How To Make The Most Of A Small Income

Looking for ways to help make your small income go a long way? Despite what you might think, having a small budget doesn’t have to limit what you can or can’t do. Here are a few tips to help you make the most out of a little.

Plan Ahead. Make a Budget

Whether you make $100, $1000, or even $1,000,000, planning ahead is essential to maintaining your finances. The first step in making the most of a small income is to actually take the time to create a monthly budget. Sounds easy, right? It is; the hard part is actually sticking to it.

The best way to make—and stick to—a budget is to set small goals for yourself. Start small and work your way up. For instance, try saving a set amount one month, and the next month try to save 5% more. Work your way up to saving a little more each month. Before you know it, you’ll have a sizable income saved.

Prioritize

When making a budget, take the time to prioritize your expenses in order of importance. Some things, such as bills, mortgages and loans, need to be paid off first. After these are taken care of, leave a little room for other, non-essential expenses. For example, rent always comes before the Internet bill, and groceries should always be stocked before new clothes and other nonessential expenses.

Prioritizing your budget will help you stay on top of your monthly bills, and it will show you just how much you’re able to allocate to outside expenditures. Prioritizing is one of the hardest pieces of the puzzle, especially if multiple credit card bills are added into the mix.

Buy Generic

One of the easiest ways to help save money is to buy generic. In fact, a Reports study found that shoppers who bought store-brand products over their name-brand alternatives saved an average of 25 percent on groceries. That’s $25 for every $100 spent!

Though clever packaging and brand recognition may have you believe that big name products are better and higher quality than their store-brand counterparts, most—if not all—generic products contain the same ingredients and taste just as good.

Curb Transportation

As gasoline prices continue to rise, you may want to limit how often you drive. Carpooling can help slash bloated gas prices, especially since you’re able to split the cost of gas among a number of people. Similarly, public transit is another economical alternative. Also, avoid taxis if you can, as they’ve been known to put a major dent in even the densest of checkbooks.

Save Your Receipts

No one’s perfect. We all make mistakes, and as a fledgling budgeter you’re probably going to make some too. That’s ok; it’s a growing process. With that in mind, be sure to keep a copy of your receipts. Opting for your bank or credit union’s online billing system will help make it easier to keep track of your purchases, and it will save a few (hundred) trees in the process. Keeping track of your receipts gives you a bird’s-eye-view perspective of your spending habits. It also helps you return something in case you decide a particular purchase wasn’t quite worth it.

By curbing your spending habits and sticking to a set budget, you’ll have an easier time paying off bills, which in turn will help improve your overall credit. And as your credit improves, you’ll be able to find better deals on loans and rates.

Anum

Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you'll find her work all over the PF blogosphere.