How to Budget with No, Low, or Fixed Income

Budgeting is easy when you have plenty of money. When income is limited, it’s harder to make cuts. With low income or a fixed income, all your money is going toward basic necessities, leaving nothing to save or invest. Even on no income, there are budgeting ideas that can help you stretch your dollar further.

In 2019, there were 34 million people in poverty in the U.S. Poverty is not caused by any single factor but is often caused by multiple issues like disability, domestic abuse, unemployment, medical emergencies, social injustice, lack of education, and rising costs of living. Even with government benefits, you may not have enough to provide for your family. If you learn how to manage your finances, it can make a big difference in your financial independence and quality of life.

Many people who are living on disability benefits struggle to save anything extra after paying for their daily needs. It may seem like there are no incentives to make more money because the income caps on disability could disqualify you from benefits. If you have questions about disability benefits, a Social Security disability lawyer may be able to help you.

Sort Out Spending

Your budget simply boils down to money in minus money out. If you cannot change the amount of money you get as income, your only option is to make changes in how much you spend. Even small changes in your spending habits can start to add up.

If you are on a limited income, you may be eligible for programs to reduce your utility expenses, including electricity, gas, and water. There may also be programs to help with phone bills and internet access. Even if there are no options, many people have had success with calling up their phone or internet provider and negotiating for a lower monthly fee.

Many parents try to hide their financial problems from their children. However, it is important for your child to understand financial literacy. This can make it more likely for them to have financial success when they get older. Teach your child about interest, savings, and budgeting for monthly expenses.

Unemployed After Work Injury

Workers’ compensation laws provide benefits for workers who are injured or contract an illness on the job. Most workers are able to claim these benefits when they need to, but not everyone takes advantage of them. Employers may actively discourage making a claim or improperly deny valid claims. If you were injured at work, make sure you are getting the benefits you deserve. Talk to a workers’ comp lawyer for help.

Unemployed After Disability or Terminal Illness

Social Security Disability Insurance (SSDI) provides supplemental income to individuals who can no longer work because of a disability, terminal illness, or mental illness. To qualify for disability benefits, you need to have an established work history.

Medicaid, SNAP, CHIP, TANF, and Other Benefits

There are a number of federal and state benefits to help low-income families. Many eligible families do not take advantage of these benefits because they want to be independent or they don’t know about them. These programs are there to help you and your family, and you should sign up to get the benefits and care you deserve.

Medicaid helps with health care costs for some people with a limited income who are not eligible for Medicaid. The Children’s Health Insurance Program (CHIP) provides health care benefits for children in low-income households.

SNAP is the Supplemental Nutrition Assistance Program (SNAP). SNAP and the Supplemental Food Program for Women, Infants, and Children (WIC) are federal government programs that provide families with access to food and nutritional support. There is also the Child Nutrition Program, which provides reduced-cost or free lunches to school children.

Temporary Assistance for Needy Families (TANF) provides cash benefits to help low-income families with children achieve self-sufficiency. TANF is run at the state level and provides monthly cash assistance payments and other services.

Tips for Staying On Track

Have you tried keeping a budget or tracking your expenses? Keeping a log of where your money goes can help you keep things in perspective. You may not realize just how much money you are spending until you add it up at the end of the month. There are a number of free apps that can help you track your spending, including Mint, Pocket Guard, and Zeta.

Selling off old stuff can be rewarding, and not just in a financial sense. Many of us spend our time and money collecting and buying things, even if we don’t really need them. You will probably not get what you want from selling these things, but it may be more than you’d get by keeping it in a closet gathering dust. Check out online services like Poshmark, Facebook Marketplace, or eBay to sell your items and collect cash.

It can be overwhelming to worry about every penny you spend. It is important to have a goal and remind yourself of that goal. Maybe your goal is to be debt-free, save up for a vacation, or start putting money into your child’s education fund. Putting up a picture that reminds you of your goal can be a way to help you focus on why you are making these sacrifices and remind you that it will all be worth it.

Paying Off Credit Cards and High-Interest Debt

Credit card debt and high-interest-rate loans are some of the most harmful financial costs for people with low income. Credit card purchases may seem too good to be true, but each month, the compounding interest makes it harder and harder to pay off the debt. If you have debt across multiple cards, try and pay off the higher-interest-rate cards first. Paying the minimum amount due may keep you paying off the card for years. When possible, pay more than the amount due.

Entrepreneurial Endeavors and Side Hustles

You may be able to start your own business, earn money from investments, or do a side hustle to get extra money. However, you have to be careful to make sure your self-employment is not “substantial gainful activity” that puts you over the minimum monthly income that could jeopardize any state or federal benefits you receive.

Social Security has some programs to help individuals seek alternative employment and income while still being able to get benefits. This includes the Trial Work Period (TWP), Extended Period of Eligibility (EPE), Ticket to Work Program (TWP), and Plan to Achieve Self-Support (PASS).

If you are making extra money while on disability, you have to make sure it does not qualify as countable income. Too much countable income and substantial gainful activity can disqualify you from benefits.