Plus they love seeing their bank accounts grow with time and it makes the other budget choices in their life easy because they are building their wealth even with limited resources.

  5. Right after we got married, my husband and I had a total of $3,000 a month to work with. Our rent was $700, and his high-risk insurance was $500. Plus he was seeing a specialist 2-3 times a week at $30 each and… yeah. It was painful.

    We still managed to pay down our debt, and we did actually start having $25 transferred each week so that we could put $100 in an IRA. It was paltry, but it was something.

    • John Schmoll says:

      That’s exactly the point, you’re proof again that it can be done! Too often, people find excuses to not do anything and you did the opposite – very cool.

  6. I don’t really go for the “wants”. I remember that after college, I had a low-income job and did not buy as many clothes as I wanted so I used some of corporate attire I used in college and brought packed lunch to office.

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