Are you getting frustrated because you’re living from one salary to the next? According to CareerBuilder, 78% of the United States workers are in the same boat as you. It’s sad to note that many people find it hard to budget on their low income since most have no clue where the money disappears to.
Well, there is a solution to that, but it can only be achieved by creating a plan on how you spend your money. With a budget, you get to track your money as well as be able to avoid debts.
Here are the 6 creative ways to budget on a low income.
1. Create a Detailed Budget
Before you start monitoring your spending you need to know how much money you are earning and how much you spend per month. The reason being, with a low income, it’s easy to get distracted and spend more than you can afford.
However, you can change this by creating a spreadsheet on your laptop; use a downloaded app from your phone or just a pen and paper. Figure out as much as you can how much income you receive and how much you spend every month.
Although budgeting is not fun for most people, you should ensure you keep an accurate track of all your expenses for a month or two. Once you know how you spend your money, it will be easier to balance your income since you get to reduce specific expenses.
2. Cut Back on Unnecessary Expenses
In every household, there are usually four important things budgeted for which are food, clothing, gas, and housing. Once you budget for them make it a priority to cut back on unnecessary expenses such as gym membership, magazine subscription, cable bills among others.
If you are a fan of eating out or ordering take out, its time you start cooking more often. On the other hand, when it comes to gas, you can save by sometimes taking public transport, walking or cycling.
3. Always Use Cash When Paying Your Bills
If you are shopping for groceries, clothes or other personal stuff, it’s advisable to carry cash with you. You can separate the money by putting it in different envelopes and naming each of them to ensure you don’t overspend on the other items.
Start by making a list of the necessary items when going grocery shopping to avoid picking up on anything you don’t need. Also, before you leave the house make sure you search for the stores offering the lowest prices, discounts or special deals.
Note that, if you don’t spend all the money in one envelope, you can decide to add some extra non-perishable items or save the money instead.
4. Avoid Shopping with Your Credit Card
I know it’s tempting to want to purchase something although you can’t afford it at the moment. No matter how credit cards are good when it comes to earning points, you should try to avoid shopping with your credit card.
If you get used to purchasing everything with a credit card, there is a high possibility of finding yourself in a cycle of debt. This will not only force you to find ways to pay the money but also you will have to pay for it with interest.
5. Search for Free Activities and Events
Everyone likes to have fun once in a while. However, if it comes with costing you a lot of money and leaving a dent on your budget, then it’s not worth it. But hey! That doesn’t mean you can’t enjoy yourself even if you are on a tight budget.
If you’re a lover of sports, there are free tournaments such as soccer games, baseball or tennis open to the public within the year. You can also go for comedy shows, gallery openings near your home as well as free outdoor screenings, or live concerts in parks.
6. Make Sure to Pay Off Your Debts
No matter how much you want to stick to a budget, nothing ruins that than multiple debts. To ensure you stick to your budget, you should make a list of all your debts and start paying them off every month.
Start with the high-interest ones, especially personal loans and credit card debts. By doing this every month, you get to be debt-free in no time. Remember, without any debt, it possible to accomplish your financial goals as you tend to save more often.
It’s true creating and sticking to a budget can be hard. Nevertheless, that should not stop you from being smart and spending within your means. Be determined to leave the life of living from paycheck to the next behind and use the above creative ways to budget on your low income. Keep in mind, just create a budgeting method that works for you and stick with it.