Tips To Managing Money With A Low Income

by on July 19, 2012

Even though we all work so hard and deserve so much more than we get, there are many reasons that not everyone in the world is a billionaire. Maybe you’re a poor college student, or you haven’t hit your big break on Broadway yet, or you’re still paying off loans from medical school and life and what have you.

Whatever the cause of your low income is, managing money when you aren’t making a lot is about a million times harder than if you made hundreds of thousands of dollars a year. You really have to think about your priorities, you only have a small or nonexistent margin of error, and, if something crazy happens you could very easily be stuck financially in the dumps. And the bad kind of “I don’t have a place to live” stuck, not “oh no, I thought I could fit my hand in this honey jar but now I can’t get it out” stuck. Also, you apparently are Winnie the Pooh. Luckily, even though finances seem scary there are some simple ways to manage your funds that are so easy that Pooh could do it and still have plenty of time to romp around the hundred acre wood.

Don’t skimp on insurance. This can be really tough because it seems dumb to be paying monthly bills for car, house, or health insurance that you rarely use. While this is definitely annoying, in the long run it is worth it. It is better to pay your small monthly fee and be covered than be without insurance when you crash your car and have both a totaled car and a huge hospital bill to pay off. If you can afford to have even the most basic insurance, it could help you a lot in a time of need. Even though ninety percent of the time it seems useless, it is really a smart investment and the ten percent of the time you need it, well makes up for the ninety percent of time it seems useless.

money management tips for lower incomeLive below your means. This is actually great advice for everyone, but especially for people living on a low income. Basically, it just means that you shouldn’t spend all of your money just because you have money to spend. For example, just because you can afford to have an iPhone doesn’t mean that you should get one; instead of spending all of your money on the huge data plan, get a less expensive cell phone that does just what you need it to. The basic moral of the story is to save and spend wisely; we as a society buy a lot of things that we don’t need. If you eliminate some of those purchases, you will have more money to save or spend on other priorities.

Know your budget. Keep track of what you make each month. If you do this, you can make a budget that makes sense for your income. Then, instead of guessing prices and worrying about overspending (or, actually overspending) you will be prepared. Along with knowing your budget is knowing your priorities. If you want to be putting some money away for the future, plan your budget accordingly. A plan makes saving money and paying bills on time a lot easier; if you have a plan to follow that makes you set money aside, you are much more likely to do it.

Prioritize. Buy the essentials first! Bills should obviously come first, but once your rent and your insurance are taken care of you can decide for yourself what is most important next. Grocery shopping should probably be high on the list, along with basic amenities such as toiletries, towels, and tooth paste. Do all of your essential shopping before you even think about buying things you don’t need, like sportswear or the newest electronics.

Shop for a deal. Buy things on sale any time you can. Also, switch to using generic brand products. They are usually a lot cheaper than name brand products but are very similar. For example, medications that are generic have the same active ingredient as name brand products, so they actually do the same thing. When you buy a name brand product, part of your money goes to the brand and the conglomerate, which is why they are more expensive. Don’t spend your limited funds on a name when you can get the same product for much less.

Shop for value. While deals are great and you should always look for them to save money, you should also make sure that you spend your money on objects of value. For example, if you are buying furniture, you will ultimately save money if you buy sturdy furniture that will last you for many years than if you buy cheap furniture that is prone to breaking.

Don’t use plastic. Along with quitting using water bottles that destroy our environment, credit cards very often lead to overspending and debt, especially if you are swipe happy and don’t have the funds to back up your habit. If you don’t have an income that allows you much room with your spending, don’t take the chance that you may rack up debt and use a credit card. If you can avoid having even a debit card and stick to buying things in cash, you will have a much easier time controlling and limiting your spending. If you feel that you must have a card of some sort, get a debit/credit card that takes money directly out of your bank account so you do not have to pay interest. If you must have a credit card, shop around to find the one that has the lowest interest rate for you.

Oh dear, aren’t those things simple? That is what Winnie the Pooh would say, if he had money to manage. Above all, when managing your money try to stay calm, realize your goals and push on. Because, well, as we see when Pooh puts his hand in a jar of honey, sometimes you get yourself into sticky situations that you could have easily avoided with a little common sense. So, if you start out with these tips, you can avoid being stuck!

