How To Budget on a Low Income

A budget is a spending plan based on an individual’s income and outgoing expenses. People generally calculate how much money they make, whether that be by month or year, and budget their money accordingly.

Budgets are a great way to save money, whether you have children to take care of or if you’re a working couple. Budgeting your money can help free up some spare cash while ensuring all of the essential everyday living costs, such as utility bills, rent, and food, are all taken care of.

Drag the slider below to the amount you'd like to borrow
By clicking “Apply Now”, I consent and agree to the Privacy Policy and Terms of Site Use.

Why is Budgeting so Important?

Budgeting at any time of the year is important as it allows you to stay on top of your finances and outgoings, making sure you aren’t spending too much or living beyond your means.

If you maintain a consistent budget, you can also look to save a lot more money to use for larger purchases or for a rainy day.

It is also a responsible financial practice to make a budget and stick to it each week or month. When it comes to applying for loans and even a mortgage, the lender will often need to know how much money you spend and how you budget, so maintaining a good budget is particularly important.

Make a Budget


First, let’s explain how to make a budget, which is the most important step in organising your money. Creating a budget that works for you should be the first step when looking to budget effectively on a low income.

Write down what you earn, what you spend, and where you could potentially cut costs. Suggested areas to cut costs include any ongoing subscriptions you may have, such as Spotify, which you may no longer use regularly.

Once you have understood what remaining money you have left each month, you will then be able to budget effectively and will see where you should use your leftover money.

Look at Your Housing Costs

For most people, housing costs are the main bulk of their outgoing expenses. For those with a lower income, housing costs will likely be one of the highest costs for them. Whether that is rent or mortgage payments, you will also need to pay for bills such as water, electricity, or gas.

A great way to free up some more cash is by researching alternative energy providers. Switching providers for your utility bills might be a great way to reduce your overall costs. In addition, if you are moving soon or perhaps are in the position to do so, you could look to rent or buy a much smaller place.

Food Shopping Costs

Food, no matter your income, is an essential cost. However, if you are on a lower income, then food shopping is a great way to budget and have some spare money at the end of the month.

Some of the ways you can save money on food shopping are by looking for reduced food items or buying products with special deals. In addition, keep an eye out for any vouchers or coupons offered by charities or supermarkets, which could help those struggling with the costs of living.

Meal Plan

Meal planning, alongside food shopping, is another great way to save some more money on your food expenses. Even if you have a busier lifestyle, meal planning before the week begins could save you both time and money.

For instance, meal planning can help save you the added costs of dining out. When eating at restaurants or ordering takeaway, you’re likely paying more for the meal. While meal planning is an added chore, it does save you from paying more to eat out.

Look For Alternative Entertainment

Entertainment, though considered a luxury for some, is a large area in which people often overspend. Budgeting entertainment does not mean you can no longer enjoy yourself. It simply means that you can cut costs in certain areas to help you save more money.

Popular entertainment subscriptions include Netflix, Spotify, and Apple Music. In addition, another expensive form of entertainment may be visiting the cinema often. Nonetheless, there are ways to cut costs in this area while still enjoying life.

For instance, cancel any subscriptions you no longer use or try to use family plan subscriptions (either with family or friends), which are often more cost-effective! In addition, you could even try out alternative entertainment sources, like visiting a local library, nearby parks, or practising cooking skills for family and friends.

Even on a lower income, you can still find alternative entertainment as well as ways to cut costs.

Automate Your Savings

Savings can always be a worry when you are looking to budget, especially if you feel that you will not have enough money to be able to save, which may lead you to borrow money in the future.

However, a good way to ensure you are saving money is by setting up automotive savings. If you automate your savings, then you will not have to worry or feel anxious about doing it yourself.

This will happen automatically, and it will allow you to budget effectively and have savings that are consistently growing for when an emergency might occur. No matter the amount you save each month, it will definitely help you financially in the long run.

Author Maggie Clarke
Maggie Clarke Content Ops Lead
Maggie leads the content operations team at She is an expert on personal finance, by way of a lifetime of gathering practical knowledge on what to not do with your pocketbook. When not blogging about money, Maggie can be found rambling through the roughest terrains. She considers herself charming yet troublesome and would love to meet you someday, just not today.
This website uses cookies in order to give you the best experience while using our service. By continuing, you agree to our Cookie Policy.