Here are 18 steps to help you manage your budget on a low income:

1. Track Your Income and Expenses: Start by understanding your current financial situation. List all your sources of income and track your expenses for a month to identify areas where you can cut back. Finding and using a budget template can help you get an idea of how much of your income is going towards essentials, wants, and savings. 
2. Create a Budget: Develop a detailed budget that outlines your essentials (rent, utilities, etc.), wants (entertainment, dining out, etc.), and savings (emergency fund, retirement, etc.). 
3. Prioritize Essentials: Focus on covering your essential needs first, such as housing, utilities, groceries, and transportation. Always prioritize your essentials over everything else, as these affect your housing situation, your credit, and your overall quality of life. 
4. Cut Unnecessary Spending: Trim down your non-essential spending like dining out, entertainment, and impulse purchases. Treating yourself occasionally is important for your mental health, but overindulging in non-essential spending will consume most of your budget before you know it. Start with cutting out morning coffee or eating out multiple times a week. 
5. Pay off Debt: Once you have a budget in place, dedicate a portion of the extra money towards paying off debt. Paying off debt might seem like a huge hurdle, but it is all about discipline and being mindful of your spending. Paying down debt can save you hundreds of dollars by not paying interest on your purchases. 
6. Cook at Home: Preparing meals at home is generally cheaper than eating out and allows you to plan for cost-effective ingredients. Meal planning or prepping is a simple and easy way to help save money. For example, if you spend $10 on lunch Monday-Friday, that is $50 a week, which is $200 a month and $2,400 a year. That means you are spending an extra $2,400 a year to eat out for lunch, and that is only one meal. Simply packing lunch every day of the workweek will save you thousands of dollars a year. 
7. Shop Smart: Use coupons, buy in bulk, and take advantage of sales to save money on groceries and household items. Sign up for free weekly newsletters from your local grocery store to stay updated on the latest deals. Also, look for the clearance section while grocery shopping to find extra savings. 
8. Reduce Energy Usage: Cut utility costs by turning off lights, unplugging electronics, and using energy-efficient appliances. Turning up your AC a couple of degrees when you aren’t home is a great way to save money on pricy utility bills. 
9. Cancel Unnecessary Subscriptions: Review your subscriptions (streaming services, magazines, etc.) and cancel those you don’t use frequently. Take advantage of free trials and search online for any special promotion streaming services are currently offering. 
10. Negotiate Bills: Contact service providers to negotiate better rates for services like cable, internet, and insurance. Most companies constantly run deals and will work to keep you as a customer. If you have the free time, you can also get quotes from multiple companies and see if your current provider will price match. They are giving you a better deal without the hassle of moving services. 
11. Limit Transportation Costs: Walk, bike, carpool, or use public transportation to save on fuel and maintenance expenses.
12. Sell Unused Items: Declutter your home and sell items you no longer need online or through a yard sale.
13. DIY Projects: Tackle basic home repairs and projects independently instead of hiring professionals.
14. Secondhand Shopping: Consider buying clothes, furniture, and other items from thrift stores or online marketplaces. Some people even purchase stuff second-hand and flip them for a profit. This is a great way to save money and create a side hustle for yourself.
15. Use Free Entertainment: Explore free or low-cost entertainment options like public parks, libraries, and community events.
16. Avoid Impulse Purchases: Wait 24 hours before making non-essential purchases to determine if they are truly necessary. Delete your credit card information from all the websites you frequently shop; this way, you have to consider whether the purchase is worth it while typing in your card information. 
17. Review and Adjust: Regularly review your budget and track your spending to identify areas where you can improve.
18. Increase Income: Look for part-time gigs, freelancing opportunities, or side jobs to supplement your income and ease financial strain.

3 Things to Do After You Cut Spending 

1. Plan for Savings: Allocate a portion of your income to savings, even if it’s a small amount. Over time, it will accumulate. Start small by just putting $25 a week away, and slowly increase the amount you put away over time. $25 might not seem like a lot, but over the course of a year, that is $1,300 you would have put away. Once you get comfortable with savings, move up to other savings methods, such as the 10% savings rule. 
2. Emergency Fund: Build an emergency fund to cover unexpected expenses, which can prevent you from going into debt. Having an emergency fund to fall back on helps when unexpected events happen. 
3. Start a Retirement Fund: If you haven’t already, enroll in your company’s 401K plan. Also, put enough into your 401K to get your employer’s match amount. Putting away money for your retirement is always important. 

Final Thoughts 

Budgeting on a low income is possible. Remember, budgeting takes time and effort, and you might need to readjust or try multiple budgets before you find one that works for you. Be patient and stay committed to your financial goals. 

To find more personal finance tips, visit our website Personal Finance Archives – Texas Regional Bank.