{ 48 comments… read them below or add one }

Lee August 3, 2012 at 4:17 am

I really enjoyed reading your blog. Was actually looking at car insurance blogs but yours is very relevant to all aspects of daily expenses. The monthly payments people pay for all sorts of things . But especially insurance are such airp off and is basically a charge for those who can’t afford to pey in one lump sum.

Very informative thanks
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Brij Taneja August 9, 2012 at 2:49 am

Your article is very realistic. The approach is so simple but you have to do it to be financially worry free.


kevin August 17, 2012 at 1:19 am

Most of these tips are common sense, but they are also probably things that people don’t think of of when they are making choices such as shopping or budgeting. Research is the best advice that you gave the more information you arm yourself with in any situation the better.


Felicia Gopaul August 24, 2012 at 2:11 pm

The best thing to do if you have low income is to know your spending limits, when the budget gets tighter you should stick to your priorities. When shopping, always check on sale items and take advantage of discount coupons.


professionaltightwad August 29, 2012 at 4:13 pm

Low income people have the most potential for greater savings in the long run. When you get a raise, and you will eventually, don’t live any different and put that raise in the bank. Or if you really need to, bank half of the raise. Look for little ways to increase your income and do the same thing – bank at least half. The biggest cause of debt is having no savings in an emergency so the key thing to do is build an emergency fund as soon as possible.


pocs August 31, 2012 at 9:40 am

Many of these tips I follow and are common to my way of thinking with my income. I also believe people with strict budgets and low income are more thrifty, mire frugal and know the value of knowing their spending limit. I also strive to spend less than my budget allows. It doesn’t always happen, but when it does I feel accomplished. I also would add couponing and rebates to your know your budget or your shop for value. This can really help stretch your dollar. I also repurpose many things to avoid buying items. Plastic jugs can be cut to make great scoopes.


Mitzie Hallisey September 1, 2012 at 10:58 am

I am a student and find it difficult saving money. I think these tips are really useful and I am always relying on my debit card, however this year I am going to take your advice and just use cash instead.


cmarten September 6, 2012 at 8:25 am

These common sense tips are very good, but I would go one step further into creative ways to save money. Grow a garden, shop thrift stores and garage sales, use coupons coupled with sales like those ‘crazy coupon ladies’ you see on the news. Most important of all, stop buying things. While your income is low, you probably do not need a new couch. Learn how to fix things yourself and get creative with decorating. Some collapsed cardboard boxes can hold up a sagging couch, and a bedspread can become an attractive cover for it.


Rick September 24, 2012 at 2:28 pm

Chris, The best way to get a handle on finances is to write it down. Looking at your obligations on paper is a sobering way to stay in check when you’re digging for the pocketbook for frivolous unnecessary items.
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Michael September 25, 2012 at 1:30 am

Hey Chris.. these are simply fantastic. Actually these tips are very common but all of us overlook these and again keep using debit cards even if we end up money resulting in debts. Thanks for this post. I’ve bookmarked it and will keep these in my mind.


Frank Steiner September 28, 2012 at 2:27 am

Your tips are great but it is difficult to be self-disciplined to curb shopping impulse. Living below means for a short period of time is difficult but doable; however, not using plastics is not an option nowadays.
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Svetlana Koslov September 29, 2012 at 2:21 pm

Those are all great tips but the only problem is putting them to practice…I just bought health insurance for the first time in my adult life and it wasn’t an easy decision..I tried living below with no success. I guess since I’m a girl I love to shop which gets in the way of living frugal
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Joel October 15, 2012 at 12:26 pm


You have given great tips.I was searching for a car insurance blogs and your blog is very helpful for me.

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Riley David October 23, 2012 at 4:29 am

You have listed some practical tips easy to follow. This is one of the post that I like most. I apply all of the tips mentioned especially now I’m buying a furniture from an online store that gives furniture deals and assured quality. Thanks for sharing this post! Keep posting.

