Living on a Limited Income

According to the United States Census Bureau, the poverty threshold in 2023 for a family of four is $29,960. Certain factors like demographics and education level can affect poverty. However, there is no amount of money that can offer financial peace. Rather, the key to living on a limited income lies in finding satisfaction with what you already have.

Living Within Your Means

Being able to meet financial responsibilities-finding balance between income and expenses without the need to take on debt—is the cornerstone of living within your means. Thus, spending less money than you earn each month means you can have money for savings or to meet financial goals like building an emergency fund or paying off debt.

Spending more money than you are earn means you are relying on credit cards, loans, or prior savings. Furthermore, living above your means can negatively impact your credit score, making it even harder to build an emergency fund, and can leave you living paycheck to paycheck.

Personal Budget

The foundation of budgeting is knowing how much you bring in each month and how much money you spend each month. Tracking your spending will enable you to see exactly where your money is going. Analyzing actual amounts spent on groceries, dining out, entertainment, fuel, recurring subscriptions, and other expenses such as utilities can help you pinpoint where changes can be made to reduce your spending.

When looking for ways to cut spending, consider free or low - cost activities for your family that will still enable you to do the things you enjoy. Another tactic is to delay making large purchases to help you avoid impulse spending. Next, look for sales on high-ticket purchases or consider purchasing only after newer models have been released. Also, take a look at your recurring subscriptions—some people end up paying for services they rarely or never use.

Where possible, look for ways to increase your income. If you are skilled at a trade or have a hobby, consider a side hustle or freelance opportunity to bring in more money each month. Decluttering your home is another way to bring in money. Not only can you sell your extra stuff for cash, but you can free up space in your living quarters.

Financial Peace

Basic necessities are essential to survive and to thrive. These human needs include food, shelter, and clothing. Beyond being able to meet basic needs, living within a budget can afford you financial peace. Moreover, not having to worry about an unexpected expense or medical emergency can help you feel more confident, more financially secure, and protected. Adopting good financial habits will not only enable you to live within your means, but also better equip you to teach these skills to your family.