Fluid Money Management: How to Budget on a Low Income 

By Fluid Finance

How to Budget on a Low Income 

It may seem like advice about your finances is for people with higher incomes. You might ask,  “Can you budget when you feel like you have no room to make savings?” You can do it! It’s essential to see exactly where you spend money and make adjustments when your next pay-check comes. The first step to financial freedom is to organize your life, and one of the best ways to do this is to make a budget. Life is not rigid, life is fluid and your budget should be too.

To begin with, let’s look at some reasons why you should budget, then how to budget with a low income.

Why make a budget?

Managing your money with a budget keeps you on top of your finances and provides other benefits such as:

Helping you focus on your financial goals

Planning for the future and working toward a financial objective allows you to plan big purchases, like houses and cars. When you create a budget, you’re setting boundaries around your spending; it keeps you on track. Sticking to your budget brings you closer to achieving your financial goals (your dream house, car, or vacation).

Saving money

Many people find it difficult to save. Some of us commit to saving money when we want to make a big purchase; so, as long as we buy a new gadget, clothes or a pair of shoes(that isn’t saving; It’s delayed spending.) When you live on a budget, you eliminate waste and increase the amount you can save. A budget holds you accountable for all the financial decisions, so you don’t splurge, and helps you save for investment, retirement, or a long-term purchase.

Creating Emotional Security

Did you know financial insecurity is one of the leading causes of anxiety? The stress of your finances can cause all sorts of health problems. Knowing that you have a budget to fall back on gives you confidence and a sense of security and control. Budgeting helps you to put your money in the right places and find ways to pay off debt; so you keep more of your money. Paying off your debt, or having long-term savings, can bring relief and less stress.

How to make a budget

We have seen some reasons why budgeting is crucial. Now, let’s talk about how to budget with a low income.

You should understand that it’s still important to see where your money goes even if you do not have extra at the end of the month. There are several budgeting strategies to suit different personalities, but here are the basic steps to get started:

Calculate your income

Your monthly income is the amount you take home on each payday and other monthly allowances, such as investment dividends, odd jobs and your regular income (don’t include gifts unless it’s a recurring gift). If your income varies each month, use the past three to six months to calculate an average amount.

Calculate your monthly expenses.

Next, add up your regular monthly expenses. These expenses are any regular spending, including rent, utilities, childcare, internet, food, transportation and other recurring bills. Next, come the discretionary expenses, or those that are optional. They include entertainment subscriptions, birthday gifts, etc. Don’t forget to add impromptu costs like car maintenance and home repair. Review your bank statements and store receipts to factor in other expenses.

Calculate what’s left 

Once you deduct your monthly expenses from your monthly income, it’s time to decide where the rest goes. For instance, your income is $2,000 a month and your expenditures are $1,500; with the remaining $500, you could save $300 each month for a new home and deposit another $200 in an emergency savings account. Whatever your choices, budgeting will help you take control of your financial future. If your monthly expenses exceed your monthly income, you’ll need to revise your spending habits. Cut out any unnecessary spending, and reevaluate your budget.

With the devaluation of currencies in many countries, where you save your money and the currency is as important as the budgeting itself. Fluid Finance provides you with multiple currency choices, including US dollars. You can open a free account from anywhere with just an email you can earn up to 4% APY on all deposits.

Monitor and evaluate your budget 

Monitor and evaluate your budget because your income, expenses and spending habits will change over time. Always ask yourself if you are on track and be aware of how much you have available. You can experiment with tracking all your spending for one week or a month and evaluate your performance. on’t start budgeting at a period when it’s going to be hard to stay disciplined. Use a  budgeting app or get a diary to track all your expenses and reward yourself for staying on budget (you deserve it for being disciplined!)


If you have a low income, budgeting is worth the effort. It may be challenging to create a budget and seem difficult to get in good financial shape. However, you can work your way to achieving financial independence through the savings you’ll get from budgeting. If you are looking for the best way to save and earn interest on your savings, then you should sign up with Fluid Finance. Read about our competitive interest rates and investment products here.

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