Reply October 25, 2012 at 2:47 am

Thanks for this, Chris

I believe that having a budget and sticking to it is a BIG Part on managing money.

I am starting a blog on personal money finance you can drop by and see.

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Junk Cars NJ October 30, 2012 at 2:38 pm

Excellent post on different ways to save money and certain steps to get ahead financially. Its never about how much you make but how much you save is the real importance. Some people who make less money sometimes net more income saved than people who might have highers incomes due to expenses and liabilities. Thanks for your contribution to the financial community.


bariatric surgery mexico November 1, 2012 at 12:12 am

Helpful post on any ways to save money and certain steps to get ahead financially. Its never about how much you make but how much you save is the truly importance. Several people who make less money sometimes net more income saved than people who might have better incomes due to expenses and liabilities. Thanks a great for your contribution to the financial community.
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Brenda Scott November 2, 2012 at 12:54 am

A very great tips on handling money wisely especially when you only have a low minimum income..this is very useful.I can apply it for my self and forwarded this website URL to my friends.

Reply November 5, 2012 at 5:40 am

I enjoy your post, thanks to share helpful information. I will follow your tips to save and manage money. There are many ways to save money with a low income. Insurance policy is a smart move to invest your money. It is no more a potential amount for your old age, but a necessity to save your money.
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Jobs in Care home November 8, 2012 at 10:51 pm

Wise suggestions ! We should avoid credit cards , its a good way to control the excessive flow of money. Simple living and high thinking is always appreciated. Try to avoid the company of those people, who are more into show off. Buy an insurance that covers up most of your needs. You can look for part time jobs in weekends. This extra income, gives you enough room to spend money freely.


Mary November 9, 2012 at 8:24 am

Thanks for helpful information for saving money, I would say that you should have a budget first and try to purchase those items which are very necessary for living day to day life.
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Michael November 13, 2012 at 1:54 pm

Good information. Recently I have problems with money management and these tips will help me with solving these issues. Its funny to see that several tips can help in managing your money much better.I do think that debit card work better than credit cards as it limits you in your expenses.


Short term car insurance November 16, 2012 at 5:13 am

Definitely your post provides a great and useful resource every reader must adhere. This is truly a must read and admire. Thanks a lot for sharing…
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Patrick2Go November 18, 2012 at 9:38 pm

I agree with the part about insurance. Budgeting out a small monthly fee to get a sense of security if something goes horribly wrong is much more beneficial then taking the gamble of not having insurance.
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Jason November 21, 2012 at 8:15 pm

This is a well written piece, all the tips that you gave nailed to the point on how to protect your money from being just blown away. click here


Polly November 23, 2012 at 7:59 am

Can’t help but to bookmark this page for future reference. There are many financial blogs out there but certainly this article stand as one of those helpful sites you can get from the internet. I’ll definitely apply saving atleast 10 to 20 percent of my income and will always keep in mind the things you’ve said here. Thank you for making this wonderful post.
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Credit Counseling November 29, 2012 at 2:14 am

That is what i am looking for. This is really informative and helpful post for newbies who actually started earn money with a low income. . Thanks for your shares.


Writing research essays November 29, 2012 at 10:36 pm

i am always in problem how we manage money system,thanks for this helpful post,that is simply expressed but it utilitarian,i appreciate it…
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Sean December 4, 2012 at 4:33 am

Thanks man!! your post is quite helpful for me since I am a newbie and earn money with low incoming.


Kashan December 7, 2012 at 10:12 am

Very nice post. I just stumbled upon your weblog and wanted to mention that I have really enjoyed browsing your blog posts.


Stephen Strings December 19, 2012 at 7:07 am


I completely agree with your points on money management with low budget but if personally you will ask me about it then I would say though money management is very important but I would prefer spending it on and what I want otherwise then what is the meaning of working hard and earning. No doubt with low income priorities towards saving must be more but then working hard to earn will be useless. I know I may sound bit out of topic but its just my personal thought!

I really appreciate points stated by you!

