How to Live Well on a Low Income : A Low Income Doesn’t Mean You Can’t Live Well

how to live on low income

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In the early 2000s, celebrity culture hit a new height with the debut of heiresses like the Hiltons, and an ideal life became one filled with several homes, dripping with jewels, and spending days riding around in expensive cars.

But you know and I know that life isn’t like that – and that in truth, happiness doesn’t come from the things you spend money on, it comes from the experiences of life. And when you live on a low income, you’re not agreeing to give up all that life has to enjoy.

Instead, saving money on a low income along with responsible spending can help you build enough wealth to cover the costs of life, without requiring you to sacrifice living well. By using a budget, planning your expenses, and taking small steps every day to reduce overspending, you’ll find yourself able to take in all that you want out of life.

Mother with baby on counter looking at tablet.
As a single mom, you’re the one responsible for keeping track of your family’s money.

Managing Finances On A Single Income

Whether you are a single mom or a family choosing to live on one income, you’ll need to take active steps to make your money go further. The burden is on you to bring in money, apportion that money to expenses, and make sure there is enough left over to live on. However, with the right tools and planning, you can learn how to save money on a low income and keep your spending in line with methods that work.

Read more: How to Pay Off Debt Fast With Low Income

1. Plan Monthly Expenses Ahead Of Time

It’s crucial that you know what your total monthly expenses are, and there is no better way to do so than to have a budget. Make a list of all of your monthly bills, including utilities, your rent or mortgage payments, and any other statements that you must pay each month.

Now you have the number that you must meet in order to pay for your essentials each month. You know that money will be going back out as soon as it comes in, so mark it as money already spent, so you don’t get tempted to splurge. Even better, pay your bills as soon as you get your paycheck to guarantee they are always paid on time and in full.

2. Reduce Your Monthly Expenses

When you’re looking for extra money to spend on entertainment or personal items, try paring down your total monthly expenses. Some tried-and-true methods for cutting your monthly bills include:

  • Use a programmable thermostat and keep your home cooler in the winter and warmer during the summer
  • Consider downsizing to a smaller place
  • Make your own lunch and coffee
  • Choose to walk or bike to areas in close distance to save on gas
  • Cut out cable or reduce your services

3. Manage Your Budget With A Mobile App

Once you have a budget that lays out how much you make compared to what you spend, it’s time to make sure you stick with it. The best way to manage your budget is to use a mobile app like Trim, which allows you to save money on your monthly expenses while helping you find monthly subscriptions and other budget-drainers that you don’t even know you still have.

Person with calculator and paper writing.
Saving on a low income isn’t impossible, but you’ll want to have a strategy for success.

With a mobile budgeting app, you’re able to check your spending activity from wherever you are, which can help with cutting down overspending. Plus, you can get a look at all of your account activity from one secure place.

How To Save Money On A Low Income

Just because you have a low income does not mean you can’t save – in fact, you should focus on your savings even more so that you have a cushion for emergencies and your future. But how to save money fast on a low income? Change your entire mindset related to shopping and spending money.

1. Shop Around

For everything from your car insurance to your groceries, start shopping around to make sure you are always finding the best deals and paying the lowest prices. A great way to save using this method is to start using coupons for most of your purchases. Sign up for store mailers, online newsletters, and other places where retailers and manufacturers post sales notices and coupons, and shop for the item you need at the store where you’ll save the most.

To make sure money saved actually makes it to your savings account, start putting the amount you saved on each purchase – from five cents to five dollars – into a jar or right into your account.

2. Buy Used

These days it is easier than ever to buy all that you want in life used – at a deep discount. From sites like Swappa, where you can buy and sell used electronics, to eBay, which offers just about anything you can think of, there are endless ways to get what you want without paying a premium. Check out your local Craiglist listings for large items like furniture, and take things a step further and sell your used items to bring in even more money to put to your savings.

3. Save Your Change (Physically And Digitally)

What do you do with the loose change in your pocket or purse at the end of the day? If you’re like me, it probably sits there until it’s time to clean that item. Instead, every time you get home put any change directly into a savings jar; over time, you’ll have a nice amount to deposit right into your savings account. Depending on your bank, you may also have the option of directly transferring any leftover change from your checking to your savings whenever you pay for an item with your debit card.

Paying Off Debt With A Low Income

When you don’t make much, debt can feel like even more of a burden – and can seem impossible to pay off. That’s when it becomes essential to learn how to save money fast on a low income so that you can put as much of your savings toward debt repayment as possible.

Woman smiling with money falling around her and a credit card cut in half.
Free yourself from debt and start enjoying life again.

1. Avoid High-Interest Credit Cards

According to CreditCards.com’s Weekly Credit Card Rate Report, the average APR on credit cards is at a record high 16.71%. If you’re paying that much – or more – just to access additional spending power, you run the risk of accumulating more interest and a higher balance that becomes harder to pay off. Instead, you’re better off looking for cards where you may qualify for a lower rate, or working on improving your credit score so that you have better options in the future.

2. Get A Personal Loan or Consolidation Loan

When you’re working on saving money on low income, you may not want all of your savings to be going towards your debt repayment. Instead, look for options like personal loans or credit card consolidation loans from a company like Payoff, where you can qualify for a loan at a better interest rate than your card to pay off that existing balance, and you’ll have only one monthly bill going forward that includes all of your remaining debt.

3. Make Some Extra Money

If you’re focused on debt repayment, you’re looking for short-term solutions to help maximize the amount you can put towards your balances. Temporarily taking on some extra work, whether freelancing from home or picking up a second job, can help relieve your debt burden in a shorter period of time. If you’re already strapped for time, try taking surveys online with a reputable site like Survey Junkie or just go through your closets and storage to find some items to sell in a yard sale or online.

When you’re living on a low income, you don’t need to sacrifice your comforts or enjoyment. But when you implement some of these tips as part of your daily life, you’ll find that you have both, more money to save for your future and more to enjoy now. If you’re worried about splurging on nights out or other forms of entertainment, set up a separate place for money that can be used for fun – now you have a part of your budget dedicated to help you live life to the fullest.

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