Low Income Budgeting Ideas

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Published: 29th November 2012
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When you are living on a low income you must be careful how you spend the money that is available. When times are tough, each penny counts and identifying needs v/s wants becomes a way of life. For those that have difficulty living within their means, discipline becomes the first order of business to ensure their income provides for themselves and their families. There are some great ways to budget the money that you have. Let’s take a look at a few of them.

Develop a Budget

Gather all of your bills together and write down the total owed and the monthly payments. Then subtract those amounts from the income that you have. This will give you an idea of what your expenditures are and how much money you have left over after paying your expenses and debts. By developing a budget you can see your available income and decide where and how it needs to be spent. One of the best things you can do to ensure you are as accurate as possible when doing your budget is to purchase a small notebook to write down what you spend daily for thirty days. At the end of that time, you should review the information to see where your money was spent. This will help guide you to where you need to start making cuts so that your necessities are paid and some money can be set aside for a rainy day.

Goal Setting

Throughout your life you have probably been told to save money. For most people this is not enough of an incentive to do so. By setting goals for you, there is a reward to be gained from all of the budgeting and saving. When setting goals make sure you give each one a start and end date. This helps move you to action. By making some short term (6 months to 1 year), medium term (2 to 5 years), and long term goals (5+ years); you are laying the ground work to financial success. People that set goals are usually the ones that reach them.

Take Advantage of Sales

Look for sales to purchase many of the items you need. Prices can be significantly different from one store to the next, so shop around. When need arises to purchase major household appliance, its best to wait until Christmas time for the best deals. You can also go generic; these products may not look as fancy as the brand names but, they are basically the same product. Don’t forget to visit garage sales as well, many people sell clothing and other items that they have barely or never used before. Some of the best finds have been bought from these venues.

Centrelink May Help

If your financial situation is really bad; Centrelink might be able to assist you. Check with the Child Support office and Family assistance for possible entitlements. No matter what amount you qualify for, it’s more than you currently have. There are also different Centrelink loan options for individuals and people who need to access cash for consolidation purposes and/or emergencies.

Stay Away From Debt

Having small amounts of money to live on is hard enough without large debts compounding the problem. If possible, don’t borrow any money and keep credit card balances low. This will help to make budgeting easier and more predictable. If you have a need for something, start a savings account to build up enough money to pay cash for it. This teaches you discipline and helps you to maintain a decent standard of living.

Bill Smoothing

If you need help with ensuring your utilities bills are managed better; ask them about ‘bill smoothing’. This way you can pay fortnightly or monthly on them and not have to pay the entire bill at once. You can also set up something similar to this through Centrepay if you are on welfare. They will take a small portion from Centrelink each fortnight to pay the utilities.

People that are on low income are already facing challenges just to meet their current expenses and debts. By budgeting carefully, they can ensure that in time they will forge ahead. By goal setting, shopping during sales, limiting debt, and bill smoothing they can still have a good quality of life.

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