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TheSeoPortal December 24, 2012 at 10:50 pm

Live below your means or buy thing which are only necessity is very crucial. Don’t spend on things which you need for luxury and spend only thing which is must for your living
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ricky December 27, 2012 at 9:34 am

well as a teenager i should learn these things from now and it will help me to handle my wife easily too..lols…btw nice article…just a first visit on your website and it is worthful
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SEO January 6, 2013 at 11:43 pm

I am the person who don’t have much to spend and this is the reason i think i should follow your advice of prioritizing
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Bluetooth speaker January 17, 2013 at 12:49 am

Your blog is very well presented. Indeed, it is difficult to survive these days, but doing the right trick and steps would really help us.


Marc January 18, 2013 at 11:34 pm

Perhaps nothing is more timely and useful than your guide to managing money on a low income. There are not many of us who are not looking to save money, while at the same time, not sacrifice too heavily. With the New Year came a resolution to cut back on spending. A week into my resolution, however, I am having a hard time following through. Thanks to your useful guide, I have been able to get back on track and work toward a year full of wise spending, and lack of over-spending. Thanks!


Powerstroke Diesel Performance January 25, 2013 at 11:30 pm

I agree that having a budget is a good idea and it helps you learn how to save money. I was listening to a financial advisor the other day and he suggested that everyone create an envelope system in which you determine how much money is allocated for each expenditure and place the exact amount in cash in the labeled envelope.


Edward Moore January 31, 2013 at 7:35 pm

For me, the number one tip from that is to know your budget first, and prioritize all the things you want. Should know which will be the first one to prioritize. As early as a teenager, we should teach them on how to save money from their allowances.


Amy Carter February 12, 2013 at 2:10 pm

Money management is a critical factor in the life of a business, especially as a startup. Many companies do not realize the value of retained earnings for growth and development. I agree with Edward, you must set up a budget initially but also set up your goals for the next budget and how you want to allocate your resources.


BrianAnderson March 22, 2013 at 3:59 am

I really don’t know where you have gotten these ideas from but I was impressed. It is very hard for me to manage the money I am getting from my low income. I am not sure if this will apply to me because I just simply have a lot to settle first, before I can save something for whatever purpose.


SouthAfrican Casino March 28, 2013 at 9:08 am

I’ve been a student before and up to now I still believe that prioritizing things are vital in managing money. Although you earn more or less, it is still important.


Nia May 7, 2013 at 5:25 am

Very realistic Article, Completely agree with you. It really very difficult for people to manage money when the Income is low. even I have been trying to manage money from last year but not fully successful. Hope your tips will help me out. Thanks for really useful tips.


Geary June 11, 2013 at 3:39 am

Money might be a problem for everybody! Thanks for sharing your thoughts and I am sure a lot of people can learn from your tips.


Ian Harvey July 26, 2013 at 6:19 pm

For some people these are little tough tips. Seriously those that are not yet addicted to good management would not enjoy to follow them.


Richard Thompson July 29, 2013 at 12:51 pm

I think making sure you have insurance is one of the most important things. It can be extremely dangerous to not have insurance, and it’s especially not worth the small amount of money you’d save each month by not having insurance. Good spending habits are key to managing your money with a low income. Living below your means is a great tip for everyone as well. What I would suggest on top of all of these things is try to find a way to improve your financial situation. While almost nobody chooses to have a low income, a lot of people do become complacent with their position, thinking that they’d never be able to change it. That just isn’t true. Practice good budget, but also look for good ways to improve your life situation.
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Stu Dent August 10, 2013 at 9:15 pm

Interesting. Great tips, I for one find though that I save more money when using a card (plastic) if I really think about it. Of course it is easy to fritter away money on plastic however credit cards protect you from scams, defective products, and offer bonuses. Clearly the compnay gets a lot out of it but if you use it right you have save a few bucks too.
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Akaahan Terungwa August 28, 2013 at 4:14 pm

Hi Chris, of all the points, living below your means and shopping for value make the greatest sense to me! Why? Because they are the foundation of a financially sound life!! What do you think?
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qrops January 28, 2014 at 12:29 am

Hi.. i love reading your article. it shows how to manage money. it helps especially to those who are new in business.. thanks a lot.. im looking forward to read more about like this article
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