If you have a fixed income, you may find it challenging to budget, save, and spend without feeling broke. Several years ago, I struggled with a low income and found money so frustrating. I felt like I could never keep enough, or save enough and it was always hard to make it to the next payday. While it may be harder to manage money with a low income, it’s not impossible.

Below are some helpful tips I followed along with some tips recommended by others to help you manage money with a low income and thrive.

1. Create a Budget to Maximize Any Savings

This is the most important step to follow regardless of how much you earn. If you want to manage your money better, you need to know what you’re managing in the first place. Track your income and expenses to see how much is going in and coming up.

Maybe you always find yourself in the red or perhaps you’re wondering why should I budget and how can I save when there’s barely enough to go around?

I encourage you to keep reading so you can use some of the tips in this post to help you cut your spending and save more. Budgeting will help you keep track of all your expenses so you can begin to spend and save with purpose.

“Creating a budget can help you start small in terms of how much you can save,” says Robin who blogs about personal finance at A Dime Saved.

Robin actually started a great habit of only saving $5 per month in her retirement account despite not making a lot of money.

“It’s important to focus on small financial victories and realize that just closing the gap between expenses and income is a big deal.”

HSA or IRA accounts are another savings opportunity out there for people notes another personal finance blogger

“Try to find an account that gives you a tax deduction for contributing, such as an HSA or an IRA, so that your savings create a virtuous cycle: you save money in the account throughout the year, then you get a bigger tax refund, then you have more to save the next year!” said Steponee who blogs at Poorer Than You.

2. Consider Using a Cash Budget

When money is tight, it can be tempting to overspend with credit cards or even worse, take out a payday loan. I’ve found that the best way for me to control my spending in certain areas was to use a cash budget.

With a cash budget, you put your money for each spending category in different envelopes and spend as you normally would each month. However, when the money runs out and the envelope is empty, you can’t spend anymore. Using cash can retrain your mind to only budget what you have and spend more mindfully. Yes, this may require some sacrifices but it can be worth it long term.

“A lower income means you have to be even more deliberate about where you spend your money and a budget will help you know exactly where it’s going and highlight areas where you can make changes,” said Sebastian and Tawnya who blog at Money Saved and Money Earned.

There are others out there that believe a cash budget is a way to go. If you can avoid credit cards please do so. Try and stay away from the extra debt if you can.

“Don’t pay anything with credit cards…Focus on yourself, your more immediate needs and avoid instant gratification purchases.” says Carlos from Finntt

3. Use Discount Grocery Stores and Make Freezer Meals

This sounds a lot better than trying to survive on rice and beans each day – because it is. I love shopping at discount grocery stores like Aldi even to this day. We try to keep our food budget at or below $400 each month, but several years back I had an even lower budget that I could not afford to go over.

“There may be a more limited selection of items at a discounted grocery store, but the savings can be huge,” says Jarek, blogger at Time in the Market, who also recommends looking for sales and buying food in bulk at warehouse club stores like Costco.

“Sometimes Costco will have a deal for $8 off an entire pork loin,” “You can pick up a huge loin for $5 or $0.40 per pound, freeze it and you’ll have meat for weeks.”

Another way to save money on food and groceries is to prepare for the weeks ahead with a meal plan. I’d even recommend going a step further and preparing a few freezer meals.

“Learning how to cook and buying food in bulk that you can freeze can be a great way to save money,” says Greg Mawer who blogs at Mawer Money.

Sometimes, you may be too tired to cook in the evening and the idea of spending extra money on takeout can sound appealing. If money is tight, it’s better to eat at home and you can prepare meals in bulk in advance that you can freeze ahead of time for instances like this.

4. See If You Qualify For Low-Income Discounts For Bills

“Call your cell phone company, utility providers and creditors to ask about low-income discounts and other ways to reduce your bill” says Michael Galvis, managing editor of personal loans and debt at LendingTree.

This is something I can also personally recommend. There may be low-income assistance programs available to help you lower your bills. One of the most popular programs is energy assistance commonly referred to as LIHEAP. This can help you lower the costs to heat and cool your home.

” Get help with living expenses if you qualify for government assistance programs.” says Kathy from the Baby Boomer Super Saver

More details about government assistance programs can be found at https://www.usa.gov/benefits

You may also be able to qualify for more affordable internet or cell phone rates. Comcast offers an essential internet package that is just $9.95 per month. To qualify, you need to be eligible for public assistance programs in your area. Cell phone companies may offer low-income discounts as well or you can always consider affordable prepaid companies to help you save money.

5. Find Free and Cheap Entertainment in Your Area

You don’t have to spend a ton of money to have fun with friends or your family. There are lots of opportunities for fun and frugal entertainment around you.

When my son was younger, I used to love taking him to free family events and outings in our area. I took advantage of free zoo and museum days, parks, and discount days at the local pool during the summer.

“Check out museum and art center passes that may be offered at your local library,” says Monica founder at Planner at Heart.

Your local library and park district can also be great places to find budget-friendly or free entertainment.

6. Create Additional Sources of Income

If your income is too low then maybe you should consider finding another form of income. Having that additional source of income can help you achieve your goals and manage your money.

“Create additional sources of income. Sometimes, it’s just too impossible to make ends meet if your income is really low and the only way to get through this is to earn more.” says the Thrifty Hustler

The extra income source can be something you enjoy. Don’t settle for something you dislike if possible.

“Boost your income by turning hobbies into another cash income stream.” says Kathy at Baby Boomer Super Saver


Finding ways to manage money even with a low income doesn’t have to as hard as you might think. These tips about how to manage money can be just what you need to help get your finances turned around.


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