How to Budget on Little Income

by D. Laverne O'Neal, Demand Media

    You may be accustomed to a certain standard of living. But if you or your partner loses a job, or otherwise endures a grave drop in income, you have to find a way to make do on less. Instead of weeping and wailing over the loss, take solid steps toward creating a plan to live within your current means.

    Tot Up Your Basic Expenses

    Housing and food are the most fundamental. Electricity, gas and telephone utilities follow closely behind. Sum the costs of these basics. These are your minimum living costs. If your income is not adequate to cover these expenses, you may need to consider downsizing to a smaller home or choosing a lower-cost telephone plan, for example.

    Eliminate Fluff

    Things that might have seemed de rigueur when you were flush might now fall into the category of "luxuries." Pay cable channels are a good example. Shopping trips for "wants" rather than "needs" are another. Other examples include pricey coffee-shop drinks or frequent dining out. Look at bank and credit card statements from your higher-income days to see where your money was going. Identify items that are not necessary and cut them from your budget.

    Increase Your Income

    This might sound odd, especially if jobs are hard to come by, but you may be able to tap income sources you haven't thought about. For a quick influx of cash, consider selling on eBay or on consignment. Cleaning out your closet may reveal lightly used items another consumer would be happy to have. Start a blog or monetize the one you have. If you live in a large- to medium-sized city, participating in focus groups is another way to come by cash. Over the longer haul, a part-time evening or weekend job while you look for steady work can be a lifesaver.

    Set Aside an Emergency Fund

    You've heard it a thousand times before and may have ignored it when you were drawing a good salary. But having money put by for unexpected expenses becomes even more important when times are tough. MSN Money suggests opening a separate bank account and diverting money into it whenever you get paid. Even $5 or $10 at a time adds up after a while. Think of an emergency fund as peace-of-mind money. When you're faced with unexpected car repairs, insurance or utility increases, or other costs, you will be able to cover them.

    About the Author

    D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.