# How to Budget for a Low-Income Individual

Written by miriam c
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When you have a low income, creating and sticking to a budget is essential. A low-income budget looks at expenses and sets priorities so that the most important needs are met first. The focus of a low-income budget should be housing, food and utilities. After that, you can look at other items and adjust expenses accordingly. It is not difficult to create a low-income budget, but it can take creativity to make it work.

Skill level:
Moderate

### Things you need

• Income amount
• List of expenses
• Calculator

## Instructions

1. 1

Determine the income for the individual. If the income varies, then create a budget based on the lowest possible income. It is essential to know the correct income in order to create a budget that will work.

2. 2

List the set expenses such as rent, utilities, car payments, insurance and other items that are necessities. Things such as cable television and Internet are not necessities and should be listed in a later step.

3. 3

Set aside a set amount for groceries. This does not include eating out, but should be enough that the person can eat well-balanced meals each day. The food budget should focus on healthy meals, but not necessarily be large enough to include expensive cuts of meat or other luxury items.

4. 4

List the other categories in the budget. This may include clothes and luxury items such as cable television, gym memberships and cell phones. Although these may have a set monthly fee, that does not mean that they should take priority over the other expenses in the budget.

5. 5

Rank the items in the budget according to the importance to pay them each month. Housing, food and heat are the most important items. After that, you should consider transportation costs and then other expenses.

6. 6

Add up the expense amounts and check it against your income total. If your expenses are greater than your income, then you need to reduce the amount that you spend each month. Begin at the bottom of your list, and cut back on expenses as much as you can. Do this until you create a budget where the income matches the expenses.

#### Tips and warnings

• If you can find any extra money in your budget, you should put it toward savings. Then you can create an emergency fund that you can use for unexpected expenses like car repairs or medical emergencies.
• Consider getting additional training or looking for a better job in order to raise your income so that it is easier to pay all of your bills.

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