“Wealth consists not in having great possessions, but in having few wants.”
– Epictetus
You could be a student or a working professional, the demon of “over expenditure” will always find you. You would think that a monthly budget of say, $2,000 can get you by.
But boy, aren’t you wrong.
According to the U.S. Census Bureau, the poverty line for a person under the age of 65 is $1,300.
2000 dollars don’t seem a lot now, do they?
We see people struggling with money issues all the time, but unless you’ve been there, it’s hard to understand what it’s like to manage a limited budget. People with a low income have their own money-management strategies. Not adopted by one and all, they are but exceptionally valuable skills that must be employed by individuals of all income groups to keep their finances on solid ground.
Here are some pointers to avoid a financial crunch:
- Plan a Budget
It’s understandable that with monthly bills and overhead expenses it becomes quite difficult to manage finances. However, if you make a budget and stick to it by finding money-saving alternatives, you might escape a financial crisis. A little planning can make a world of a difference between living comfortably and amassing change to buy a loaf of bread.
- Always be aware of how much money is coming in and where it’s going eventually.
- Keep a tab of all your expenses by either writing it down or using an online program like Mint.
- Add the expenditure incurred in a month and compare it with your income.
- If expenditure is more than the money earned, start cost-cutting – immediately.
- Save every penny
When we talk about saving money, every dime is equally important. In our lives there is always something or the other to spend on. From costly drapes to a new lamp, the list of everyday purchases is endless. Living on a small income makes it exceptionally difficult to save for emergencies like medical fees or a retirement fund. However, there is no need to despair.
- Request your bank to transfer a fixed amount every month from your salary account to your savings account.
- Do not squander any loose change. Collect it in a box and add it to your savings account. You will be surprised at the number of coins amassed at the end of a month.
- Start living modestly
Who does not like to live luxuriously; but it can sure as hell leave a hole in your pocket. Most of us have large homes that we don’t really need. Simple living can improve your finances by a long shot as a major portion of income is dispensed on household requirements.
- Try to refinance your mortgage at a lower price.
- Find a roommate to reduce costs.
- Rent out a room or a floor to a paying guest.
- Go the eco-friendly way
Start walking to reduce dependency on automobiles. If the need for cost-cutting arises, minimize your driving as much as you can to save fuel costs. Petrol and diesel cost a bomb. Spending less in this domain can help save up a lot of money.
- Start multi-tasking. Accomplish maximum number of chores in one trip.
- Either walk or use a bike if you can. It is cheap, convenient, and good for the heart.
- Use all benefits
Officially, every individual is given special benefits by the government. Availing them is another matter altogether. Do you think you can pay enormous bills with your low salary? Medical benefits provide a respite from undue heartaches. Make use of your hospital financial assistance to save costs during an emergency. There are several other programs that provide help with utility bills or enhancing your job skills. You don’t need to be an expert in finance to figure this out, although a career in financial services can never hurt.
- Start cooking
Dining out or eating take-outs can get very expensive. Most individuals who don’t cook their own meals pay top dollar for food. You might think that you hardly spend anything on your diet but in truth, it takes away a major chunk of your income. Not everyone is Gordon Ramsay or Jamie Oliver, but cooking to sustain yourself is as delicious as any dish by these maestros. Purchase the ingredients in bulk or on sale. Make enough food at one time; it can be used for 2 – 3 subsequent meals.
- Take a secondary job
Even if you have a full-time job, one pay check is never enough. A little extra income is always welcome for paying debts, emergencies, and covering bills. A secondary job is one that does not interfere in your normal 9 – 5 schedules. It could be selling items on the net or taking tuitions in your free time. Plus if you have a hobby that can sell, go ahead with it. Be it painting, baking, photography, freelance writing, or working in finance as a financial advisor – there is no start-up cost and the job can be done in your own time.
- Save on health care costs
Endeavour to reduce your medical bills as much as possible. Use a store that sells drugs at a comfortable price. Check for sales and discounts before going shopping for supplies. Ask your doctor to prescribe generic drugs that are cheaper than branded ones. For minor ailments avoid buying medicines. Employ the help of simple home-made cures, formulas for which can be obtained online.
- Avoid buying items on MRP
If you have a limited income, there is absolutely no point in purchasing items on their maximum retail price. Almost all brands and stores have a sale season wherein articles can be obtained at a discounted price. If you are lucky, items of urgent requirement can be procured at dirt cheap prices. Sales happen on a seasonal basis. Make a list and go shopping during the big hauls.
- Start sharing
Pool resources to save money. Having pot-luck lunches, sharing baby-sitting duties, and carpooling can relieve financial stress to a great extent. Instead of living nuclear, go the joint-family way and invite your parents or siblings to live with you so that they too can pitch in for rent. Children can do odd jobs or work part-time for pocket money. Sharing is caring, and helps create a sense of common purpose.
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