2014). That’s not much money. In fact, when you break down that amount of money into a monthly amount, it’s only $4,328 per month. That’s before taxes. When you average out taxes for most people, it’s just over half that you get to bring home. Imagine living on less than $3,000 per month. It might be doable in an area where the cost of living is cheap, and it might be doable if you don’t have kids. Add a higher cost of living area into the mix, get a mortgage, buy a car, have a baby, and you can’t afford to survive without a lot of creative living.
The unfortunate fact is many people can’t live on that kind of money. It’s not enough, but there are people who live on far less. The income diversity in this country is exceptional, and people get creative learning to live on a low income in many areas. What makes this math even more depressing is the fact that $11,670 per year or less is considered low income. This means you could make $12,000 per year and not be considered low income. You can’t afford a mortgage, car, insurance, cell phone, or groceries only $1,000 per month before taxes, but you really can’t after. If you have more than one person in your family, add a little more than $4,000 to that number per person. That’s considered low income. Whether you’re low income or in the middle class just struggling to get by, it is possible to live on a low income and handle your finances. You just have to know how to do it.
Create a Strict Budget
Everyone should budget, no matter how much money they make. However, most people don’t bother. Budgeting on a low income is necessary. You need to add up your monthly expenses, your income, and you need to subtract your expenses from your income. Your expenses are everything you spend throughout the month. This includes everything you need to survive, including food and gas. Everything you don’t need is not considered a necessity and shouldn’t find a place in the budget.
If you have money left over, save it. It’s going to become even more important for you to have a savings account, an emergency fund, and retirement savings on a low income than anything else. These things should be made a priority, and you’ll need to find ways to have fun doing things that don’t cost money.
Find Fun For Free
It’s not easy to live on a low income, but it’s doable. The best way to live on a low income and still have fun is to find free fun. Does your church offer activities during the holidays your kids can enjoy? Do you have a local park you can visit? Is there a program in your area that allows your kids to see movies in the park on a Friday night? Do you live near a movie theater that offers dollar movies during the summer? These are all great ways to still have fun even without much money.
Get Creative
Sometimes the best way to live life is simply. Doing too much, having too much, and focusing on what you have or don’t have can make you miserable. Living simply is often the most enjoyable way to live. You don’t need to go out on a Friday night to have fun. You can stay home, put the kids to bed, make dinner and share a bottle of wine on your porch for very little money. You can make presents to give during the holidays, bake cakes together instead of buying them, and you can do your laundry on a line outside. There are so many creative ways you can save money when you have very little income.
Lower Your Monthly Expenses
When you have very little income, try to have very few expenses. Don’t have car payments. This leaves you in a good financial place, and it also provides a bit of additional freedom if you ever need to apply for title loans in Chicago when cash is short. Don’t spend money on credit cards. Instead, do things like call your phone company and ask for a discount or close your account to open a cheaper one elsewhere. Most companies want to keep your business, so they’re willing to work with you. It’s not difficult to manage, but it’s difficult to stay on track if you’re paying too much for things you don’t need.
The cost of living in most places far outweighs the income people bring home, and that’s a sad fact. However, it’s the way this world works for many families. There’s nothing wrong with living simply, so try it out. There are tiny houses that offer you a chance to make less money while enjoying life. There are many outlets on the internet for creative types to sell their creative work when money is tight. There are websites designed to let people with a talent work for a few bucks for other people, if you want to make more money from time to time. There’s always a way to get by with a low income. You need only learn how to maximize your potential while simultaneously minimizing your living expenses to get by.