Ignoring minor health issues or being worried about increasing interests in debts is quite common for low-income households. Whether you lack in managing your money well or couldn’t cope up with increasing expenses, whatever your particular distress is, you need to map and monitor your budget to diminish the associated problems and financial mistakes.
We understand how tough it gets to consider money management or budgeting when it comes to low-income families, where there is reasonably least room for financial inaccuracies. Thus, to assist you, we got you a guide covering tips to consider for low-income households while managing money.
Put Necessities First
You need to plan accordingly and have a clear picture of all those necessary expenses like housing rent, food and clothing costs. We recommend not having the mindset of ignoring rent and considering that to be a side expense. No! Roof is as integral as food. We know how fine it sounds saying your landlord won’t mind if payment delivers late even, but this could be highly stressful if they ask for instant payment.
On the other hand, have a planned food and clothing budget, where you decide how to cut cost or reduce cost by pondering over it well. Having a plan for slight costs may sound irrelevant but this truly helps a lot in the end.
Also Read: Financial Freedom- Stop Living Paycheck To Paycheck
However, we would also suggest thinking about reducing food and clothing expenses. You can always look for budget-friendly products to match your pocket, because every penny matters, especially in low-income family households.
Have small savings as Emergency or Hidden cost
There are plenty of hidden and sudden costs like vehicle repair, gifts, entertainment, or any other miscellaneous expenses, that appear out of sudden and we can’t ignore them. Especially for low-income households, these expenses end up being quite risky as you might end up finding other expenses unpaid just after paying these miscellaneous expenses.
Therefore, having a portion of savings for these hidden costs can work wonders. You can also think about Auto-transfers for these costs, as it helps in fixing saving and forgetting about it until required.
Buy after planning
Even if you have to spend a single currency or wondering to buy even the slightest item, have a budget plan and then proceed ahead. Don’t ever commit this general mistake by going to shop without a grocery planned budget and list of items you need. This could help you from buying unnecessary items and will affect your wallet positively. Sticking with a plan and list will also ensure you are avoiding overpriced items.
Have a secured credit card and checking account from an established bank
You can find yourself ineligible for the regular credit card, thus, there is an option for an individual like you to have a similar card to plan a budget and get financial assistance. This card is known as a secured credit card. Under the secured credit card option you are supposed to deposit a couple of hundred dollars, this may vary from bank to bank or as per schemes available. Once the holder of a secured credit card submits the amount and after a particular period, he gets eligible for borrowing against that amount.
Usually, after carrying a secured credit card responsibly, the applicants get eligible for a regular credit card as well.
On the other hand, you can also think about issuing a checking account. You might get yourself denied having access to a regular checking account because of previous unpaid bills or bounced checks. Here, you can go for alternatives like a secured one or online checking account. These alternatives have somewhat better cash checking services.
Take help from Government Assistance programs
If you are one of those low-income households you can take assistance from various Governmental and NGO programs accessible. You might find yourself eligible for Low Income Energy Assistance Program (LIEAP) which helps low-income families in paying miscellaneous yet integral bills like their heating and cooling home energy expenses and related repair costs. We would recommend you to educate yourself about all those Governmental assistance programs available and highly utilize them. Other than LIEAP, you can also ponder over The Supplementary Nutrition Assistance Program (SNAP). This program is for those who fall under the poverty line. SNAP helps people in gaining financial relaxations and financial helps to meet the livelihood requirements.
Make use of “Free Money” as much as you can. Low-income families can find themselves eligible for Earned Income Tax Credit (EITC) which gives a large amount of refund on income tax payments, helping people to have better fund savings.
Try reducing your expenses
If you have a low income, you need to focus on all those expenses you carry and then try reducing or cutting the costs wherever possible. You can ponder over entertainment cost and try to condense it to a minimum or if you put up in a rented house, you can think about switching to a small apartment to cut down home rent. Also, we would recommend not to ignore minute and miscellaneous bills like mobile phone recharge or television pack. It might look like these small-scale expenses won’t make big difference but it counts. Try exploring other schemes available, you can probably find ways to save cost.
To save more or to have fine budget maintenance, you need to take control and consider the amount to spend. Thus, initially select the categories where you need to spend and where you can skip. Keeping the budget lean is one of the best ways to manage expenses and proceeds.
Managing the budget and monitoring the expenses accordingly is not at all easy for low-income families. However, after following the right steps it can be done. We would recommend considering above mentioned steps and educating yourself well to avoid financial errors. If you work accordingly after having a well-planned budget and awareness, you will be easily able to keep yourself in a fine financial position even with a low income and tight budget.