If you live on a low income and expect to continue to pay your bills, feed your family and make it through unexpected emergencies without going into debilitating debt, you absolutely need a plan. This plan will need to explore the support organizations near you as well as teach yourself how to maximize your budget. Without good personal finance awareness and a plan you may find yourself in stressful financially situation – where one unexpected expense such as car repairs can send you over the edge.
Maximize Income, Lower Expenses
The first thing you need to do is maximize your source of incomes and look for ways to lower your monthly expenses. In order to increase your income, you may need to look at taking a second job or developing a hobby that can help add some money to your income. If those are not viable options you can look at government or non-profit organizations grants, loans and entitlements. Ensure that you are receiving income from all available sources. First look at your entitlements from disability, unemployment income, old age or social security payments and ensure you are receiving the maximum benefits that you are allowed.
Next, look to local organizations that help out low income families or individuals in different ways. This could include helping you with monthly heating bills in the winter, providing a special grant for fruits and meats on a monthly basis or other essential item loans or grants for daily living necessities. These can all lower your monthly expenses helping you budget for a better quality of living. Many states have heating aid programs for low income families during winter months; use it to your advantage. Look at other ways to lower your expenses such as taking mass transit instead of paying for a car. Local food and furniture banks can help lower expenses significantly and avoid those large one time payments that throw any budgeting out the window.
Plan and Budget
The problem with low incomes is there is just not enough money to go around. You will need to expertly plan and budget every dollar you have to enable you to make it through each month without giving into the temptation of getting a pay day loan. Planning and budgeting combined with the advice above will be one of the only ways to avoid the dangerous cycle of getting short term loans that only harm your financial position.
If you look at all your money coming in and all that goes out in a month that is budgeting. When you have more going out than coming in, you have a problem. This is when increasing your income, lowering expenses and budgeting properly will save you from these nefarious short term loans. The interest rates, deferral and rollover fees are simply too much to even consider them a viable option. Instead focus on planning for every dollar made to be spent wisely. Also, plan for your impulses; this allows you to treat yourself thus ensuring that you do not over indulge and spend money unnecessarily.
Through careful planning you can make it on a low income if you also seek the help of programs meant to aid those in your position.