How to Survive on a Marginal Income

Even small amounts of money can add up to make ends meet.

Even small amounts of money can add up to make ends meet.

A marginal income should not keep young singles and couples from doing all the things people in their 20s and 30s love to do. You can shop, go to the movies, eat out, and even save for the future with some planning. Organization is the most important factor if you have to plan your finances with limited income. Think about your life as a business. This mindset can help you make wise investments and stay frugal while you work for more financial security in the future.

Create a spreadsheet of all your expenses and your income over a one-month-period. Separate the essentials such as utilities, loan payments and rent into one category and non-essentials into another category. Non-essentials should include items such as entertainment and dining. This gives you an accurate idea of exactly what you need to spend in a month on essentials and where your remaining income is currently spent. This could end up being a real eye-opener if you have not budgeted before. A few dinners can quickly add up to hundreds of dollars that could have been better utilized elsewhere.

Set aside the money left over after you calculate the cost of all essentials. Don't turn this budgeting project into a joyless exercise in pinching pennies. Put money away for important non-essential items like new work clothes but also put some money together for entertainment. While you may not go out as often as before, those times you do can refresh your mind and remind you what to look forward to when all the hard budgeting work pays off. Think of it as a reward.

Evaluate large budgeting items, such as groceries and clothes shopping, that have some leeway to adjust. For example, looking over your weekly grocery list may reveal that you purchase expensive brand names even though you are perfectly content with generic brands. Make the switch to the less expensive alternatives. Take advantage of sales and markdowns. Try shopping at different stores to determine which chain offers the best deals on the items you purchase the most. A well-planned trip to two different grocery stores may save hundreds of dollars by the end of the month. For clothing, try less expensive alternatives such as outlet stores or even thrift stores.

Pay all your essential expenses at the same time each month. A timely schedule helps you keep track of all your expenses. Forgetting to pay a couple bills on time can create the false impression that you have more money. A regular schedule makes timely payments a habit and keeps your budget as accurate as possible.

Keep all spare change and loose dollars in a jar. A quarter and a dollar here and there may not seem like a lot but they do add up as the weeks and months pass by. You can easily end up with more than $100 in your loose change jar in a matter of months. Use this money as you see fit, perhaps as savings or a vacation fund.

Items you will need

  • Spreadsheet
  • Jar

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About the Author

David Montoya is an attorney who graduated from the UCLA School of Law. He also holds a Master of Arts in American Indian studies. Montoya's writings often cover legal topics such as contract law, estate law, family law and business.

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