Budgeting Tips for Low Income Family
If your income is limited, it is necessary to have a household budget. It may sound restricting to have a living budget, but it will help you work out your finances well. Having a workable family budget is actually quite liberating. It makes you in total control of your money, rather than letting your money control you.
> Keep Track of Your Spending – Before you can start a workable household budget, you have to know where you money is headed. It may be inconvenient to track and keep all the household receipts, but this will give you’re a clear picture of what your household actually spend and where you money goes.
> Work on a Budget – Implementing on a workable budget is the most important thing a low-income family will need to do in order to control their funds. Each member of the family should have an input on how to go about working out on a feasible budget. If all the family members has a say in working out on the budget, all are more likely to buy into maintaining the budget.
> Ample Budgeting – This is to make your household budget work in ensuring it is sufficient for the family needs. This is the time in the budgeting process when you might have to make some tough decisions, particularly if your income isn’t sufficient to meet all of your needs, much less your wants.
> Make Adjustments – If the budgeted expenses exceed the income, adjustments are needed. You need to re-evaluate if you need to increase your income, OR cut down on your expenses. However, increasing your income may not be an option in cutting your expenses because it will take some time to become effective. For example, you might discover you don’t earn enough money to support the amount you’re paying in rent. You might need to find a cheaper home or apartment but breaking your lease is expensive, so you might be better off moving after your lease is up. You might need to sell your gas-guzzler and buy a more fuel-efficient car.
> Emergency Funds – Typical knowledge says you need three to six months’ worth of living expenses saved up for a rainy day. When you live on a low income, every day is a rainy day, so saving th